National Innovation Systems

1. National Innovation Systems Samantha Pinto 301087184 Jiaxiao Zhang 301173206

2. Agenda • Summary of article 1 • Reflection 1: examining China and India’s advantages and disadvantages of their National Innovation Systems and economic growth • Summary of article 2 • Reflection 2: suggesting how China and India can improve their National Innovation Systems

3. Article 1 Continental, national and sub-national innovation systems - complementarity and economic growth Chris Freeman

4. What is a national innovation system? Narrow - Institutions that insist on promoting the acquisition and dissemination of knowledge while being the main sources of innovation depict a narrow national system of innovation. Broad - the scale, direction and relative success of their innovative activities are determined with the help of the system’s political, cultural influences and economic policies.

5. Freeman's article - Role of NIS • Explains the role of a country's innovation system on its economic growth • Significant divergence in economic growth rate between developed and developing countries over time • Innovation plays a key role • Governance system aligned with industry

6. BRITAIN • Leading economy in the 18th century • Science was worshipped • Congruence of science, technology and entrepreneurship

7. UNITED STATES • Influenced by the British economy • Technology bootlegged from Europe • Absence of a feudal system • Abolition of slavery

8. LATE COMER COUNTRIES • Catch up economies- Japan, Korea, Taiwan • Invested heavily in in house R&D and education • Imitation ( less costly) • Downfall: Large scale production without proper knowledge of technology buildup • Solution: Active learning • ex. Eastern Asia

9. Reflection 1 Common advantages of China and India • Huge market demands and cheap labour force • attract investments from developed countries • access to newly advanced technology, technical skills and knowledge. • Acquisition instead of innovation on technology and knowledge • lower the risks and save the time, effort and cost for research and development. • move more rapidly to large-scale production and achieve economies of scale.

10. Reflection 1 Common disadvantages of China and India • Education systems • relatively unsuccessful compared to developed countries. • limit the abilities to innovate and less support to NIS • Roles in the world’s economic competition • limited as simple manufacturers and service providers. • small economic value and gross margins

11. Reflection 1 Compare China and India- China • More developed innovation infrastructure • average communication resources owned per person • information and knowledge can be transmitted more efficiently and on a larger scale • Higher total input and output for innovative activities.

13. Reflection 1 Compare China and India - India • Better higher education • overall quality of higher education • cultivating R&D professionals and intensifying its scientific research • High-tech industries account for higher proportions in India’s total GDP • 4.75% in India’s total GDP compared to only 4% for China. • more knowledge based and innovative economy • better potential in becoming a knowledge intensive economy.

14. Article 2 Determinants of National Innovation Systems: Policy implications for developing countries Frank L Bartels, Hinrich Voss, Suman Lederer & Christopher Batchtrog

15. Purpose of the study • Suggest certain determinants that exist in high performing National Innovation Systems of developed economies • Use these to provide valuable insight to the policy and management of National Innovation Systems in developing countries with less than efficient economies.

16. Study: Variables of NIS development • ‘structural dynamics of knowledge management’ • ‘structural dynamics of decision making’ • ‘structural dynamics of government– business relations’ • ‘structural dynamics of the market’

17. Study: Variables of NIS development Statistically significant: • ‘structural dynamics of knowledge management’ • ‘structural dynamics of decision making’ • ‘structural dynamics of government– business relations’ • ‘structural dynamics of the market’

18. Findings of the study Key determinants of NIS: • knowledge management • education system • juridical autonomy of institutions • clear regulations • low red tape • sophisticated markets and investments

19. Reflection 2 Consistent findings with the 1st article • Importance of government regulation and support to improve a country’s NIS • creating and promoting an innovative culture • giving clear instructions to the markets • making more tangible and intangible investments. • An effective education system leads to competitive advantages when improving its National Innovation System. • Provides high quality education • Importance of scientific outputs • intellectual property and patents • contribute to economic growth

20. Reflection 2 New findings in 2nd article • A competitive market condition can force innovation • firms have to innovate in order to survive in a highly competitive environment. • Negative relationship between technological competitiveness and age demographic • knowledge, especially in its tacit form, are more likely to be embedded in a younger population rather than an older one.

21. Reflection 2 Strategies for both China and India to improve their National Innovation Systems • Invest more into their education systems • especially in high level education • improving the quality of education instead of the quantity • Government regulation and support • China: developing high-tech industries • India: building additional and better communication infrastructure; increase the quantity of scientific outputs in India with incentives • Demographics • India: young demographic indicates a relative advantage in technological competitiveness. • try to maintain this young demographic with incentives for appropriate birth rate per family • China: be cautious about the aging of the population.

22. Questions and Comments Thanks