Transcript Knowledge-Based Economy

ΤΑΣΕΙΣ ΚΑΙ ΠΡΟΟΠΤΙΚΕΣ
ΣΤΗΝ ΕΠΟΧΗ ΤΗΣ
ΠΑΓΚΟΣΜΙΟΠΟΙΗΣΗΣ
Νίκος Βονόρτας
Center for International Science and Technology Policy
& Department of Economics
The George Washington University
Συνέδριο ΤΕΕ
«Ελληνική Βιομηχανία: Προς την Οικονομία της Γνώσης»
Αθήνα, 3-5 Ιουλίου 2006
Globalization
Globalization can be understood as a process of increasing
interdependence of national/regional economies and of the
productive and other organizations based in them.
In the economic realm, globalization brings more intense and
widespread competition, consequently faster rates of change,
and radical rethinking of company strategy and public policy.
Buzzwords currently directly linked to the global economy:
• Knowledge-based economy
• Innovation
• Entrepreneurship
• International division of labour (investment, outsourcing)
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Hellas: At the Edge of Europe
Population:
EU25 – 456 Million
Greece – 11 Million
USA – 297 Million
Penn. – 12.3 Million
Mass. – 6.4 Million
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Globalization
1870-1914
1945-1970
1980-2005
Is the World flat?
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Global Growth
Economically and Technologically
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Global Growth 1990-2005
12
11
Average Annual GDP Growth, in Percent
World
USA
EU
Japan
Asia
China
India
CIS
Latin America
10
9
8
7
6
5
4
3
2
1
0
1990-2000
-1
-2
-3
-4
-5
-6
2001-2005
Africa
A ’Spiky’ World
In Population, Welfare, Production and Innovation
How Do Spikes Emerge?
How Do We Generate Spikes?
Richard Florida, The Atlantic Monthly Oct 2005
Globalization: A Hellenic Perspective
• Globalization decreases importance of borders
– For Goods and Services – Business Logic
– For Technology and Competence – Innovation Logic
• National Borders Remain Important for Welfare
– Most people cannot and will not emmigrate to find jobs
– Country borders important – Political Logics
• Globalization increases Job Competition
– ’Offshoring’ of Manufacturing Jobs & Increasingly Service Jobs
• Markets and World Growth are Increasing
– Business and Country Opportunities
– Business and Country Challenges – Competitiveness!
• Fear for Staying Out of the loop
– In modern times, the country has not been a hotbed of R&D and Innovation
– Lurking fear that it is not catching up and that R&D and Innovation Activities
Concentrate Elsewhere
– But is the Link of R&D and Innovation the Correct Way to Think about the New Era?
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National Competitiveness:
Innovation Imperative
• Globalization is:
– Generally Good for Business
– On Average Good for the World
– Generating Winners and Losers
• Competitiveness is:
– Essential for Firms that Would like to be Winners
– Also Essential for Countries that Do not Want to be Marginalized
– Increasing Importance of Innovation for Firms and Countries
• Innovation Central to Competiveness:
– Generates New Business Models and Strategies
– Stimulates New National Innovation and Growth Strategies
– Changes the European and Member State Policy Agenda
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Knowledge-Based Economy
Trade
Investment
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The “Old” New Era
It has become commonplace to argue that technological
advance is the most important source of long term
economic growth.
Economists and policy analysts have paid increasing attention
to high technology activities, associating them with higher
value added output and higher incomes.
The traditional perception of high technology has been
research and development (R&D) intensive manufacturing
industries.
The importance of technology-based economic activities has
been associated with the share of high technology
manufacturing industries in the gross domestic product
(GDP) of a country.
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The “New” New Era
The penetration of “infrastructural” technologies (ICTs,
biotech, advanced materials, nano) throughout the
economy has, however, dramatically altered the basic
meaning of high technology during the past decade.
Rather than referring to the output of R&D-intensive
industries, high tech now refers to a style of work
applicable to just about any business.
Several policy and business analysts have gone on to claim
that there are no longer high and low tech industries there
are high and low tech firms.
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Many now argue that advanced OECD economies have entered an
era of knowledge-based development and growth
Materials
technologies
revolution
Communications
revolution
Biotech
revolution
KnowledgeBased
Economy
Infotech
revolution
Globalization
international
trade
finance
investment
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Knowledge-Based Economy
• The term “knowledge-based economy” reflects an increasing
recognition of the role of knowledge in economic growth.
“A knowledge-driven economy is one in which the generation
and exploitation of knowledge play the predominant part in the
creation of wealth”.
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Knowledge-based Economy
• Embodied in humans and in technology, knowledge has
always been central to economic development.
•
The role of knowledge, however, as compared to natural
resources, physical capital, and low-skilled labor has taken
on greater importance.
• OECD economies are more dependent on the production,
distribution and use of knowledge. They experience faster
expansion of output and employment in high-tech industry
segments of both manufacturing and services.
However, the picture varies a lot across countries.
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Key Sectors in Labour Productivity
Growth
Knowledge-intensive Industries
Patterns of Economic Growth
• OECD economies are increasingly based on knowledge.
They also are increasingly integrated into the world
economy, through international flows of goods and
services, investment, people and ideas.
• Over the past decade, the high-technology share of OECD
manufacturing production and exports has more than
doubled to reach 20-25%.
• While still lower, trade in high-tech services among OECD
member nations is increasing fast.
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International Trade OECD
MNE (Intra-firm) Trade
Foreign Direct Investment
International Trade
Exports by Technological Intensity
Manufacturing Trade Balance
Service Value Added in Manufacturing
Patterns of Investment
• The promise of faster expansion of output has been
increasingly pulling investment into high-tech goods and
services.
• ICTs (both hardware and software) have been at the
investment forefront.
• The importance of investment in R&D, education, and
labor training in sustaining and raising living standards has
also been rising.
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Investment in Knowledge
R&D
Internationalizing Manufacturing R&D
Stages of Technology Development:
What is Internationalized?
SMEs
Venture Capital
Strategy Implications
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Strategy Implications
Such developments have profound implications for both
policy and strategy.
• The ability to create, distribute and exploit knowledge and
information seems ever more important and is often
regarded the single most important factor underlying
economic growth and improvements in the quality of life.
• The competitiveness of firms depends crucially on how
efficiently they use their intangible assets (skills, creativity,
etc.) and their success in accessing external assets by
cooperating with other for-profit and nonprofit
organizations.
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Strategy Implications
• In this environment, innovation has become:
- more market-driven;
- more rapid and intense;
- more closely linked to scientific progress;
- more widely spread throughout the economy.
• The ways in which organizations interact in an economy
have been affected, with networking, cooperation, and the
fluid flow of knowledge within and across national borders
gaining in importance.
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Strategy Implications
• In reaction to (i) increasing costs and risks of innovation
and (ii) intensifying international competition, many firms
have opted for more focus and specialization.
• At the same time, as the range of technologies required for
innovation in many industries has expanded and
technologies have become more complex, companies can
no longer cover all relevant disciplines and the required
wide range of scientific and commercial knowledge.
• The need for cooperation has thus become greater than
ever before. The number of strategic partnerships has
exploded the last couple of decades.
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Strategy Implications
Moreover, the penetration of ICTs has gradually shifted the
locus of high tech production from exclusively manufacturing to a combination of manufacturing and services.
Technology is transforming the nature of the products of
both sectors.
1) Manufacturing is becoming more like services:
• customer service is becoming more important;
• products are increasingly being tailored to the needs of
individual customers.
It is estimated that over three quarters of the value of a typical
manufactured product is already contributed by service
activities such as design, sales, and advertising.
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Strategy Implications
(2) Technology is also changing production and consumption
patterns in some of the most valuable and fastest growing
service sectors (e.g. business services).
The codification of knowledge in such services makes direct
contact between producer and consumer unnecessary
allowing such services to be held as inventories and be
traded internationally (e.g., expert computer systems).
The introduction of ICT is making services more capital
intensive and more productive.
This process will also make services more susceptible to
competition and to the economic cycle - like
manufacturing goods.
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Strategy Implications
The convergence of high tech manufacturing and services has
• Exposed the under-appreciated role of the latter as
consumers of high technology products.
• Unleashed strong innovative forces in service sectors.
Service sectors are rapidly increasing their direct
participation in the R&D efforts of advanced economies.
This is done both independent of and in association with
manufacturing.
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An Unmistakable Sign of the Times
Firms must thus learn to link changes in their intellectual
capital and the worth of their business and balance sheets.
This is not really new. A firm’s intellectual capital (intangible
assets) - including both the stock of knowledge and the
ability to enhance it - has always been a source of
competitive advantage.
What is new is mounting evidence that for an increasing
number of firms in high technology manufacturing and
service sectors the intangible component of value far
outweighs the value of their tangible assets.
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Policy Implications
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A New Era for Policy
• With more opportunities, but also under intense
competition, the competitive strategy places a premium on
product differentiation.
• Knowledge becomes key, but knowledge is of many
different kinds and only partly resembles the traditional
notion of significant technological advance.
• Any remaining thought that government policies should
exclusively concentrate on manufacturing because it
creates “real” wealth and “proper” jobs is inadequate. Such
policies would inappropriately focus government attention
to only a part of the supply-side of the market of highCENTER FOR INTERNATIONAL SCIENCE AND TECHNOLOGY POLICY
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A New Era for Policy
Policy should move towards less direct policy instruments to
maintain and enhance a nation’s knowledge infrastructure.
• Distributed knowledge, skill, and entrepreneurship,
together with new forms of partnering between firms,
universities and government are important buzzwords.
• In the future, the economies that perform the best will not
be those whose governments only help particular industries
but those that develop and manage their knowledge assets
most effectively for innovation.
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A New Era for Policy
• Effective policy for competitiveness must, thus, focus on
the broader notion of innovation than just technology.
Innovation policy, which has traditionally been considered as
an extension of R&D policy, is now starting to be seen as a
generic policy area in which governments can promote an
innovative, flexible adaptation of their economies.
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A New Era for Policy
• Innovation policy will, by definition, be more usercentered and demand-based than technology policy.
• As such, innovation policy must also be better integrated
with:
- General economic policies that affect incentives to
innovate;
- Policies that shape the regulatory and institutional
environment in which innovation takes place; and,
- Policies providing safety nets for parts of the population
that fail to follow the ever increasing pace of change.
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Globalization,
Knowledge-based Economy
and the
Innovation Imperative
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In Conclusion
• Exclusive focus on science and technology (R&D) is
insufficient. Policy attention must turn on how to
stimulate the creative capacity of whole populations,
not just a few distinct R&D-intensive organizations.
This message was not lost by the High level Panel that
undertook the latest 5-Year evaluation of the
European Framework Research Programmes.*
*Five-Year Assessment of the Community Research Framework Programme 1999-2003, Final Report of the
High-Level Panel to Evaluate the European Union’s Framework Programme for RTD, European
Commission, DG Research, February 2005.
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In Conclusion
The Panel had a surprisingly clear perspective of what needs to be done
and how the Research Framework Programme fits in it. What needs
to be done was proposed to be much broader than the scope of the
Framework Programme.
The Panel identified four key challenges for Europe that must be
addressed through coordinated actions by both the European Union
and the Member States:
• Attract and reward the best talent
• Create a high-potential environment for business and industrial RTD
• Mobilise resources for innovation and sustainable growth
• Build trust in science and technology in European society
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In Conclusion
RTD is only one of these four challenges. And the FP accounts for only
a small portion of the overall European RTD expenditures. Still, its
importance in the European RTD landscape is much larger than the
resources would indicate, as it plays a central role in forming and
polishing those immobile resources mentioned in the introductory
section. A disproportionately important piece, for sure, but a small
piece nonetheless.
According to the Panel, the challenges for European research and
innovation policy can only be addressed by a systemic approach.
RTD policy should be coordinated with other socio-economic
policies that affect the European innovation environment. These
include competitiveness, intellectual property protection,
competition, state aids, human resources, education, gender, and
ethics. Demand-side policies, especially public procurement of RTD
and innovative goods and regulation, also have a critical role in
promoting innovation and the emergence of lead markets.
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In Conclusion
• Similar suggestions arise from several other
studies in Europe and elsewhere such as the
Aho Report.*
* Creating an Innovative Europe, Report of the Independent Expert Group on R&D and Innovation Appointed
following the Hampton Court Summit, European Commission, January 2006.
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Core Message
Think beyond just RTD
Nurture a cutting-edge
knowledge-based economy
Promote Innovation
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