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									                        EUROPOS SĄJUNGA
                          Europos socialinis        MYKOLO ROMER
                            fondas                   UNIVERSIT ETAS

   Innovation: international
aspects; lessons and perceptions

               Dr Lynn Martin, Director of
               Entrepreneurship and Innovation
               University of Central England, UK
Convergence – which country?
1.   “Our country‟s ability to compete in the global economy largely
     and increasingly depends on creating higher levels of value added
     through innovation”
2.   “This nation can no longer rely on manufacturing.. the only way
     forward for us during global competition is to focus on becoming
     the number 1 global service economy…”
3.   “The important issue is how to formulate policies to support a
     knowledge-based economy and society if we are to be
4.   “We are developing as a knowledge-based society. Technology
     and innovation policy improves competitiveness and development
     of the economy and society; with an innovation environment rated
     one of the best in the world, globally our R&D expenditure / GDP
     was third highest in the world ..
Innovation systems

   Reviewing national innovation often forms a
    mapping of systems and instruments.
   Mapping the national system of innovation
    implies a set of data placed on a matrix defined
    by two sets of parameters - the functions of the
    system and the stakeholders in the system .
   There are also thematic maps related to
    sectors or scientific fields (Mullins Consulting,
National systems
Analysis often focuses on:

   the Innovation policy framework,
     –   the range of major actors in innovation in the region or country,
     –   policy both old and new,
     –   data on innovation performance to identify strengths and weaknesses
         and the legal regulatory and administrative environment.
   the human resources for innovation
     –   assessed and supported via teaching and training for innovation and
         via innovation management tools / ICT diffusion
   the business innovation support measures.
     –   the development of university-industry collaboration for knowledge
     –   better support for technology based start ups via a range of measures
         including business incubation, plus
     –   encouragement of business networks and sectoral clusters
Measures and assessments

   ‘hard factors’
    –   assessed quantitatively.
    –   Examples - numbers of start-ups, numbers of patents etc.
   ‘soft factors’
    –   the entrepreneurial culture, whether key actors in the national
        innovation system are risk averse. This does not only include
        potential entrepreneurs but also those providing money,
        driving and implementing public policy.
   Contexts.
    –   local, regional and national contexts.
    –   unfortunately even if you are not interested in the global
        context, actors within the global context may be interested in
    European perspectives

   The European Council defined its objectives in terms of
    employment, economic reform and social cohesion
    (Lisbon, 2001)
           “to become the most competitive and dynamic knowledge-based
            economy in the world, capable of sustainable economic growth
            with more and better jobs and greater social cohesion”.
           “to create some 15 million new jobs by 2010”
   But Europe still needs to gain ground in innovation, is
    outperformed by the USA, by Japan etc in aspects of
    innovation (EIS, 2005).
   Developed economies - 6 countries, the USA, Japan, Germany, the UK,
    France and Switzerland where 86% of the top 1000 Global companies
    are located (EIS, 2005).
   Japan - economically well-developed, technologically competitive G7 and
    OECD member, with a strongly centralised and active innovation policy..
   Korea, Taiwan and Singapore - 3 Asia „tigers‟, rapid GDP growth in the
    last 30 years due to strong FDI, R&D joint ventures and US co-operation
   China and India, large populations and landmass, rapid, uneven growth.
    Predicted to be dominant economies by 2050; a challenge for co-
    operation in high-tech and a threat for EU and USA - outsourcing
                                                          (Hira, 2003; EU, 2004).

   Thailand and Malaysia fast GDP growth starting from a low base;
    combination of technologically modern and traditional industries.
    Indonesia is less advanced in development. All three countries are now
    pursuing or introducing systematic innovation policies.
Task environment?

       the rise of Asian economies as dominant forces in the world economy
       the growth and dispersion of information communication technologies
       the changes in global financial systems and processes
       changes in international regulatory standards, developing international
        accounting standards, common patent and intellectual property
       mobility of labour, establishments and processes
       the role of small firms worldwide as drivers of innovation
       While other related aspects have key impacts on innovation worldwide; these
    –       health issues, Avian flu, HIV Aids
    –       the environment, Kyoto protocols and the development of new energy sources
    –       social changes implicit in the development of an innovation society and an
            entrepreneurial culture
    –       enterprise size and business life cycle, succession etc, e.g., for Asia-Pacific regions
Innovation – impacts for Europe
 the drivers in innovation are shifting

   Services rule! User-based innovation, mergers - manufacturing and
    services, multidisciplinary groups public-private sector partnerships,
   hard and soft factors; talent investment, infrastructure
   Too much single focus in policy re innovation,
   great learning points can be gained from other countries but
    regional aspects are important
   High bureaucracy with low flexibility in the system
   globalisation of innovation and small firm-large firm innovation
   new European open source platforms – NESSI, digital business
   the enterprise culture needs to be present from early years to old
Trends include
   The rise of service and user-based innovations,
    –   Customer-based supported by technology
    –   service based innovation or manufacturing plus service
    –   formed around groups, by multidisciplinary groups and by public and
        private sector partnerships, by large plus small firm connections
   globalisation of innovation
    –   General convergence of aims
    –   Rise of new forms of working from Asia
   New technologies
    –   emergence of new European open source meso-platforms may
        build wide-ranging communities across different innovation actors
    –   New model from India and china
   Need for the enterprise culture from early years to old age.
Innovation effects
Innovation trajectories

   Robotics – social impacts of humanoid robots;
    economic impacts of automation
   Biotechnology – animal testing in the UK
   Genetically modified Organisms – tested
   Testing and cell phones
   The internet and pornography
Innovation perceptions and reality?
   Surveys in five countries to identify
     –   what the word „innovation‟ conveys,
     –   how it is perceived and
     –   who connects with it
   Clear indications from the Scoreboards, from the USA and Finland
    in recent reports that innovation is about
             Services, customers and groupings
             Involves talent, investment and infrastructure
             People, creativity, talent
             Better products better services better ways to do business, more choice
              more money
             Small firms, small firms and large firms, public and voluntary sector
Innovation is?
   Perceptions of innovation include:
    –   The man in the white coat / mad inventor
    –   New leading edge technologies
    –   New ways to do business
    –   New products
   Business sectors seen to be innovative
    –   Information technology
    –   Nanotechnology
    –   Biotechnology,
    –   Automotive, aerospace, manufacturing, engineering
Perceptions - Innovation is

   found in?
    –   large firms, multinationals
    –   companies with large research and development
    –   the USA and Japan
   Not found in
    –   Small firms
    –   Public sector/ education etc.
    –   UK / Europe
The perception? That Innovation is
   About
    –   Science and technology
    –   Money and large scale investment
    –   Products not services
    –   Hard-headed business issues

   Not about
    –   People
    –   Most people, e.g., women, ethnic minorities
    –   Service based businesses
    –   Passion and belief, Trust and values
    –   The public or voluntary sector
Innovation is

   Crucial to the future of UK manufacturing industry but
    –   Larger companies capable of forming productive links with science
        base; small firms need the help of brokers or intermediaries
    –   Need to recognise existing strengths- don‟t stick a fork in the toaster
   Measures
    –   Using key examples, a national network of intermediate institutes with
        common identity, etc regional variations for local circumstances.
    –   National database to allow manufacturers to locate providers of
        technological expertise and capability.
    –   Focus on de-regulation and simplification of bureaucracy
The realities? Innovation is

   found across all industries
    –   The hairdressing sector is worth 59 billion dollars in the USA
        and is a source of considerable R & D, copyright and patents
   found across gender and ethnic groups
    –   Innovators and entrepreneurs come from all walks of life and
        are rarely mad inventors, Mrs Ann Woods, CEO Ragdoll
   The problem? Raising aspirations and providing a
    background for them to be realised.

   The right environment helps the level of
    entrepreneurship, i.e., finance , flexibility, low
    bureaucracy, culture
   Focus broadly on international best practice and
    regional need
   Tackling issues connected to finance, innovation and
    enterprise ambition and diversity are key factors in
   Finding a solution to the regional paradigm
   Facilitating networking and the evolution of digital
    business ecosystems.

   The European Innovation scoreboard
   The Value Added Scoreboard
   The OECD benchmarking ands scoreboards
   The recent reports form the USA, e.g. from the Council
    of Competitiveness
   The comparative report from Finland by Kotilainen,
    (2005), for TEKES the National Technology Agency of
    Finland, September; Helsinki
Policy responses
Policy needs to:

   include both hard and soft factors to have impact on innovation
    and entrepreneurship
   Include all forms of innovation and stages of the innovation
    process e.g., no over focus on specific sectors or on invention
    rather than commercialisation or vice versa,
   learn from both established countries like the USA and newer
    economies like Korea, Singapore and Taiwan but regional aspects
    are important
   combine less bureaucracy with more flexibility in systems,
    allow budding entrepreneurs and innovators to grow new business
The Bank of England (1996)

   UK = poor place to start a business
   Suggestions
    –   Increase profile of Business Links in assisting early stage
        technology-based firms;
    –   Using successful „serial entrepreneurs' to pass on their
        expertise and enthusiasm;
    –   Establishing a UK corporate venturing group to promote
        collaboration between large and small firms;
    –   Develop informal venture capital (Business Angels) and
        encouraging the banks to develop packaged finance for
        technology-based firms.
    –   Remove monopoly in the high street

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