Constructing Regional Advantagedimetic.dime-eu.org/dimetic_files/Cooke Regional advantages.pdf ·...
Transcript of Constructing Regional Advantagedimetic.dime-eu.org/dimetic_files/Cooke Regional advantages.pdf ·...
Constructing Regional Advantage:Professor Phil Cooke, Director, Centre for AdvancedStudies, Cardiff University
What Is Constructed Advantage?
Constructed Advantage – Although Porter talks of innovation > productivity >growth, it is not proven.The ‘new competitive advantage’ (Best, 2001)includespublic goods support, the dynamics of constructed advantage. This knowledge-based construction requires interfacing developments in various directions: Economy – regionalization of economic development; ‘open systems’ inter-
firm interactions; integration of knowledge generation andcommercialization; smart infrastructures; strong local and global businessnetworks.
Governance – multi-level governance of associational and stakeholderinterests; strong policy-support for innovators; enhanced budgets forresearch; vision-led policy leadership; global positioning of local assets.
Knowledge Infrastructure – universities, public sector research,intermediary agencies, professional consultancy, etc. have to be activelyinvolved as structural puzzle-solving capacities.
Community and culture – cosmopolitanism; sustainability; talented humancapital; creative cultural environments; social tolerance. This public factorprovides an exemplary background for constructed advantage dynamics ina nexus of university-industry-government relations
Interacting, these engender Constructed Advantage to regions.
Knowledge Economy Poses New Problems:the early model
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RIS Characteristics Grassroots Integrated Dirigiste
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Initiation Local Multi-level Central
Funding Diffused Guided Determined
Research Applied Mixed Basic
Coordination Low High High
Specialisation Weak Flexible Strong
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The Classic Regional InnovationSystem
R e g io n a l s o cio e co n o m ic a n d c u ltu ra l s e ttin g
K n o w e ld g e , re s o u r c e s a n d h u m a n
c a p ita l flo w s a n d in te r a c tio n s
K n o w le d g e a p p lica tio n & e xp lo ita tio n s u b s y s te m
K n o w le d g e g e n e r a tio n & d iffu sio n su b s y s te m
fir m s
c o lla b o r a to r s
c u s to m e r s
C o m p e tito r s
c o n tr a c to r s
T e c h n o lo g y
m e d ia tin g
o rg a n is a tio n s
w o rk fo rc e
m e d ia tin g
o rg a n is a tio n s
P u b l ic R e s e a rc h
o rg a n is a tio n s
E d u c a tio n a l
o rg a n is a tio n s
F ig 1 . T h e R e g io n a l In n o v a t io n S y st e m : A sc h e m a t ic i l lu s t r a t io n
Knowledge Economy Problem Tendencies: Co-ordinatedmarkets to Liberal-markets
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Institutional RIS (IRIS) Entrepreneurial RIS (ERIS)
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Research & Development Driven Venture Capital Driven
User -Producer Relations Serial Start -ups
Technology -Focused Market -Focused
Incremental Innovation Incremental & Disruptive
Bank Borrowing Initial Public Offerings
External Supply -Chain Networks Internal EcoNets *
Science Park Incubators
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Rather Like Closed versus OpenInnovation
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Closed innovation Open innovation
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Strategic R&D – core business strategy Firms select desired technologies
Firms perform R&D in -house Technology acquisition
Firms put technologies in products Firms market products
Product revenues fund additional R&D R&D Outsourcing
Global isation (1) adjusts Globalisation (2) taps
products to markets global talent pool s
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Tendency Towards Networking G R A S S R O O T S N E T W O R K D I R I G I S T E
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G O V E R N A N C E O F E N T E R P R I S E
I N N O V A T I O N S U P P O R T
High Creative Class 1991 Associated withPopulation Growth 5-10 Years Later
R2 = 0.1165
y = 5.631x - 3 .52
-10
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0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60
Creative LQ '91
po
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High Creative Class in 1991 Has Modestly PositiveAssociation with Employment Growth 96-03
R2 = 0.0316
y = 7.1723x - 0.5994
-20
-10
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0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60
Creative LQ '91
Em
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3
Cardiff
US Industrial R&D Outsourcing 1981-2001
Company Size 1981 1989 1999 2000 2001
<1,000 employees 4.4 9.2 22.5 22.1 24.7
1,000-4,999 6.1 7.6 13.6 15.2 13.6 5,000-9,999 5.8 5.5 9.0 8.3 8.9 10,000-24,999 13.1 10.0 13.6 14.0 13.0
25,000 + 70.7 67.7 41.3 39.5 39.0
Table 1: Percentage of US Industrial R&D By Size of Enterprise
Source: NSF (2003-5). Research & Development in Industry, 2001.
Smaller Firms Grow R&D Fast
Size of firm 1997 1998 1999 2000* 2001* Change
Fewer than 25 2,536 3,804 5,579 6,176 4,346 71%
25 to 49 2,455 2,525 3,824 4,507 3,375 37%
50 to 99 3,415 5,155 5,779 6,533 7,382 116%
100 to 249 5,907 6,622 5,707 8,118 11,634 114%
250 to 499 5,229 5,522 6,463 6,731 7,832 50%
Total 19,542 23,627 27,352 32,065 34,569 77%
Table 2. R&D Expenditures by Small US Companies
(Millions of constant $1992/ *$1996 )
Source: NSF (2003-5). Research & Development in Industry, 2001.
Tendencies in R&D Outsourcing Highlight changing RISsupport needs for ‘Knowledge Entrepreneurship’
FDI redirects to Asia, especially China &India
SME subcontracting/outsourcing lessprominent in manufacturing
But demand for research-based knowledge Universities and knowledgeable research
firms Incubation, entrepreneurship, finance gaps
Asymmetric Innovation Sub-systems
Knowledge exploration & exploitationsub-systems
UK biotechnology strong in laboratoryand DBF exploration
UK Biotechnology exploitationcapabilities less strong
Biotechs & VCs disappointed at slowpace of commercialisation
Vertical Platform Policy Asymmetry
Decapitation Model
Company US HQ Details
Solexa Hayward, CA Retains R&D in Cambridge, U K
Merger with Lynx Therapeutics Domantis Waltham, MA Retains R&D in Cambridge , UK
Lorantis Bloomsbury, NJ Retains R&D in Cambridge, UK
Acquired by Celldex Therapeutics
BioVex Cambridge, MA Retains R&D in Oxford, UK
Zeneus Frazer, PA Retains R&D in Oxford, UK
Acquired by Cephalon
Cyclacel Short Hills, NJ Retains R&D in Dundee, UK
Reverse merger into Xcyte Therapeutics, Seattle, WA
Microscience Gaithersburg, MD Retains R&D in Wokingham, UK
Acquired by Emergent BioSolutions
Table 3: R&D Decapitations of UK Biotechnology Businesses, 2005
Source: BioCentury (W ard, 2005)
Proximity Platforms: Symmetric Sub-systems Harmonious interaction between
entrepreneurship and the innovationsystem
Entrepreneurs proximate to innovationsystem hub
System hub has interactive policyinstruments
Innovation Policy Platforms based on‘Related Variety’
Micro-elektronicaNanotechnologie
TelematicaCommunicatie
E-security
Mechatronica
Feed – food- health
Lifesciences
L-SEC
DSP-ValleyLeuven.Inc
Lateral Cluster Platform Policy
Innovation Platform Thinking in Berzelius Medical SciencePark, Linköping
Saab Military Technology Downsizing – fails tocompete with GE & Siemens in MedicalTechnology
Local ‘stakeholder platform’ replaces Saab asa new managerial regime “governing” themedical cluster
Provides resources for new science parkinnovation platform (central governmentsupport)
(J. Feldman, EPS, forthcoming)
Industry, Stakeholder & Policy Platforms forConstructed Regional Advantage
Industry Platform
ICT Biotech Finance
(Related Variety)
Policy Platform
Creatives Talent Infrastructure
(Vertical & Lateral)
Stakeholder Platform
University Inustry Governance
(Triple Helix)
REGIONAL
CONSTRUCTED
ADVANTAGE
Constructed Advantage Links PlatformPolicies
Decapitation is a growing danger in a SmithianGlobalisation of Knowledge Capabilities –offshore platforms
Proximity Platforms – strength from ‘relatedvariety’ and ‘absorptive capacity’ towardsinnovation by entrepreneurs
Policy Platform – Triangular Interaction of:1) Stakeholders,2) Technologies,3) Support Instruments.