The role of Regional Innovation Systems in a Globalising Economy: Comparing Knowledge Bases and Institutional Frameworks

1. The role of Regional Innovation Systems in a Globalising Economy: Comparing Knowledge Bases and Institutional Frameworks of Nordic Clusters Bjørn T. Asheim & Lars Coenen Based on and financed by project ‘Nordic SMEs and Regional Innovation Systems’ (Nordic Innovation Centre)

2. CIRCLE • Centre for Innovation, Research and Competence in the Learning Economy • New centre of excellence in innovation system research at Lund University • One of four centres in Sweden • Uppsala, Chalmers and KTH

3. Outline of the presentation • Project ‘Nordic SMEs and Regional Innovation Systems’ • aim / case studies / final report • findings / policy recommendations • Comparing Knowledge Bases and Institutional Frameworks of Nordic Clusters

4. Project aim: To investigate the existence of similarities and differences vis-à-vis competitiveness and innovativeness between clusters of Nordic SMEs in different regions and sectors and to compare the extent to which regional factors underlie the success/failure of clusters in comparison to industry/sector specific factors

5. Structure of final report • Introduction • Conceptual clarification • Summary of case studies • Comparative case analysis • Policy recommendations • Downloaded from my home page at Lund University

6. The case studies

7. Comparative analysis: • SMEs, innovations and innovation systems: a broad perspective • Across-the-board innovativeness in high, medium and low tech SMEs as a basis for competitiveness • Multi-scalar SME-innovation systems linkages in the light of spatially distributed knowledge reservoirs • Geographical differentiation based on industrial knowledge base

8. Comparative analysis: • SMEs, clusters and cluster life-cycles • Horizontal vs. Vertical collaboration in innovation • Relationships between SMEs and large firms • Cluster life cycles and the need for different policy approaches

9. Comparative analysis: • Social capital and trust: cornerstones for regional collaboration in innovation • Understanding innovation as interactive learning implies that cooperation is necessary for the competitiveness of SMEs • Social capital is defined as features of social organisation that facilitate action and cooperation for mutual benefit such as networks, shared norms and values and trust • Initiatives in social networking arrangements • seem to work well in a Nordic cluster context

10. Comparative analysis: • SMEs and the regional knowledge infrastructure • Research collaboration between SMEs and knowledge infrastructure is not a cure-all • University spin-offs is a typical high-tech phenomenon. Managerial skills are often lacking • Regional supply of skilled labor most important general innovation support that universities can provide SMEs

11. Knowledge based versus learning economies: What’s the difference? • Most strategic resource  knowledge • Most fundamental activity  learning • But: • Learning economy: innovation across-the-board • Knowledge based economy: focus on high-tech

12. Science base vs knowledge base • Important to distinguish between: • Science base • Knowledge base And between: • R&D intensive industries (OECD view) • Knowledge intensive activities

13. Distributed knowledge base • Transition from an internal knowledge base of a firms to a distributed knowledge base of firms where the whole value system of a firm or value chain of a product must be taken into consideration when the knowledge intensity of a product is determined • More and more highly complicated combinations of different knowledge types codified (embodied and disembodied), artisan and experience based, tacit knowledge

14. Distributed knowledge base • The knowledge intensity enters as embodied knowledge incorporated into machinery and equipment or as intermediate inputs (components and materials) into production processes of other firms in the value chain/cluster • This demonstrates that the relevant knowledge base for many industries is not internal to the industry, but is distributed across a range of technologies, actors and industries, making the OECD ranking of R&D intensive industries less relevant

15. Theoretical perspectives: • Different types of RIS (=systemic linkages and relations between regionally dominant production structures and knowledge infrastructures) • Territorially embedded RIS (’grassroots RIS’) • Regional networked innovation systems (’network RIS’) • Regionalised national innovation systems (’dirigiste RIS’)

16. Knowledge bases, clusters and RIS • The relevance of different types of RIS must also be placed in a context of the knowledge base of various industries • Innovation processes of firms are strongly shaped by their specific knowledge base • Distinguish between two types of knowledge base: a) analytical (science based) b) synthetic (engineering based)

17. Analytic versus synthetic knowledge base: What’s the difference?

18. Clusters - RIS • The different knowledge bases of industries have implications for the relations between clusters and RIS as well as for the definition of a cluster • Distinction between: - The existence of ’pure’ regional clusters where relations to RIS are established at a later stage of a cluster’s life cycle in order to support localised learning and innovation in the cluster (auxiliary), and - The existence of relations between clusters and RIS from the emergence of the cluster as a necessary input in the development of the cluster (integrated)

19. Clusters - RIS • The traditional constellation of industrial clusters surrounded by innovation supporting organisations in a RIS is normally found in contexts of industries with a synthetic knowledge base • The existence of RIS as a necessary part of the development of an emerging cluster will normally be the case of industries based on an analytical knowledge base

20. Relationship RIS-cluster • synthetic knowledge base: tendency for loose coupling, auxiliary configuration • analytic knowledge base: tendency for necessary coupling, integral configuration

21. Clusters and localisation economies (specialisation) • Sectoral specialised clusters exploit localisation economies • Sectoral specialisation can be the result of different industrial development paths • In traditional cluster-RIS relations, based on industries with a synthetic knowledge base, the logic behind building RIS is to support and strengthen localised learning of existing industrial specialisations in a region, i.e. to promote historical technological trajectories based on ’sticky’ knowledge in the region

22. Clusters and localisation economies • In contexts of relations between clusters and RIS as a necessary condition for the emergence and growth of the clusters it is a question of promoting new and emerging economic activity based on industries with an analytical knowlegde base, requiring close and systemic industry-university cooperation and interaction in e.g. science parks, located in proximity of knowledge creating organisations (e.g. (technical) universities

23. Clusters and urbanization economies (diversity) • Clusters can also be found in regions exploiting urbanization economies • Such regions, constituted by an urban agglomeration, are characterised by a diversified industrial base in contrast to the specialised base of e.g. industrial districts’ type of clusters • I.e. Different historical and emerging technological trajectories co-exist

24. Clusters and urbanization economies • Within urban agglomerations one can identify the existence of relations between clusters and RIS as a necessary condition for cluster development as well as traditional clusters which established links with the RIS at a later stage in their life cycle. However, one can argue that the diversity of urbanization economies is especially important in the promotion of radical innovations (cities as creative nodes/geography of talent), and, thus, of great significance for industries based on an analytical knowledge base

25. Institutional frameworks ((Soskice) Peck, 2003)

26. Varieties of capitalism/varieties of regional innovation systems • Useful in comparative analysis of countries, no focus on regions • Strong dichotomization • Inert and inherited institutional landscape (policy learning) • Application in regional context thus far: • Entrepreneurial Regional Innovation Systems (ERIS) versus Institutional Regional Innovation Systems (IRIS) (Asheim & Gertler, 2004; Cooke, 2004)

27. IRIS (Cooke 2001/2004)(associated with coordinated market economies) • R&D driven • User-producer relations • Technology focused • Incremental innovation • Bank borrowing • External supply-chain networks • Science park

28. ERIS/New economy innovation system(associated with liberal market economies) • Venture capital driven • Serial start-ups • Market-focused • Incremental and disruptive • Initial public offerings • Incubators (university – industry relations)

29. Knowledge bases – institutional frameworks • Synthetic knowledge base - IRIS • Analytical knowledge base - ERIS ): Regional differentiation of innovation policies (US/European blend) at intra- and interregional levels within countries, representing different degrees of efficiency with respect to knowledge exploration, examination and exploitation ): Regionalisation of regional policies (innovation, entrepreneurship and talent are increasingly important) in many countries