1. School of Medical Education
Innovation System
Shahid Beheshti University of Medical Sciences
School of Medical Education
Strategic Policy Sessions: 06

2. Industrial vs. Knowledge-Base Economies
Since the beginning of the 1970s, the most advanced economies in the world have been undergoing structural change, turning them from industrialized economies based on labor, tangible capital and material resources into economies based more and more on the creation, diffusion and exploitation of new knowledge.
One of the fundamental characteristics of this shift is the structural intensification of research activities.

3. Knowledge as a Strategic Asset
In the emerging ‘knowledge-based economy’, also called ‘learning’ economy, economic growth depends more directly on investment in knowledge, which increases productive capacity, than on traditional factors of production (Lundvall and Johnson, 1994).
In other words, knowledge raises the returns on and the accumulation of other types of investment (Nelson and Romer, 1996).

4. Definitions of Knowledge-Based Economy
APEC: a KBE is an economy in which the production, distribution and use of knowledge are the main drivers of growth, wealth and employment across all industries.
OECD: where investment in knowledge is defined as public and private spending on higher education, expenditure in R&D and investment in software.

5. Timing of Adoption
It often takes a long time for Technology to move from lab. to commercial value:
Freon refrigerants - 1 year
Zipper - 27 years
Mechanical cotton picker - 53 years
Fluorescent lamp - 79 years

6. Shortening of cycles of late innovations: Spread of successive technologies in the US automobile industry
Percentage of output incorporating the innovation

7. The Geographic Outspreading of Technologies as They Mature

8. The Importance of Systems
Despite similarly large investments in R&D by various industrialized and semi-industrialized countries starting in the 1950’s and 60’s “evidence accumulated that the rate of technical change and of economic growth depended more on efficient diffusion than on being first in the world with radical innovations and as much on social innovations as on technical innovations” (Freeman, 1995).

9. Tacit vs. Codified knowledge
Codified scientific and technological information, are disembodied knowledge (in articles, blueprints, patents, software and databases), a so-called “nonrival public good”
Tacit knowledge (skills, competencies, routines) is acquired through experience (learning, producing, researching) and consists of the accumulation of human skills and techniques.

10. Propositional and Prescriptive Knowledge
Knowledge that catalogues natural phenomena and regularities (“knowledge of what”), which is called propositional knowledge.
Knowledge that prescribes certain actions that constitute the manipulation of natural phenomena for human material needs (“production”) and which is called prescriptive knowledge.

11. Discovery vs. Invention
When an addition is made to the base of propositional knowledge, it is typically called discovery.
When an addition is made to the base of prescriptive knowledge, it is typically called invention.
When prescriptive knowledge is carried out, it is termed production.
In prescriptive knowledge, there is always a tacit component.

12. Technology
Technology is the know-how on how to apply scientific knowledge. As such it belongs to a larger group of activities which embrace the creation and use of artifacts, crafts and items of knowledge as well as various forms of social organization (Grupp, 1998).
It is important to distinguish between technological change and scientific advance.

13. Science and Technology
Science includes processes of knowledge creation and diffusion.
Technology on the other hand focuses on the application or usage of the created knowledge.
The research process is of major importance for building and using knowledge for the materialization of innovations.

14. Basic Research
Basic research or fundamental research refers to experimental or theoretical work geared ‘primarily’ to the acquisition of new knowledge about the basic origin of phenomena and observable events without targeting a particular application of use.

15. Applied Research
Applied research is biased towards specific and practical purposes or objectives.
It also includes a new knowledge generation process but always in regard of the practical application. The results of applied research are intended to be valid for a limited range of products of processes.

16. Experimental Development
Experimental development is systematic work structured on existing knowledge which is directed towards production of new materials, products, equipment or the installation of new processes, systems or services.

17. Academic vs. Industrial Research
The largest part of academic research is concentrated in basic research, although applied research efforts are also undertaken to a considerable extent in many academic departments
Industrial research and development is mainly concerned with the design and development of artifacts, directed at the more practical application.

18. Academic vs. Industrial Research
Over the years, this distinction has become more and more obsolete. Applied R&D activities are also performed by academic researchers, while industry is involved in basic research to a greater extent.
Furthermore, there is a strong interaction between academic and industrial research, reinforcing each other's capacity to solve complex problems.

19. Definition of Innovation
Innovation is the ability to manage knowledge creatively in response to market-articulated demands and other social needs.

20. Definition of Innovation
Innovation results from complex interactions between research, design, production and marketing that take place in a web of interactive learning within and among firms and other knowledge organisations.

21. Definition of Innovation
“New combinations“ of previously not connected ideas, knowledge, technologies or markets.

22. Innovation as a matching engine

23. The Innovation Process
Basic
Research
Discovery
Propositional
Knowledge

24. The Innovation Process
Basic
Research
Discovery
Propositional
Knowledge
Prescriptive
Knowledge
(Technology)
Applied
Research
Invention

25. The Innovation Process
Basic
Research
Discovery
Propositional
Knowledge
Prescriptive
Knowledge
(Technology)
Applied
Research
Invention
Design &
Development
Patenting
Product &
Process

26. The Innovation Process
Basic
Research
Discovery
Propositional
Knowledge
Prescriptive
Knowledge
(Technology)
Applied
Research
Invention
Design &
Development
Patenting
Product &
Process
Marketing
Usage &
Application

27. The Definition
The phrase “system of innovation” is used for describing the many interactions among many participating institutions, organisations and firms, most of which “formally” operate independently of each other.

28. The Goal of an Innovation System
The goal of an innovation system is to develop, diffuse and utilize innovations.

29. Elements of Innovation System
Policy Bodies
Central policy and financing agencies
Relevant Parliamentary or Governmental Committees
Government agencies for technology diffusion and incubation
Economic development agencies in government
Regulatory Bodies
Ethics bodies,
Registration, and patent offices
Research and Development Institutes
Government Research institutes
Private non-profit Research Organizations
Corporate R&Ds
R&D Performing Firms
Business Enterprises
Large local corporations
SMEs
Business associations

30. Elements of Innovation System
Education and Training institutions
Universities
Technical Colleges
Primary and secondary schools
Non-financial Support Organizations
Public Technology Transfer Agencies
Public Innovation Advisory Agencies
Science and Technology Parks
Technology Incubators
Financial Support Organizations
Commercial Banks
Venture capitalists
Organized Civil Society
Labour unions, especially those dealing with technical change
NGOs delivering technical services Policy advisory bodies interested in technical change
Professional and Academic Societies

31. Types of systems of innovation
Over the nearly two decades since the emergence of the national innovation systems paradigm, a number of other system level analyses have emerged.
The different systems frameworks can be defined as follows:
National innovation systems
Regional innovation systems
Clusters
Sectoral innovation systems
Technological systems of innovation

32. Definition of NIS (Freeman, 1987)
“The network of institutions in the public- and private-sectors whose activities and interactions initiate, import, modify and diffuse new technologies”

33. Definition of NIS (Lundvall, 1992)
“The elements and relationships which interact in the production, diffusion and use of new, and economically useful knowledge... and are either located within or rooted inside the borders of a nation state”

34. Key objectives of an innovation policy:
Building an innovation culture
Enhancing technology diffusion
Promoting networking and clustering
Leveraging research and development
Responding to globalization

35. Functions of NIS (Galli and Teubal 1997)
Hard functions
R&D activities (public) and
the supply of scientific and technical services to third parties (business sector and public administration).
Soft functions:
diffusion of information, knowledge and technology;
Policy making;
design and implementation of institutions concerning patents, laws, standards, etc.;
diffusion of scientific culture, and
professional coordination.

36. Functions of NIS (Rickne, 2000)
to create human capital;
to create and diffuse technological opportunities;
to create and diffuse products;
to incubate in order to provide facilities, equipment, and administrative support,
to facilitate regulation for technologies, materials, and products that may enlarge the market and enhance market access;
to legitimize technology and firms;
to create markets and diffuse market knowledge;
to enhance networking;
to direct technology, market, and partner research;
to facilitate financing; and
to create a labor market that [can be utilized].

37. Functions of NIS (Johnson 2001)
Supply incentives for companies to engage in innovative work
Supply resources (capital + competence)
Guide the direction of search (influence the direction in which actors deploy resources)
Recognize the potential for growth (identifying technological possibilities and economic viability)
Facilitate the exchange of information and knowledge
Stimulate / create markets
Reduce social uncertainty (i.e. uncertainty about how others will act and react)
Counteract the resistance to change that may arise in society when an innovation is introduced (provide legitimacy for the innovation)

38. Silicon Valley
In sixty years, the 50 mile strip from San Francisco-Berkeley to San Jose, California has grown to over 7,000 electronics and software companies with a market value of $ 450 billion.
Its 300,000 top scientists include some one-third born abroad.
A dozen new firms (and dozens of new millionaires through IPOs) are created each week.

39. Hubs of Technological Innovation

40. Analysis of the foci of various systems of innovation frameworks
More
specific
Less
More specific
Less specific
System Actors / Agent
Place
National Innovation System
Regional Innovation System
Innovation Clusters
Sectoral Innovation System
Technological Systems of Innovation

41. Definition of Clusters
a concentration of competing, collaborating and interdependent companies and institutions which are connected by a system of market and non-market links.
customers, suppliers, competitors and other supporting institutions such as universities, colleges, research bodies, financial institutions and the utilities

42. Analysis of the foci of various systems of innovation frameworks
More
specific
Less
More specific
Less specific
System Actors / Agent
Place
National Innovation System
Innovation Clusters
Sectoral Innovation System
Technological Systems of Innovation
Regional Innovation System

43. Definition of regional innovation system
A set of interacting private and public interests, formal institutions and other organizations that function according to organizational and institutional arrangements and relationships conducive to the generation, use and dissemination of knowledge.

44. Definition of regional innovation system
This set of actors produce pervasive and systemic effects that encourage firms within the region to develop specific forms of capital that is derived from social relations, norms, values and interaction within the community in order to reinforce regional innovative capability and competitiveness.

45. Analysis of the foci of various systems of innovation frameworks
More
specific
Less
More specific
Less specific
System Actors / Agent
Place
National Innovation System
Regional Innovation System
Innovation Clusters
Sectoral Innovation System
Technological Systems of Innovation

46. Technology-specific Innovation System
This concept implies that there are many technology specific innovation systems within a country and that each technological system is unique in its ability to develop and diffuse new technology.
(Jacobsson and Johnson 2000)

47. Boundary relations between National, Sectoral, and Technology Specific Innovation Systems
National Innovation System

48. Boundary relations between National, Sectoral, and Technology Specific Innovation Systems
National Innovation System
Sectoral Innovation System

49. Boundary relations between National, Sectoral, and Technology Specific Innovation Systems
National Innovation System
Sectoral Innovation System
Technology Specific Innovation System
Technology Specific
Innovation System

50. Dynamics of technology specific innovation systems
In the case of technology specific innovation systems, the number of actors, networks and relevant institutions is much smaller than in a NSI, which reduces the complexity.

51. The Changing Scientific Roots of Innovation

52. Developed NISs NISs Developing NISs Larger Developed NISs
High Tech Smaller NISs
Developed
NISs
Services Oriented NISs
NISs
Natural Resources Based NISs
Catching Up
NISs
Structuring NISs
Developing
NISs
Emerging NISs
Unformed NISs

53. Developed NISs Developing Larger Developed NISs High Tech Smaller NISs
Structuring NISs
Unformed NISs
Emerging NISs
Catching Up
Larger Developed NISs
High Tech Smaller NISs
Services Oriented NISs
Natural Resources Based NISs

54. NISs
Developed
Developing
Structuring NISs
Unformed NISs
Emerging NISs
Catching Up
Larger Developed NISs
High Tech Smaller NISs
Services Oriented NISs
Natural Resources Based NISs
Larger OECD economies. These NISs are doing relatively better on innovation than in diffusion. Scale effect might be present in explaining a relatively high performance on innovation.

55. France, Germany, Italy, Japan, Korea, Taiwan, UK, US
NISs
Developed
Developing
Structuring NISs
Unformed NISs
Emerging NISs
Catching Up
Larger Developed NISs
High Tech Smaller NISs
Services Oriented NISs
Natural Resources Based NISs
France, Germany, Italy, Japan, Korea, Taiwan, UK, US

56. NISs
Developed
Developing
Structuring NISs
Unformed NISs
Emerging NISs
Catching Up
Larger Developed NISs
High Tech Smaller NISs
Services Oriented NISs
Natural Resources Based NISs
They are small open economies with a high degree of specialization, and are much more concentrated on high tech manufactures. Moreover they are doing very well in both innovation, diffusion and intangible accumulation.

57. Finland, Ireland, Netherlands, Singapore, Sweden, Switzerland
NISs
Developed
Developing
Structuring NISs
Unformed NISs
Emerging NISs
Catching Up
Larger Developed NISs
High Tech Smaller NISs
Services Oriented NISs
Natural Resources Based NISs
Finland, Ireland, Netherlands, Singapore, Sweden, Switzerland

58. NISs
Developed
Developing
Structuring NISs
Unformed NISs
Emerging NISs
Catching Up
Larger Developed NISs
High Tech Smaller NISs
Services Oriented NISs
Natural Resources Based NISs
Economies tend to be very specialized in quite different types of production, ranging from low to high tech, and their services sectors play a very significant role in their international specialization.

59. Denmark, Belgium, Luxembourg, Hong Kong
NISs
Developed
Developing
Structuring NISs
Unformed NISs
Emerging NISs
Catching Up
Larger Developed NISs
High Tech Smaller NISs
Services Oriented NISs
Natural Resources Based NISs
Denmark, Belgium, Luxembourg, Hong Kong

60. NISs
Developed
Developing
Structuring NISs
Unformed NISs
Emerging NISs
Catching Up
Larger Developed NISs
High Tech Smaller NISs
Services Oriented NISs
Natural Resources Based NISs
Economies characterized by good natural resources endowments (grazing land, oil and other minerals,...) and which display an international specialization reflecting that fact. When comparing with other developed NISs, these systems tend not to perform very well both on innovation and diffusion.

61. Australia, New Zealand, Norway, Austria, Canada, Spain
NISs
Developed
Developing
Structuring NISs
Unformed NISs
Emerging NISs
Catching Up
Larger Developed NISs
High Tech Smaller NISs
Services Oriented NISs
Natural Resources Based NISs
Australia, New Zealand, Norway, Austria, Canada, Spain

62. Developed NISs Developing Larger Developed NISs High Tech Smaller NISs
Structuring NISs
Unformed NISs
Emerging NISs
Catching Up
Larger Developed NISs
High Tech Smaller NISs
Services Oriented NISs
Natural Resources Based NISs

63. Developed NISs Developing Larger Developed NISs High Tech Smaller NISs
Structuring NISs
Unformed NISs
Emerging NISs
Catching Up
Larger Developed NISs
High Tech Smaller NISs
Services Oriented NISs
Natural Resources Based NISs

64. NISs
Developed
Developing
Structuring NISs
Unformed NISs
Emerging NISs
Catching Up
Larger Developed NISs
High Tech Smaller NISs
Services Oriented NISs
Natural Resources Based NISs
Hungary, Czech Republic, Malaysia, Malta, Slovenia, Slovak Republic, Estonia, Greece, Lithuania, Latvia, Poland, Portugal, Ukraine

65. NISs
Developed
Developing
Structuring NISs
Unformed NISs
Emerging NISs
Catching Up
Larger Developed NISs
High Tech Smaller NISs
Services Oriented NISs
Natural Resources Based NISs
Argentina, Brazil, Bulgaria, Chile, China, Columbia, Cyprus, Egypt, India, Indonesia, Mexico, Peru, Philippines, Russia, South Africa, Romania, Thailand, Turkey, Venezuela

66. Developed NISs Developing Larger Developed NISs High Tech Smaller NISs
Structuring NISs
Unformed NISs
Emerging NISs
Catching Up
Larger Developed NISs
High Tech Smaller NISs
Services Oriented NISs
Natural Resources Based NISs

67. NISs
Developed
Developing
Structuring NISs
Unformed NISs
Emerging NISs
Catching Up
Larger Developed NISs
High Tech Smaller NISs
Services Oriented NISs
Natural Resources Based NISs
Algeria, Bangladesh, Congo, Ethiopia, Iran, Kenya, Sudan, Myanmar, Nigeria, Pakistan, Tanzania, Viet Nam, Colombia,

68. The Activity Basic Research Applied Research Product Design &
Development
Manufacturing

69. The Outcome The Activity Propositional Knowledge Prescriptive
Engineering
Prototype
Pre-production
Prototype
Product
The Activity
Basic
Research
Applied
Research
Product Design &
Development
Manufacturing

70. The Outcome The Firm The Activity Business Plan New Firm Mature SME
Large Company
The Outcome
Propositional
Knowledge
Prescriptive
Knowledge
Engineering
Prototype
Pre-production
Prototype
Product
The Activity
Basic
Research
Applied
Research
Product Design &
Development
Manufacturing

71. The Outcome The Role The Firm The Activity Researcher Inventor
Entrepreneur
Businessman
The Firm
Business Plan
New Firm
Mature SME
Large Company
The Outcome
Propositional
Knowledge
Prescriptive
Knowledge
Engineering
Prototype
Pre-production
Prototype
Product
The Activity
Basic
Research
Applied
Research
Product Design &
Development
Manufacturing

72. Thank You !
Any Question ?