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Local and Regional Innovation OECD Capacity Building Seminar Supporting SMEs in a Time of Crisis Jay Mitra 13 October, 2009.

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Presentation on theme: "Local and Regional Innovation OECD Capacity Building Seminar Supporting SMEs in a Time of Crisis Jay Mitra 13 October, 2009."— Presentation transcript:

1 Local and Regional Innovation OECD Capacity Building Seminar Supporting SMEs in a Time of Crisis Jay Mitra 13 October, 2009

2 Definitional Issues Entrepreneurship = new opportunity identification & realisation Entrepreneurship = new opportunity identification & realisation (for the purpose of this paper E = new business creation) (for the purpose of this paper E = new business creation) Innovation = successful exploitation of a new idea Innovation = successful exploitation of a new idea Culture = a set of attitudes/beliefs common to a group Culture = a set of attitudes/beliefs common to a group Culture = a set of activities concerned with moral, aesthetic, and intellectual aspects of life (activities include some element of creativity in production, communication of meaning & intellectual property) Culture = a set of activities concerned with moral, aesthetic, and intellectual aspects of life (activities include some element of creativity in production, communication of meaning & intellectual property) Culture = a diverse way of life (from beef steak to Beethoven to Culture = a diverse way of life (from beef steak to Beethoven to Eminem) Eminem) Entrepreneurial Culture = diverse set of attitudes, beliefs, systems, institutions and structures that are connected together with a view to supporting new venture creation, innovation and growth in a particular environment & in regional innovation systems. Entrepreneurial Culture = diverse set of attitudes, beliefs, systems, institutions and structures that are connected together with a view to supporting new venture creation, innovation and growth in a particular environment & in regional innovation systems.

3 Innovation is non-linear but involves interaction between many actors Innovation is non-linear but involves interaction between many actors Interest resulting from research on the success of the Japanese model (Freeman, 1987) Emergence of innovation systems models Emergence of innovation systems models (Freeman, 1987) Why Innovation Systems?

4 National innovation systems (Freeman, 1987; Lundvall, 2007) National innovation systems (Freeman, 1987; Lundvall, 2007) Regional innovation systems (Cooke 1992; Braczyk et al., 1998) Regional innovation systems (Cooke 1992; Braczyk et al., 1998) Key Models of Innovation Systems

5 Some Stylised Facts and Assumptions F/A 1: Innovation = source of economic growth The endogenous model)– critical importance of technological change in economic growth ( total factor productivity accounted for 87.5% of economic growth – Solow, 1957) Romer, 1990, OECD 2003 The endogenous model)– critical importance of technological change in economic growth ( total factor productivity accounted for 87.5% of economic growth – Solow, 1957) Romer, 1990, OECD 2003 Strong emphasis on role of R&D, skilled labour & knowledge spillovers – greater productivity, product quality dependent on innovation Strong emphasis on role of R&D, skilled labour & knowledge spillovers – greater productivity, product quality dependent on innovation

6 Some Stylised Facts and Assumptions F/A 2: Innovation is not evenly spread but spatially concentrated Well-known concentrations = Oxford; Cambridge; SE, UK; Lombardy; Bangalore, Shanghai High urban focus – OCED countries Significant local differences within countries (Camagni & Capello, 1997; Keeble, 1996; Acs, 2002) Different measures – innovation output (patent applications) & input/output (employment in high technology manufacturing & knowledge-intensive industries)

7 Top Territories Patent Applications per million inhabitants. Bottom territories Patent Applications per million inhabitants Zuid Nederland, Netherlands 797 Noreste, Spain 34 Baden Wuttenburg, Germany 597 Sud, Italy 14 Bayern, Germany 473 Attiki, Greece 13 Ile de France, France 313 Isole, Italy 11 Maner Suomi, Finland 312 French Overseas Departments 6 Eastern, UK 253 Continente, Portugal 5 Westosterreich, Austria 223 Kentriki Ellada, Greece 4 SE, UK 205 Madeira, Portugal 1 Mean131 Acores, Portugal 0 Median96 Subnational Variations in European Patent Applications, 2002 Source: adapted from Eurostat

8 Top territories Employees in HT manufacturing (% of total Manufacturing employees) Bottom Territories Employees in HT manufacturing (% of total Manufacturing employees) Aland, Finland 69 Centro, Spain 38 London, UK 61 Sur, Spain 38 Manner Suomi, Finland 59 Continente, Portugal 37 Hamburg, Germany 57 Voreia Ellada, Greece 36 SE, UK 57 Acores, Portugal 34 Brussels, Belgium 56 Canarias, Spain 33 Ile de France, France 56 Madeira, Portugal 32 SW, UK 55 Kentriki Ellada, Greece 29 Eastern, UK 54 Nisia Aigaiou, Kriti, Greece 28 Mean47 Median48 Subnational Variations in Innovation-Related Employment- High Tech Manufacturing, 2003 Source: Eurostat

9 Top Territories A * Bottom Territories A * SE, UK 17 Vlaams Gewest, Belgium 5 Berlin, Germany 16 WM, UK 5 Scotland, UK 14 Sud, Italy 4 Schieswig Holstein, Germany 14 Centro, Italy 4 Dunantul, Hungary 13 Yorkshire & Humber, UK 4 Ile de France, France 13 Attiki, Greece 4 Kozep Magyarorszag, Hungary 12 Este, Spain 3 Sudosterrrich, Austria 11 Sur, Spain 2 Baden Wurttermburg, Germany 11 Noreste, Spain 2 Mean8 Continente, Portugal 2 Median7 Subnational Variations in Innovation-Related Employment – Knowledge Intensive Industries Source: Eurostata * A = Employees In KI services as % of total employees

10 Some Stylised Facts and Assumptions F/A 3: SMEs participate in innovation process Classic structure-conduct-perfomance model = large firms have monopoly positions, commit substantial R&D Classic structure-conduct-perfomance model = large firms have monopoly positions, commit substantial R&D Alternative model = SMEs have more impact (more radical innovation, Baumol, 2002) Alternative model = SMEs have more impact (more radical innovation, Baumol, 2002) Importance of business churning (OECD, 2003) to national productivity Importance of business churning (OECD, 2003) to national productivity Empirical evidence suggests that both small and large firms play a part – dependent on active links to knowledge of market (users) & knowledge of materials & machinery (suppliers) & non-firm organisations Empirical evidence suggests that both small and large firms play a part – dependent on active links to knowledge of market (users) & knowledge of materials & machinery (suppliers) & non-firm organisations Small firms rely heavily on external environment Small firms rely heavily on external environment Spatial business clusters – association between spatial concentrations & rates of technological innovation (Baptista and Swann, 1998) Spatial business clusters – association between spatial concentrations & rates of technological innovation (Baptista and Swann, 1998)

11 Framework Mechanisms supporting SME innovation Porterian Clusters (Porter, Rivalry between competitors; specialised facotrs of production (land, labour, capital); large & growing demand & sophisticated customers; related industries & support institutions Marshallian districts (Pyke, et al, 1990) Non pecuniary externalities from knowoedge spillovers through informal personal exchanges, customer supplier transactions; labour pooling; inter-firm linkages Innovative milieux Linkages between firms through labour mobility & informal networking, supporting collective learning; reduction of uncertainty Learning Regions (Storper, et al, 1997; Morgan, 1997) Untraded interdependencies between local firms & other organisations; use of formal & informal information & collaboration networks & labour market interactions; facilitated by trust & social capital & technology support organisations Local Innovation Systems (Cooke, Heindrich & Braczyk, 2004; Howells, 1999) Knowledge generation, exchange & exploitation in system with important learning interactions among suppliers, customers, public research organisations, financial institutions. Supported by local policies Frameworks for Analysing Innovation Process in Agglomerations Source: OECD, 2005ecd

12 Innovation = 80% of productivity growth and comparable figure for GDP (Freeman, 1994) Innovation = 80% of productivity growth and comparable figure for GDP (Freeman, 1994) Regional disparities in innovation & GDP (Acs, 2002; Cooke et al., 2002) Regional disparities in innovation & GDP (Acs, 2002; Cooke et al., 2002) Innovation = higher in regions with more knowledge generation e.g. R&D by firms & institutions (Acs, 2002) Innovation = higher in regions with more knowledge generation e.g. R&D by firms & institutions (Acs, 2002) Region = new focus of economic policy (Cooke et al. 2003) Region = new focus of economic policy (Cooke et al. 2003) Why is a Regional Innovation System important?

13 Why are Local/regional Innovation Systems Relevant? Most processes driving innovation occur locally – knowledge embedded in people ; distance decay effects in rate of knowledge & information links; Most processes driving innovation occur locally – knowledge embedded in people ; distance decay effects in rate of knowledge & information links; SMEs have spatially restricted search patterns for collaborative partnerships or technological inputs; SMEs have spatially restricted search patterns for collaborative partnerships or technological inputs; Different localities have different sector specialisations & distinct sets of innovation processes; Different localities have different sector specialisations & distinct sets of innovation processes; Strong local differences in innovation performance Strong local differences in innovation performance

14 Type of Failure Nature of Failure Potential local policy actions Information failure Barriers to flow of information on innovation opps. Lead to missing markets & constraints for SMEs in obtaining finance, partners, etc. Promotion of networks & partnerships. Public support to SME research projects Public goods Undersupply of non rival goods & non excludable goods that contribute to SME innovation – e.g. university research Public policy of basic innovation infrastructure locally Externalities Undersupply of activities that benefit others in addition to producers – e.g. training of highly skilled labour; reduced incentives to SME innovation Direct public support for SME research projects for training of highly skilled labour in local specialisms Monopolies Incumbent firms restrict entry through branding & other behaviour, constraining ability of innovative, new & small firms to enter market & compete Second best policies supporting SMEs in order to level the playing field. Support of new firm entry in local sector specialsims. Indivisibilities Indivisible cost in creating knowledge. If marginal cost pricing is used fixed cost is irrecoverable, constraining production of knowledge by SMEs & others Public funding of public & private research projects with Potential spin offs for SMEs Market Failures and SME Innovation Source: OECD, 2005

15 Type of Failure Nature of Failure Potential Local policy action Infrastructure Provision Underinvestment in local infrastructure with which firms interact – e.g. communications infrastructure Incentives for private or public communications & knowledge transfer infrastructures Transition & lock in failures Firms & localities are highly capable in their own technological areas but in related ones. Unable to switch from existing technologies Incentives for technological activities that broaden firm & organisational capabilities & nurturing of emerging systems Institutional failures Institutional & regulatory context has unexpected negative impact Monitoring & adjusting local institutions & regulations Learning failures Firms may not be able to learn rapidly & effectively Developing firm capabilities through human capital programmes, support for R&D 7 technology dissemination policies. Opening channels to knowledge sources Suboptimal balance bet. exploitation & exploration Local innovation concentrations may work too much on exploitation & not enough on exploration (or vice versa) Using public procurement & funding to support exploration, introducing diversity in industry by supporting new & small firms; supporting variety through dissemination of codified information Suboptimal balance bet. selection & variety Local innovation concentrations may have too rapid selection whereby underperforming firms close, & too little variety, in terms of firms & activities carrying potentially promising technologies Strengthening competition policies & use industrial & technological policies to support new firms carrying potentially promising technologies ( or weaken competition policies & limit use of industrial & technological policies supporting firms that are likely to fail) Appropriability traps Too stringent appropriability may limit spread of knowledge within innovation system Encouraging local knowledge transfers Complementarities failures The appropriate complementarities may not be present in local innovation system Formation of R&D networks; industry university interfaces & bridging systems System Failures & SME Innovation source: OECD, 2005, Lundvall & Borras, 1997

16 Regional innovation system consists of interacting Regional innovation system consists of interacting knowledge generation knowledge generation and and exploitation sub-systems linked to global, national and other regional innovation systems for commercializing new knowledge (Cooke, 2004 p.3) exploitation sub-systems linked to global, national and other regional innovation systems for commercializing new knowledge (Cooke, 2004 p.3) Emphasis: Firms in interaction with other firms & knowledge infrastructure at regional level. What is Regional Innovation System?

17 ESSENTIAL NOTIONS: Tacit knowledge = Innovation involves face-face interaction between actors due to tacit knowledge e.g. experience () Tacit knowledge = Innovation involves face-face interaction between actors due to tacit knowledge e.g. experience (Maskell and Malmberg, 1999) Costs of interaction = Regional level has lower distance, transportation & communication costs (Audretsch, 1998; Krugman, 1991) Costs of interaction = Regional level has lower distance, transportation & communication costs (Audretsch, 1998; Krugman, 1991) Local networks = Innovation is higher in regions with local networks of SMEs and R&D ( Local networks = Innovation is higher in regions with local networks of SMEs and R&D (Maskell & Malmberg, 1999; Asheim & Gertler, 2004) Regional Innovation Systems (RIS)

18 1. Knowledge Generation: Public & private research laboratories Public & private research laboratories Universities & Colleges for scientific & technical training Universities & Colleges for scientific & technical training Firms that transfer knowledge Firms that transfer knowledge 2. Knowledge Exploitation: Firms with regional & global value chain relationships Firms with regional & global value chain relationships Venture capitalists Venture capitalists Consultants Consultants Adapted from: Cooke 2003) Adapted from: Cooke et. al., (2003) Sub-Systems of RIS

19 1. Innovation process is social Innovation = involves face-face interaction between actors internal & external to the firm ( ) Innovation = involves face-face interaction between actors internal & external to the firm (Maskell and Malmberg, 1999) Basic Arguments of RIS

20 2. Region facilitates interaction Region = lower distance, transportation & communication costs for interaction (Krugman, 1993) Region = lower distance, transportation & communication costs for interaction (Krugman, 1993) Face-to-face interaction and cooperation are easier at the regional level Face-to-face interaction and cooperation are easier at the regional level Basic Arguments of RIS

21 3. Regional concentration of R&D firms & institutions boosts innovation Combination of knowledge generation (e.g. by universities) & exploitation (by SMEs with local networks) boosts innovation Combination of knowledge generation (e.g. by universities) & exploitation (by SMEs with local networks) boosts innovation Local concentration increases capacity to use external knowledge for innovation Local concentration increases capacity to use external knowledge for innovation Adapted from: Cooke et al., 2003 Adapted from: Cooke et al., 2003 ; Asheim & Gertler, 2004 Basic Arguments of RIS

22 4. External Links boost innovation Entering global markets Entering global markets Sourcing Knowledge from global sources (e.g. R&D) Sourcing Knowledge from global sources (e.g. R&D) Basic Arguments of RIS

23 Entrepreneurship – requires knowledge and resource seeking (e.g. technical knowledge, finance, consultancy etc.) Entrepreneurship – requires knowledge and resource seeking (e.g. technical knowledge, finance, consultancy etc.) Innovative activity of firms and entrepreneurs are largely based on localised resources (Asheim et. al., 2003; Cooke et. al., 2000) Innovative activity of firms and entrepreneurs are largely based on localised resources (Asheim et. al., 2003; Cooke et. al., 2000) RIS provides access to critical resources for entrepreneurship within proximity RIS provides access to critical resources for entrepreneurship within proximity Links between RIS and Entrepreneurship

24 Grass roots – SME dominated or industrial district (less public governance) Grass roots – SME dominated or industrial district (less public governance) Networked – Associated between regional governance & industry pronounced Networked – Associated between regional governance & industry pronounced Centralist – Governance is strongly centralised Centralist – Governance is strongly centralised Cooke et. al (2003) RIS Public Governance System

25 Problem of RIS: Few Regions in the world are high-tech clusters

26 Typology of Regional Innovation Systems Globalist CaliforniaNorth-Rhine WestphaliaMid-Pyrenees Interactive CataloniaBaden-WurttembergQuebec Localist TuscanyTampereNorthern Ireland GrassrootsNetworkedCentralist Source: Braczyk et. al. 1998; Cooke et. al. (2003 p.368) Public Governance System Business innovation system

27 Identify Strong Sectors/Candidate Clusters Identify Strong Sectors/Candidate Clusters Investigate Regional Clusters Investigate Regional Clusters Identify Competitive Advantage Identify Competitive Advantage Identify Innovation Practices Identify Innovation Practices Cooperative or Individualistic? Cooperative or Individualistic? Innovation Support System Innovation Support System Developing Innovation Systems

28 1. Infrastructure issues 2. Superstructure Conditions for Assessing RIS

29 Conditions for Higher & Lower RIS Potential Infrastructure level Regional private equity Regional private equity Policy influence on infrastructure Policy influence on infrastructure Regional university-industry strategy Regional university-industry strategy Superstructural level Institutional dimension Co-operative culture Co-operative culture Interactive learning Interactive learning Associative consensus Associative consensus Organisational Dimension (firms) Worker mentoring Worker mentoring Externalisation Externalisation Interactive innovation Interactive innovation Organisational dimension (policy) Monitoring Monitoring Consultative Consultative Networking Networking Decentralised spending Decentralised spending National financing organisation National financing organisation Limited influence on infrastructure Limited influence on infrastructure Competitive culture Competitive culture Individualistic Individualistic Institutional dissension Institutional dissension Self acquired skills Self acquired skills Internationalisation Internationalisation Stand alone R&D Stand alone R&D Reacting Reacting Authoritative Authoritative Hierarchical Hierarchical Adapted from: Cooke et. al. (2001) Higher RIS potential Lower RIS potential

30 National Policy Information Legitimation MinistricsAssembly SME Agency Business associates FDI AgencyTraining agency Trade Board Universities Regional steering Committee National Research Institutes National technology agency Social partners Research Community Venture Capitalists Local Cooperative Forum Local Government Technology Consultants Chambers of commerce Reporting Requirement Information Programme approval Strategy Advice Information MeasuresCoordination Proposals Regional Enterprise Support System for Innovation Source: Braczyk, Cooke and Heinreich, eds. (1998)

31 Assets CapabilitiesConnectivities Public investment in technology development Creation of S&T parks Attracting inward investment Supporting access to finance Education & Training of individuals Advice, training & consultancy to SMEs Influencing motivation & abilities of universities & Research organisations in collaborative research with SMEs Creation & strengthening of local networks Encouraging local innovation collaborations Creation of bridging institutions Ensuring openness of local innovation system to sources of knowledge outside system Policy Levers to Strengthen Local Innovation Systems

32 ConceptsDefinitions and differences Regional cluster A concentration o f interdependent firms within the same or adjacent industrial sectors in a small geographic area Regional innovation network Increasingly organised co-operation (agreements) between firms, stimulated by trust, norms and conventions Regional innovation system Co-operation between firms and different organisations for knowledge development and diffusion Learning regions Increasingly organised co-operation with a broader set of civil organisations and public authorities that are embedded in social and regional structures. Comparison RIS & other Regional Models

33 RISs are rare and newly discovered RISs are rare and newly discovered Hard to detect systemic regional innovation Hard to detect systemic regional innovation In Europe = high dependence on public expenditure In Europe = high dependence on public expenditure Source: Cooke (2001) Problems with Public Support for RIS

34 RIS problemsType of ProblemTypical problem regionPossible policy tools Organisational thinness Lack of relevant local actorsPeripheral areas Link firms to external recourses + acquisition Fragmentation Lack of regional co- operation and mutual trustSome regional clustersDevelop regional club goods Loc k-in Regional industry specialised in outdated technologies Old industrial regions and raw material based peripheral Open up networks towards external actors + local mobilisation Isaksen (2001) Problems with Public Support for RIS

35 Differences: National vs. Regional Systems National Innovation Systems Regional Innovation Systems Inter-firm relations - Market - Clusters Knowledge infrastructure - Formal R&D laboratories - National R&D laboratories - University research - University research - Firm external sources of knowledge - Firm external sources of knowledge Public Sector (government) - Emphasis on national level - Emphasis on regional level Financial institutions - Formal savings - Formal financial sector - Venture capital - Informal financial sector Source: Acs (2002)

36 A Region of 1500 Square Miles in California, US A Region of 1500 Square Miles in California, US One of the most innovative high-tech regions in the world One of the most innovative high-tech regions in the world 1.35 million jobs 1.35 million jobs Headquarters for over 400 public companies Headquarters for over 400 public companies Average salary of $65,000 Average salary of $65,000 Venture Capital Investments of over $8 billion Venture Capital Investments of over $8 billion Case Study: Silicon Valley Source: Stanford University

37 Past: Linkages to Federal funding agencies and flood of Government Sponsored Research at universities (Cold war effect in1950s) Linkages to Federal funding agencies and flood of Government Sponsored Research at universities (Cold war effect in1950s)Present: Cutting-edge education to company employees Cutting-edge education to company employees Small Business Innovation Research (SBIR) grants: Over $2B awarded in U.S. in 2006 Small Business Innovation Research (SBIR) grants: Over $2B awarded in U.S. in 2006 knowledge generation in Silicon Valley (1) Source: Stanford University

38 knowledge generation in Silicon Valley (2) Source: Stanford University

39 Stanford graduates, faculty & staff have launched approximately 1200 companies in the last 50 years More than 50% of Silicon Valley product is due to companies started by Stanford alumni knowledge Exploitation in Silicon Valley Source: Stanford University

40 Silicon Valley Innovations: Past & Present Source: Stanford University

41 Some Silicon Valley companies

42 RIS consists of knowledge generation and exploitation subsystems RIS consists of knowledge generation and exploitation subsystems New focus of economic policy New focus of economic policy Think local, act global - External links are important for RIS Think local, act global - External links are important for RIS RISs are rare and rely heavily on public expenditure RISs are rare and rely heavily on public expenditure Conclusions

43 Some Preliminary Questions Can/does higher education make a difference? Can/does higher education make a difference? Does it make a difference by itself or in collaboration with other institutions? Does it make a difference by itself or in collaboration with other institutions? Do small businesses interact with this collaborative venture? Do small businesses interact with this collaborative venture? Does such interaction generate new businesses? Does such interaction generate new businesses?

44 University Culture and Entrepreneurship What unites academics more? Car Parking or intellectual discourse? What unites academics more? Car Parking or intellectual discourse? What price entrepreneurship? What price entrepreneurship? Loosely coupled systems (Weick 1976) Loosely coupled systems (Weick 1976) Collegial academy of chaos Collegial academy of chaos Four cultures of collegium, bureaucracy, corporation and enterprise (McNay, 1995) Four cultures of collegium, bureaucracy, corporation and enterprise (McNay, 1995)

45 University Offerings versus Entrepreneurs Learning Needs University/B-School Learning Focus Entrepreneurs Learning Needs Critical judgment after analyzing large amounts of information Critical judgment after analyzing large amounts of information Gut feel decision making with limited information Gut feel decision making with limited information Understanding and recalling the information itself Understanding and recalling the information itself Understanding the values of those who transmit/filter information Understanding the values of those who transmit/filter information Assuming commonality of goals Assuming commonality of goals Recognizing the widely varied goals of different stakeholders Recognizing the widely varied goals of different stakeholders Seeking (impersonally) to verify the absolute truth by study of information Seeking (impersonally) to verify the absolute truth by study of information Making decisions on the basis of judgment of trust & competence of people. Making decisions on the basis of judgment of trust & competence of people. Understanding the basic principles of the society in the metaphysical sense Understanding the basic principles of the society in the metaphysical sense Seeking to apply and adjust in practice to the basic principles of society Seeking to apply and adjust in practice to the basic principles of society Seeking the correct answer, with (enough) time to do it Seeking the correct answer, with (enough) time to do it Developing the most appropriate solution often under time-pressure Developing the most appropriate solution often under time-pressure Learning in the class room Learning in the class room Learning while & through doing Learning while & through doing Gleaning information from experts and authoritative sources for the sake of its genuineness Gleaning information from experts and authoritative sources for the sake of its genuineness Gleaning information from any and everywhere & assessing its practical usefulness Gleaning information from any and everywhere & assessing its practical usefulness Evaluation through written assessment Evaluation through written assessment Evaluation through judgment of people and events through direct feedback Evaluation through judgment of people and events through direct feedback Success in learning measured by passing of knowledge-based examinations Success in learning measured by passing of knowledge-based examinations Success in learning measured by solving problems, learning from failures and providing useful products and services to the society. Success in learning measured by solving problems, learning from failures and providing useful products and services to the society.

46 Some Stylised Observations 1/2 Patterns of use of university (especially research) output: Patterns of use of university (especially research) output: Economic stability = pure research; instability = commercialisation Economic stability = pure research; instability = commercialisation But note a few caveats: But note a few caveats: a) Origins of university activity– industry focused a) Origins of university activity– industry focused Technische Mittelschulen, Technische Hochschulen, Fachhoschulen in Germany; USA – University of Akron (polymers & elastomers), Cornells electrical engineering dept. Technische Mittelschulen, Technische Hochschulen, Fachhoschulen in Germany; USA – University of Akron (polymers & elastomers), Cornells electrical engineering dept. b) advent of science in engineering with government superseding industry & emergence of divide between corporate and university R&D b) advent of science in engineering with government superseding industry & emergence of divide between corporate and university R&D

47 Some stylised observations 2/2 Economic sectors with most rapid growth are closest to science – microelectronics, software, biotech and new materials. Economic sectors with most rapid growth are closest to science – microelectronics, software, biotech and new materials. Above industries also have high social qualities – high wages, good environmental characteristics, low barriers to entry for small firms, relative independence from geographic constraints Above industries also have high social qualities – high wages, good environmental characteristics, low barriers to entry for small firms, relative independence from geographic constraints Universities benefit from government policy to encourage entrepreneurship (licensed inventions from govt. grants (Mowrey, Nelson & Sampat, 1999) Universities benefit from government policy to encourage entrepreneurship (licensed inventions from govt. grants (Mowrey, Nelson & Sampat, 1999) Real spur to entrepreneurship in universities = business opportunity from basic science Real spur to entrepreneurship in universities = business opportunity from basic science Most revenues from patents of a very basic nature for process or tools & licensed non-exclusively Most revenues from patents of a very basic nature for process or tools & licensed non-exclusively

48 The Forces At Work - Regionalisation New & diverse client bases for teaching & research New & diverse client bases for teaching & research From traditional relationships with large corporations to regional clusters of firms (not just money but changes in nature & scope of technologies) From traditional relationships with large corporations to regional clusters of firms (not just money but changes in nature & scope of technologies) Regionalisation of regulating institutions leads to regional networking & institutional capacity building Regionalisation of regulating institutions leads to regional networking & institutional capacity building Universities as regional intermediaries & commentators Universities as regional intermediaries & commentators Regional networking as institutional survival Regional networking as institutional survival Ambivalent relationship with territory Ambivalent relationship with territory

49 The Forces at Work – Forms of Learning New mode of learning production from inter-disciplinary research centres & reliance on external funding (Gibbon, 1994) New mode of learning production from inter-disciplinary research centres & reliance on external funding (Gibbon, 1994) Interactive forms of learning inherently bound in time & space – regional context for learning & knowledge Interactive forms of learning inherently bound in time & space – regional context for learning & knowledge International research transferred to specific localities through universities International research transferred to specific localities through universities

50 Forces at Work – The New Culture The new student – decentred world & multiple lives The new student – decentred world & multiple lives Diverse forms of preparation Diverse forms of preparation Episodic & fragmented engagement not holistic, intense, linear forms of learning Episodic & fragmented engagement not holistic, intense, linear forms of learning Research generated in heterogeneous environments of producers, brokers and users Research generated in heterogeneous environments of producers, brokers and users Knowledge is more contextualised & intensely reflexive Knowledge is more contextualised & intensely reflexive Communicative culture – from cerebral, objective, codified & symbolic (logos) to visual, intuitive, volatile, subjective Communicative culture – from cerebral, objective, codified & symbolic (logos) to visual, intuitive, volatile, subjective Wider social distribution of knowledge generation Wider social distribution of knowledge generation (source: Scott, 2004) (source: Scott, 2004)

51 The Knowledge Economy Factor R&D, Universities, Small Firms, Skills Sets and ICT A Role For Learning, Research and Higher Education; Catalysts For An Entrepreneurial Culture ? The East of England


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