1. Technopolis 1 Is Innovation Theory Yet Catching Up with Policy Practice? Erik Arnold Six Countries Programme 25th Anniversary Conference Stockholm 15 - 16 January 2001

2. Technopolis 2 Tell them what youre going to say. Say it. Then tell them what you said … Theoretical developments Policy trends Whos winning? What do we do next?

3. Technopolis 3 It must be easier in physics. In economics, the facts keep changing … Firm behaviour is changing Outsourcing Networking Externalisation and internationalisation of innovative activities Changes in industrial structure Primaries to secondaries to tertiaries Shifts in branch composition within these Changes in spatial relationships Transport (some of which may be environmentally unsustainable) Telepresence, tele-X … Technology an important factor enabling such changes in facts

4. Technopolis 4 Innovation used to be such a simple process …

5. Technopolis 5 Then it got more complex … and we almost began to notice stocks as well as flows of knowledge

6. Technopolis 6 The firm has been reinvented - from rational robot to an institution containing people Bounded rationality Learning and intellectual capital Capabilities Path dependence and technological trajectories Interdependence of internal capabilities, external networks, infrastructures and history

7. Technopolis 7 Moving the focus from the market to the system changes rationales for policy Market failure - mostly about basic research Indivisibility Inappropriability Uncertainty Systems failure - mostly about inadequate performance Failures in infrastructural provision and investment Transition failures Lock-in failures Institutional failures

8. Technopolis 8 The New Production of Knowledge has given us a less ahistorical account of knowledge production and the knowledge society than the Endless Frontier...

9. Technopolis 9 Of course, reality is not binary - welcome to Modes 1.2 and 1.8!! Adtranz Railway Technology Transport & Traffic Planning SJ Banverket KFB Light Weight Construction Sound and Vibration Electrical Machines Drives JVG 80% Mode 2Mode 2 80% Mode 1

10. Technopolis 10 Descriptively, the National Innovation System is a huge leap forward, though there is a lot to do to make it more predictive Framework Conditions Financial environment Taxation and incentives Propensity to innovation and entrepreneurship Mobility... Education and Research System Professional education and training Higher education and research Public sector research Company System Large companies Mature SMEs New, Technology- Based Firms Intermediaries Research Institutes Brokers Consumers (final demand) Producers (intermediate demand) Demand Banking, venture capitalIPR and information systems Innovation and business support system Standards and norms Infrastructure

11. Technopolis 11 Innovation theory and policy alike have been getting increasingly complex...

12. Technopolis 12 Since Vietnam, science has become repoliticised under the banner of relevance From science policy to innovation policy Programmes Explicit links to social needs - foresight, consensus conferencing, societal (especially industrial) representation in the governance of science and innovation New Public Management Evaluation

13. Technopolis 13 Under New Public Management, stakeholders should be better connected to those who execute policy ElectorateParliamentGovernmentMinistriesProgramme managers Projects or actions Delegated Authority Responsibility

14. Technopolis 14 The links are formed as a series of contracts

15. Technopolis 15 And a programme management process allowing monitoring and learning

16. Technopolis 16 Innovation policy has focused strongly on linkage... Institutional linkage Science parks Technology Bridges Industrial Liaison Competence centres R&D linkage Collaborative R&D Link programmes Network R&D Innovation linkage Developmental procurement Demand management Supplier development Network and cluster programmes

17. Technopolis 17 Policy makers have begun to reintegrate our understanding of technology... Away from a narrow focus on hardware and software Towards the scientific study of the practical or industrial arts Starting to heal the rift between engineering and management in the 1920s Learning from the example of the soft production technologies imported from Japan Putting in place a policy practice that (re)integrates engineering and business

18. Technopolis 18 Policy makers have got to grips with company capabilities in rather more specific way than the theoreticians

19. Technopolis 19 And developed a wide repertoire of policy instruments to develop capabilities

20. Technopolis 20 OECD countries increasingly use mechanisms for user-direction of state R&D

21. Technopolis 21 So whos winning - innovation theoreticians or policymakers? Policy seems to have been theory- and ideology-led in the post-War period Policy makers drew ahead in the 70s and 80s Partly out of a determination to make the linear model work (eg science parks) Partly through imitation of catch-up tactics from Japan NIS thinking starts to explain why many recent policy actions make sense Spill-overs now happening, eg to funding for development Rebalancing of basic science funding taking place without theoretical basis

22. Technopolis 22 Whats missing? Moving from description to prediction Moving from an indicators-based approach (CIS, etc) to explain the innovation- performance link at the micro level, to generate more concrete policy recommendations Articulating the meaning of the NIS in contexts - branches, stages of catch-up and development Conceptualising the stock of knowledge, as against the flow Operationalising the opportunity to do kan-ban on the NIS