Reg

iona

l Inn

ovat

ion

Pol

icy

For

Sm

all-

Med

ium

Ent

erpr

ises

Edited by

Bjø

rn T

. Ash

eim

Prof

esso

r, C

entr

e fo

r T

echn

olog

y, I

nnov

atio

n an

d C

ultu

re, U

nive

rsity

of

Osl

o, N

orw

ay, a

nd P

rofe

ssor

, Dep

artm

ent o

f So

cial

and

Eco

nom

icG

eogr

aphy

, Uni

vers

ity o

f L

und,

Sw

eden

Arn

e Is

akse

nA

ssis

tant

Pro

fess

or, A

gder

Uni

vers

ity C

olle

ge, a

nd S

enio

r R

esea

rche

r,S

TE

P G

roup

, Nor

way

Cla

ire

Nau

wel

aers

Seni

or R

esea

rche

r, M

aast

rich

t Eco

nom

ic R

esea

rch

Inst

itute

on

Inno

vatio

nan

d T

echn

olog

y (M

ER

IT),

Uni

vers

ity o

f M

aast

rich

t, th

e N

ethe

rlan

ds

Fran

z T

ödtli

ngP

rofe

ssor

, Dep

artm

ent o

f City

and

Reg

iona

l Dev

elop

men

t, V

ienn

aU

nive

rsity

of

Eco

nom

ics

and

Bus

ines

s A

dmin

istr

atio

n, A

ustr

ia

Edw

ard

Elg

arC

helte

nham

, UK

. Nor

tham

pton

, MA

, USA

iÇ B

jørn

T. A

shei

m, A

rne

Isak

sen,

Cla

ire

Nau

wel

aers

, Fra

nz T

ödtli

ng 2

003

Con

tent

sA

ll ri

ghts

res

erve

d, N

o pa

rt o

f th

is p

ublic

atio

n m

ay b

e re

prod

uced

, sto

red

ina

retr

ieva

l sys

tem

or

tran

smitt

ed in

any

for

m o

r by

any

mea

ns, e

lect

roni

c,m

echa

nica

l or

phot

ocop

ying

, rec

ordi

ng, o

r ot

herw

ise

with

out t

he p

rior

perm

issi

on o

f th

e pu

blis

her.

Figu

res

Tab

les

Aut

hors

Abb

revi

atio

nsFo

rew

ord

Pub

lishe

d by

Edw

ard

Elg

ar P

ublis

hing

Lim

ited

Gle

nsan

da H

ouse

Mon

tpel

lier

Para

deC

helte

nham

Glo

s G

L50

lUA

UK

PA

RT

I S

ME

s, IN

NO

VA

TIO

N A

ND

RE

GIO

NS

: CO

NC

EP

TU

AL

BA

CK

GR

OU

ND

Edw

ard

Elg

ar P

ublis

hing

, Inc

.13

6 W

est S

tree

tSu

ite 2

02N

orth

ampt

onM

assa

chus

etts

010

60U

SA

The

rol

e an

d ch

arac

teri

stic

s of

SM

Es

in in

nova

tion

David Smallbone, David North and Ian Vickers

2 S

ME

s an

d th

e re

gion

al d

imen

sion

of i

nnov

atio

nB

jørn

T A

shei

m a

nd A

rne

Isak

sen

PAR

T I

I IN

NO

VA

TIO

N P

RO

CE

SSE

S A

ND

PO

LIC

Y C

ON

TE

XT

A c

atal

ogue

rec

ord

for

this

boo

kis

ava

ilabl

e fr

om th

e B

ritis

h L

ibra

ry

3 N

atio

nal a

nd r

egio

nal c

onte

xts

for

inno

vatio

nA

rne

Isak

sen

4 Innovation patterns of SMEs

Ale

xand

er K

aufm

ann

and

Fran

z T

ödtli

nglibrary of Congress Cataloguing in Publication Data

Reg

iona

l inn

ovat

ion

polic

y fo

r sm

all-

med

ium

ent

erpr

ises

/ ed

ited

by B

jørn

Ash

eim

. . .

let a

Ll

p. em.

Includes bibliographical references and index.

1, S

mal

l bus

ines

s -

Tec

hnol

ogic

al in

nova

tions

, 2. T

echn

olog

ical

inno

vatio

ns -

Gov

ernm

ent p

olic

y. 3

. Reg

iona

l eco

nom

ics,

1. A

shei

m, B

jørn

Ter

je.

PART II EVALUATION OF INNOVATION POLICY

INST

RU

ME

NT

S

5 Innovation policies for SMEs: an overview of policy

inst

rum

ents

Gio

acch

ino

Gar

ofol

i and

Ber

nard

Mus

yck

6 Results and impacts of policy instruments

Javi

er A

lfon

so G

il, A

nton

ia S

áez-

Cal

a, A

nton

io V

ázqu

ez-

Bar

quer

o an

d A

na Is

abel

Viñ

as-A

paol

aza

7 C

oher

ence

of i

nnov

atio

n po

licy

inst

rum

ents

Pou

l Rin

d C

hris

tens

en, A

ndre

as P

eter

Cor

nett

and

Kris

tian

Phi

lpse

n

HD

2341

.R35

34 2

003

338,6'42 - dc2l

2003

0439

06

ISB

N 1

843

76 3

98 2

Prin

ted

and

boun

d in

Gre

at B

ritai

n by

MP

G B

ooks

Ltd

, Bod

min

, Cor

nwal

l

v

VL

L

V11 ix xv

XV

ll 3

21 49 78 119

139

166

..

8. Towards a new paradigm for

innovation policy?9

Cla

ire

N a

uwel

aers

and

Ren

é W

intje

s

8.1

INT

RO

DU

CT

ION

Inno

vatio

n ra

nks

high

er o

n po

licy

agen

das

toda

y, a

t nat

iona

l, E

urop

ean

and regional

leve

ls. T

his

evol

utio

n is

nur

ture

d by

the

unde

rsta

ndin

g th

atin

nova

tion

is th

e ke

y to

eco

nom

ic d

evel

opm

ent f

or a

dvan

ced,

hig

h-w

ages

coun

trie

s, I

t is

beco

min

g vi

sibl

e th

roug

h a

grad

ual s

hift

in p

olic

y st

atem

ents

from

sup

port

for

R&

D a

nd te

chno

logy

dif

fusi

on to

the

prom

otio

n of

inno

-va

tion.

The

und

erst

andi

ng o

f in

nova

tion

as s

omet

hing

dif

fere

nt f

rom

R&

Dan

d th

e di

ffus

ion

of te

chno

logy

is g

aini

ng g

roun

d: in

nova

tion

refe

rs to

the

beha

viou

r of

ent

erpr

ises

, pla

nnin

g an

d im

plem

entin

g ch

ange

s in

thei

r pr

ac-

tices

in o

rder

to c

ome

up w

ith n

ew p

rodu

cts,

pro

cess

es, s

ervi

ces

or o

rgan

-iz

atio

n. T

his

chan

ge in

foc

us r

efle

cts

effo

rts

base

d on

the

view

that

innovation is an interactive, rather than linear, process (Rothwell

1992

). O

nth

is u

nder

stan

ding

, tra

ditio

nal s

cien

ce a

nd te

chno

logy

pol

icie

s do

not

off

erth

e un

ique

res

pons

e ne

eded

to s

uppo

rt in

nova

tive

prac

tices

, Ins

tead

, man

yot

her

elem

ents

in a

dditi

on to

sci

ence

and

tech

nolo

gy p

laya

rol

e in

inno

va-

tion and need to be tackled by innovation policy (Soete and Arundel

1993

;C

owan

and

van

de

Paa

I200

0). E

nvis

aged

in s

uch

an e

nlar

ged

fram

ewor

k,in

nova

tion

poliC

iès

are

stil

in th

eir

infa

ncy.

The

thes

is a

t the

cor

e of

this

boo

k is

that

the

vari

ety

of r

egio

nal c

onte

xts,

the

dive

rsity

in fi

rms'

abi

litie

s an

d at

titud

es, a

nd in

driv

ing

forc

es a

nd b

ar-

rier

s to

war

ds in

nova

tion,

pre

vent

s th

e se

arch

for

one

per

man

ent '

best

pra

c-tic

e' p

olic

y, v

alid

for

eac

h an

d ev

ery

situ

atio

n. T

his

is n

ot to

say

, how

ever

,th

at n

othi

ng g

ener

al c

an b

e co

nclu

ded

in r

espo

nse

to th

e qu

estio

n of

how

to im

prov

e th

e ef

fcie

ncy

of p

olic

y in

stru

men

ts to

sup

port

inno

vatio

n in

SME

s. R

athe

r, th

e re

sults

fro

m th

e an

alys

es o

f a

vari

ety

of in

nova

tion

polic

y to

ols,

bas

ed o

n th

e sa

me

conc

eptu

al b

ackg

roun

d, p

rovi

de a

n an

swer

to th

is c

ruci

al q

uest

ion.

The

var

ious

tool

s fo

rm a

ric

h sc

ope

of o

ppor

tu-

nitie

s fo

r be

tter

prac

tice

rega

rdin

g th

e po

licy

proc

ess

of a

ddre

ssin

g in

nova

-tio

n of

SM

Es

in th

eir

regi

onal

con

text

, If

one

may

cal

l the

shi

ft f

rom

alin

ear

mod

el o

f in

nova

tion

tow

ards

an

inte

ract

ive

one

a sh

ift i

n pa

radi

gm,

193

then

the

mai

n go

al o

f SM

EP

OL

is to

pro

vide

evi

denc

e fo

r a

sim

ilar

shift

tow

ards

a n

ew in

nova

tion

polic

y pa

radi

gm. T

he a

im o

f th

is c

hapt

er is

tobr

ing

to li

ght t

he m

ain

elem

ents

of

such

a n

ew p

olic

y pa

radi

gm,

The

poi

nts

of d

epar

ture

of

this

pol

icy-

orie

nted

stu

dy a

re th

at in

nova

tion

is a

goo

d th

ing

(bot

h on

the

regi

onal

and

fir

m le

vels

), a

nd th

at th

ere

is a

cal

lfo

r pu

blic

inte

rven

tion

in o

rder

to g

et m

ore

of it

. As

a ba

ckgr

ound

, bas

edon

the

liter

atur

e, th

e fi

rst t

wo

chap

ters

bui

ld o

n th

ese

basi

c as

sum

ptio

ns,

whi

ch in

clud

e tw

o m

ain

argu

men

ts,

Firs

t, C

hapt

er 1

arg

ues

that

SM

Es

are

an im

port

ant t

arge

t gro

up f

orin

nova

tion

polic

y, I

t pro

vide

s th

ree

dist

inct

ive

char

acte

rist

ics

of S

ME

s,w

hich

for

m th

e ba

sis

for

argu

men

ts a

nd im

plic

atio

ns f

or in

nova

tion

polic

ydi

rect

ed to

SM

Es,

The

se d

istin

ctiv

e ch

arac

teri

stic

s (c

ompa

red

to la

rger

firms) are: a limited resource base, a distinctive organizational culture

linke

d to

the

prox

imity

bet

wee

n ow

ners

hip

and

man

agem

ent,

and

a lo

wer

abili

ty to

sha

pe th

eir

exte

rnal

env

iron

men

t. T

hese

cha

ract

eris

tics,

whi

chca

ll fo

r di

stin

ctiv

e po

licy

appr

oach

es, a

re a

t the

roo

t of

the

mor

e in

form

al,

unco

difie

d ch

arac

ter

of m

anag

emen

t and

inno

vatio

n pr

actic

es in

SM

Es,

Als

o, th

is c

hapt

er w

arns

aga

inst

bol

d ge

nera

lizat

ions

on

'the'

SM

E: t

ech-

nolo

gy-d

rive

n, te

chno

logy

-fol

low

ing,

and

tech

nolo

gy-i

ndif

fere

nt S

ME

sha

ve v

ery

diff

eren

t nee

ds a

nd a

ptitu

des,

and

this

cal

ls f

or d

iffe

rent

type

s of

polic

y in

terv

entio

n, A

ccor

ding

to th

is v

iew

, the

thru

st o

f po

licy

appr

oach

essh

ould

be

twof

old:

to in

crea

se th

e av

aila

bilit

y of

ext

erna

l res

ourc

es f

orSM

Es

and

to d

evel

op th

eir

inte

rnal

abs

orpt

ive

and

lear

ning

cap

aciti

es(C

ohen

and

Lev

inth

al 1

990)

. Thi

s po

ints

to: (

i) th

e cr

ucia

l rol

e of

inte

rme-

diar

ies

who

, wor

king

on

the

basi

s of

per

sona

l tru

st r

elat

ions

, are

abl

e to

codi

fy S

ME

s' n

eeds

; (ii)

the

valu

e of

'pee

r' ne

twor

ks a

s le

arni

ng c

hann

els;

and

(iii)

the

key

role

of

hum

an c

apita

l in

SME

s,Se

cond

, cha

pter

2 a

sser

ts th

e im

port

ance

of

the

regi

onal

dim

ensi

on o

fin

nova

tion,

The

dis

cuss

ion

deve

lops

the

thes

is th

at p

roxi

mity

link

ages

can

be in

stru

men

tal i

n de

velo

ping

'lea

rnin

g fir

ms'

and

'lea

rnin

g re

gion

s'. A

lso,

broa

deni

ng a

nd e

xten

ding

the

conc

ept o

f cl

uste

rs to

war

ds o

ne o

f co

aliti

onde

velo

pmen

t poi

nts

to a

bro

ader

sco

pe f

or in

nova

tion

polic

y, th

at o

f su

p-po

rtin

g th

e so

cial

and

cul

tura

l asp

ects

of

inno

vatio

n an

d en

hanc

ing

soci

alca

pita

l as

a ke

y el

emen

t beh

ind

wel

l-fun

ctio

ning

reg

iona

l inn

ovat

ion

syst

ems,

Dev

elop

ing

colle

ctiv

e ca

paci

ties

and

netw

orki

ng p

ract

ices

at t

helo

cal l

evel

follo

ws

logi

cally

from

this

pol

icy

aim

, but

this

goa

l sho

uld

also

be c

ompl

emen

ted

with

sup

port

to th

e de

velo

pmen

t of

linka

ges

at n

atio

nal

and

inte

rnat

iona

l lev

els,

in o

rder

to a

void

bei

ng tr

appe

d by

too

stro

ng lo

cal

ties,

pos

sibl

y le

adin

g to

lock

-in

situ

atio

ns,

For the translation of broad policy orientations into operational guide-

lines

, we

use

the

find

ings

of

the

SME

POL

em

piri

cal a

naly

ses,

as

deve

lope

din

the

subs

eque

nt c

hapt

ers:

Cha

pter

3 f

or th

e an

alys

is o

f th

e va

riet

y of

I

1....

..,..

:",~

. .,.

'"..

regi

onal

con

text

s, w

hich

we

use

to b

uild

up

cont

ext-

sens

itive

pol

icy

reco

m-

men

datio

ns, C

hapt

er 4

on

the

patte

rns

of in

nova

tion

in S

ME

s, w

hich

ilus

-tr

ates

how

the

gene

ric a

ttrib

utes

of S

ME

s tr

ansl

ate

into

spe

cific

bar

riers

and

asse

ts f

or in

nova

tion,

and

Cha

pter

5 o

n th

e ty

polo

gy o

f po

licy

inst

ru-

men

ts, w

hich

allo

ws

us to

dev

elop

the

mai

n th

rust

of

our

polic

y ar

gum

ent

into

mor

e pr

ecis

e gu

idel

ines

for

eac

h ty

pe o

f in

stru

men

t. T

o bu

ild u

p ou

rre

com

men

datio

ns, w

e al

so c

onsi

der

the

refl

ectio

ns o

n re

sults

and

impa

cts,

and

'goo

d pr

actic

e el

emen

ts' o

f po

licy

tool

s, a

s de

velo

ped

in C

hapt

er 6

, as

wel

l as

the

thes

is p

ut f

orth

in C

hapt

er 7

on

the

impo

rtan

ce o

f co

mbi

ning

resp

onsi

vene

ss a

nd c

o-or

dina

tion

in th

e pr

ogra

mm

ing,

org

aniz

atio

n an

dim

plem

enta

tion

of p

olic

y.T

he p

rese

nt c

hapt

er is

org

aniz

ed a

s fo

llow

s, B

ased

on

the

findi

ngs

achi

eved

in th

is c

ompa

rativ

e re

sear

ch, s

ectio

ns 8

.2 a

nd 8

,3 la

y th

e cl

aim

for

a ne

w in

nova

tion

polic

y pa

radi

gm a

nd p

ropo

se a

shi

ft in

rat

iona

le (

sect

ion

8.2)

and

in th

e br

oad

orie

ntat

ions

(se

ctio

n 8.

3) o

f inn

ovat

ion

polic

y to

addr

essi

ng S

ME

s in

thei

r re

gion

al c

onte

xt. T

hese

arg

umen

ts a

re b

ased

on

the

notio

ns o

f m

arke

t fai

lure

s an

d sy

stem

def

icits

, whi

ch s

how

up

as b

ar-

rier

s to

inno

vatio

n pr

oces

ses

in r

egio

ns a

nd S

ME

s, a

nd o

n w

hat w

e m

ay c

all

gove

rnm

ent f

ailu

res,

sho

wn

by th

e ev

alua

tion

of in

stru

men

ts, U

sing

thes

ear

gum

ents

, sec

tion

8.4

disc

usse

s ho

w th

e SM

EPO

L in

stru

men

ts c

ould

be

impr

oved

, dra

win

g le

sson

s fr

om g

ood

prac

tice.

The

key

mes

sage

of

this

chap

ter

is s

ynth

esiz

ed in

sec

tion

8,5,

whe

re a

sty

lized

vie

w o

n th

e co

nten

tof

a s

ound

reg

iona

l inn

ovat

ion

polic

y fo

r SM

Es

is p

rese

nted

, Sec

tion

8,6

deal

s w

ith th

e qu

estio

n of

how

to b

uild

a c

oher

ent p

ortf

olio

of

polic

yin

stru

men

ts, t

akin

g in

to a

ccou

nt b

oth

regi

onal

situ

atio

ns a

nd s

peci

ficSM

Es'

nee

ds in

term

s of

inno

vatio

n, T

he m

essa

ge d

eliv

ered

is th

at th

ere

isnO

.'one

-siz

e-fit

s-al

l' po

licy

port

folio

. The

con

clud

ing

sect

ion

draw

s th

ele

sson

s fr

om th

e w

hole

exe

rcis

e of

eva

luat

ing,

in a

com

para

tive

fash

ion,

ava

riet

y of

pol

icy

tool

s, w

ithin

a c

omm

on c

once

ptua

l fra

mew

ork,

One

salie

nt e

lem

ent o

f the

con

clus

ion

is th

e ne

ed fo

r m

ore

'pol

icy

inte

llige

nce'

in th

is c

ompl

ex fi

eld,

8.2 THE RATIONALE FOR POLICY

INT

ER

VE

NT

ION

: FA

ILU

RE

S, B

AR

RIE

RS,

AND BOUNDARIES

Whe

ther

we

talk

abo

ut m

arke

ts, s

yste

ms

or g

over

nmen

ts in

rel

atio

n to

inno

vatio

n, it

all

conc

erns

com

mun

icat

ion,

a p

roce

ss o

f ex

chan

ging

info

r-m

atio

n an

d kn

owle

dge.

In o

rder

to b

e us

eful

and

val

uabl

e to

oth

ers

in a

firm

, mar

ket,

syst

em o

r go

vern

men

t adm

inis

trat

ion,

tech

nolo

gica

l (an

dot

he\-

) kn

owle

dge

has

to b

e di

ffus

ed a

nd p

olic

y le

sson

s ha

ve to

be

lear

ned.

196

SME

s, in

nova

tion

and

regi

ons:

des

igni

ng p

olic

ies

The

typi

cal a

nd tr

aditi

onal

app

roac

h to

com

mun

icat

ion

in e

cono

mic

sfo

cuse

s on

mar

kets

whe

re p

rice

med

iate

s su

pply

and

dem

and

whe

reas

, the

'neo

-cla

ssic

al' g

over

nmen

t typ

ical

ly c

omm

unic

ates

pow

er b

ased

on

a hi

¿r-

arch

ical

posi

tion

vis-

à-vi

s th

e ec

onom

ic a

gent

s th

ey g

over

n. I

n ac

cord

ance

with

trad

ition

al m

arke

t-hi

erar

chy

dich

otom

ies,

the

typi

cal a

rgum

ent f

orgo

vern

ent i

nter

vent

ion

is w

hen

mar

kets

fail

in c

omm

unic

atio

n. E

ither

the

mar

ket o

r th

e go

vern

men

t wou

ld p

rovi

de th

e be

st s

olut

ion.

In

gene

ral,

inte

ract

ive

com

mun

icat

ion

is n

ot c

onsi

dere

d to

be

of v

ital i

mpo

rtan

ce in

the

proc

ess

of fi

ding

and

rea

chin

g so

lutio

ns, T

his

linea

r pe

rspe

ctiv

e pr

e-va

iled

even

bef

ore

it ha

d be

en a

pplie

d to

inno

vatio

n,W

hen

ever

ybod

y kn

ows

in a

dvan

ce w

hat (

prod

ucts

, res

ourc

es, t

echn

olo-

gies

, cap

abili

ties

etc.

) ar

e be

ing

talk

ed a

bout

and

eve

rybo

dy w

ould

agr

ee o

nits

(pr

esen

t and

futu

re)

econ

omic

val

ue, t

he m

arke

t is

perf

ectly

abl

e to

com

-m

unic

ate

supp

ly a

nd d

eman

d, In

thes

e si

tuat

ions

ther

e is

no

need

for

inte

r-active communication.

Whe

ther

it is

the

'dem

ande

r' or

the

'sup

plie

r' w

hona

mes

the

pric

e, th

e m

arke

t wil,

in a

line

ar r

espo

nse,

com

e up

with

the

prop

er a

nsw

er. F

or th

e ex

chan

ge o

f cer

tain

goo

ds o

r se

rvic

es, t

he p

rice

may

be th

e on

ly a

spec

t tha

t has

to b

e co

mm

unic

ated

, How

ever

, whe

re k

now

l-ed

ge o

r in

nova

tion

is c

once

rned

, the

pri

ce m

echa

nism

may

not

fun

ctio

nve

ry w

ell,

Follo

win

g th

e sa

me

logi

c fo

r po

licy

deci

sion

-mak

ing,

a c

entr

al q

uest

ion

for

a po

licy-

mak

er is

: how

do

I re

cogn

ize

whe

re a

nd w

hen

mar

kets

fai

l, so

that

I kn

ow w

here

and

whe

n to

inte

rven

e? If

it is

per

fect

ly c

lear

to p

olic

y-m

aker

s w

here

mar

kets

fai

l, an

d it

is w

idel

y ag

reed

upo

n w

hat t

he g

over

ned

regi

on a

dditi

onal

ly 'n

eeds

' and

'has

to o

ffer'

(mor

e sp

ecifi

cally

, wha

t firm

s'n

eed'

fro

m th

eir

regi

on, i

nclu

ding

gov

ernm

ent,

and

wha

t the

y ha

ve to

off

erth

eir

regi

on a

nd it

s po

licy

goal

s), t

hen

ther

e is

no

need

for

inte

ract

ion,

Eve

ryth

ing

is c

lear

: the

re is

no

know

ledg

e le

ft to

be

codi

fied

, the

re is

onl

yin

form

atio

n to

be

pass

ed o

n. S

ince

inte

ract

ion

is c

ostly

in te

rms

of ti

me

and

ener

gy, l

inea

r an

d to

p-do

wn

com

mun

icat

ion

is li

kely

to b

e m

ore

effc

ient

.H

owev

er, t

o de

al w

ith th

e un

cert

aint

ies

atta

ched

to k

now

ledg

e an

d in

no-

vatio

n (D

osi 1

988)

, eco

nom

ic a

nd p

olic

y ag

ents

may

wan

t to

com

mun

icat

em

ore

than

pri

ce o

r au

thor

ity, T

he tr

aditi

onal

con

cept

of

mar

kets

and

(sta

te)

hier

arch

ies

with

thei

r an

onym

ous,

line

ar a

nd f

orm

al c

omm

unic

a-tio

n, f

ails

to in

corp

orat

e th

ese

broa

der

info

rmat

ion

need

s. A

rea

son

why

mar

kets

as

co-o

rdin

atio

n an

d co

mm

unic

atio

n m

echa

nism

s m

ay n

ot f

unc-

tion

very

wel

l reg

ardi

ng in

nova

tion

is r

elat

ed to

the

unce

rtai

ntie

s at

tach

edto

pre

dict

ing

the

futu

re (

Cow

an a

nd F

oray

199

7), T

he m

arke

t may

fail

topredict the economic value of new technologies, new products, new

reso

urce

s, n

ew fi

ms

or n

ew e

ntre

pren

euria

l cap

abili

ties.

Typ

ical

ly, t

hem

arke

t wil,

for

inst

ance

, not

be

able

to v

alue

a s

tart

-up

firm

, Alth

ough

polic

y-m

aker

s al

so h

ave

diff

culti

es in

pre

dict

ing

the

futu

re, t

his

kind

of

"'~ì

'':"

.' r' " i

Tow

ards

a n

ew p

arad

igm

for

inno

vatio

n po

licy?

197

market failure is a widely accepted

just

ific

atio

n fo

r pu

blic

inte

rven

tion,

For

exam

ple,

a g

ener

ic n

atio

nal p

olic

y to

ol, l

ike

a ta

x-re

duct

ion

sche

me,

see

ms

rele

vant

to 'p

rote

ct' t

hese

you

ng, n

ew e

ntre

pren

euri

al e

xper

imen

ts, p

rovi

d-in

g th

em a

cha

nce

to p

rove

them

selv

es a

nd to

con

vinc

e th

e m

arke

t (th

at is

,cu

stom

ers,

but

als

o fi

nanc

ial a

nd la

bour

mar

kets

) of

thei

r po

tent

ial a

nd,

mor

eove

r, to

con

vinc

e th

e go

vern

men

t of

thei

r po

tent

ial c

ontr

ibut

ion

to th

ere

gion

and

its

polic

y go

als,

The

sam

e ar

gum

ents

may

hol

d fo

r ne

w s

ecto

rsor

tech

nolo

gies

or

a yo

ung

regi

onal

clu

ster

of

firm

s, o

r ev

en o

lder

non

-in

nova

tive

firm

s th

at w

ant t

o an

d ar

e tr

ying

to b

ecom

e in

nova

tive.

Oth

er p

lace

s w

here

the

mar

ket o

bvio

usly

fails

is in

com

mun

icat

ing

cert

ain

envi

ronm

enta

l and

soc

ial c

osts

and

ben

efits

, If

econ

omic

age

nts

dono

t tak

e th

ese

kind

s of

'cos

ts' i

nto

acco

unt,

gove

rnm

ents

may

wan

t to

inte

r-ve

ne a

nd e

xten

d th

e bo

unda

ries

of

the

ratio

nalit

y of

the

agen

ts th

ey g

over

n,e.

g, b

y in

flue

ncin

g th

eir

cost

-ben

efit

calc

ulat

ions

with

env

iron

men

tal t

axes

.T

he ju

stif

icat

ion

for

trad

ition

al te

chno

logy

or

R&

D p

olic

y ha

s be

en p

utfo

rth

by A

rrow

, and

is b

ased

on

the

mac

ro-l

evel

arg

umen

t tha

t whe

n so

cial

effe

cts

are

take

n in

to a

ccou

nt, t

here

is u

nder

-inv

estm

ent i

n R

&D

, The

ris

kan

d un

cert

aint

y at

tach

ed to

R&

D b

y pr

ivat

e ac

tors

cal

ls fo

r pu

blic

inte

r-ve

ntio

n be

caus

e, a

t the

mac

ro-l

evel

, it i

s co

nsid

ered

wor

thw

hile

to p

ublic

lyta

ke th

e ri

sk f

or th

e sa

ke o

f so

ciet

y, e

.g. b

y fi

nanc

ing

publ

ic R

&D

in u

ni-

vers

ities

or,

aga

in, b

y in

flue

ncin

g pr

ivat

e, m

icrò

-lev

el c

ost-

bene

fit c

alcu

la-

tions

with

tax

dedu

ctio

ns o

r su

bsid

ized

faci

litie

s,T

he id

ea th

at th

ere

is a

rol

e fo

r po

licy-

mak

ers,

if m

arke

ts fa

il, d

oes

not

impl

y th

at p

olic

y-m

aker

s ar

e pe

rfec

t, bu

t tha

t the

abo

ve-m

entio

ned

gene

ral

or s

truc

tura

l mar

ket f

ailu

res

may

ver

y w

ell b

e ef

fect

ivel

y an

d ef

fcie

ntly

addr

esse

d by

gen

eric

pol

icy

inst

rum

ents

, des

igne

d an

d de

liver

ed a

t the

natio

nal p

olic

y le

veL.

Fur

ther

, to

diffu

se in

form

atio

n on

nee

ds a

nd s

uppo

rt,

linea

r co

mm

unic

atio

n se

ems

appr

opri

ate,

How

ever

, kno

wle

dge

diff

ers

from

info

rmat

ion,

For

inst

ance

, dis

tanc

e do

es n

ot s

eem

to b

e a

barr

ier

to th

etr

ansm

issi

on o

f in

form

atio

n, b

ut in

the

tran

smis

sion

of

know

ledg

e it

does

,T

he im

port

ance

of t

he ta

cit d

imen

sion

(P

olan

yi 1

996)

, the

info

rmal

,un

codi

fied

and

dis

embo

died

asp

ects

of

the

know

ledg

e co

ncer

ned,

bot

h at

the regional

leve

l and

for

SM

Es,

und

ersc

ores

the

loca

lized

nat

ure

of k

now

l-edge spil

over

s (S

torp

er 1

997)

, The

line

ar c

omm

unic

atio

n ar

gum

ents

usi

ngth

e ol

d m

arke

t-hi

erar

chy

appr

oach

es f

ail t

o ad

dres

s th

is, P

roxi

mity

mat

ters

to knowledge spil

over

s an

d in

tera

ctio

n be

twee

n re

gion

al a

gent

s (b

oth

priv

ate

and

publ

ic)

mat

ters

in d

ealin

g w

ith th

e un

cert

aint

ies

atta

ched

toin

nova

tion

proc

esse

s in

reg

ions

and

SM

Es,

The

var

iety

of

situ

atio

nsre

gard

ing

inno

vatio

n, S

ME

s an

d re

gion

s ca

ll fo

r co

mm

unic

ativ

e in

tera

c-tio

n (N

auw

elae

rs a

nd M

orga

n 19

99),

Loc

al d

iscu

ssio

ns, p

riva

te a

ndpu

blic

-pri

vate

one

s, c

an s

hed

mor

e lig

ht o

n th

e un

cert

aint

y is

sues

,E

xcha

ngin

g ta

cit v

isio

ns, c

onve

rgin

g id

eas

and

co-o

rdin

atin

g in

vest

men

t

deci

sion

s (p

ublic

, pri

vate

and

pub

lic-p

riva

te o

nes)

may

pro

vide

the

know

l-ed

ge b

ase

for

an in

nova

tion

stra

tegy

con

cern

ing

SME

s an

d th

eir

regi

ons

(Lun

dval

lI99

6),

Esp

ecia

lly c

once

rnin

g in

nova

tion

proc

esse

s in

reg

ions

and

SM

Es,

the

conc

ept o

f sy

stem

s (o

r ne

twor

ks o

r cl

uste

rs)

seem

s a

mor

e re

alis

tic m

odel

to f

ollo

w th

an th

e tr

aditi

onal

con

cept

s of

mar

kets

and

hie

rarc

hies

(G

rabh

er19

93a)

, A r

egio

nal i

nnov

atio

n sy

stem

s ap

proa

ch s

tres

ses

the

impo

rtan

ce o

fth

e di

ffus

ion

of k

now

ledg

e an

d in

tera

ctiv

e le

arni

ng w

ithin

the

regi

on a

s a

syst

em (

Mor

gan

1997

). T

he n

on-a

nony

mou

s re

latio

ns, t

he c

ompl

emen

tar-

ity o

f ac

tiviti

es, a

nd th

e hi

stor

ical

set

ting

are

stre

ssed

in s

peci

fyin

g th

ere

gion

al c

onte

xt a

nd th

e pr

ofile

of

the

regi

on's

SM

Es.

The

se g

ive

the

regi

onal

sys

tem

its

iden

tity,

so

to s

peak

(Fe

ldm

an 1

994)

, Fur

ther

, in

orde

rto

fin

d ou

t and

art

icul

ate

wha

t a p

artic

ular

reg

ion

or f

irm

nee

ds, o

r w

hat i

sla

ckin

g co

ncer

ning

inno

vatio

n, r

egio

nal p

roxi

mity

and

com

mun

icat

ive

inte

ract

ion

are

appr

opri

ate

to a

ddre

ss th

e ta

cit a

nd la

tent

asp

ects

of

such

need

s (L

anda

baso

199

7), P

rovi

ding

R&

D ta

x re

duct

ion

or s

ubsi

dies

may

not b

e en

ough

to c

hang

e th

e ra

tiona

lity

(nor

its

boun

darie

s) o

f SM

Es

rega

rdin

g in

nova

tion

proc

esse

s, T

hose

arg

umen

ts u

nder

pin

the

grow

ing

impo

rtan

ce ta

ken

by c

lust

er p

olic

ies,

as

the

conc

ept s

eem

s to

fit

quite

wel

lth

e pr

escr

iptio

ns o

f an

inte

ract

ive

view

on

inno

vatio

n (N

auw

elae

rs 2

001)

,

8.3 LESSONS FROM EVALUATING 40 INNOVATION

POL

ICY

TO

OL

S IN

11

EU

RO

PEA

N R

EG

ION

S

Hav

ing

disc

usse

d th

e ra

tiona

le f

or p

olic

y in

terv

entio

n in

inno

vatio

n, th

isse

ctio

n de

als

with

the

cont

ent o

f su

ch p

olic

ies,

pro

posi

ng g

ener

al p

rinc

iple

sfo

r th

eir

desi

gn a

nd im

plem

enta

tion

(sec

tion

8,3,

1) a

nd o

bser

ving

how

thes

epr

inci

ples

com

pare

with

pra

ctic

e in

the

case

-stu

dy r

egio

ns (

sect

ion

8.3,

2),

8,3,1 Basic Principles for Innovation Policies

Bui

ldin

g on

the

conc

eptu

al a

nd e

mpi

rica

l fin

ding

s of

the

SME

POL

pro

ject

,th

is a

naly

sis

puts

for

th th

e fo

llow

ing

prop

ositi

on: s

ince

the

mai

n di

stin

-gu

ishi

ng f

eatu

res

of th

e m

ajor

ity o

f SM

Es,

with

reg

ard

to th

e in

nova

tion

proc

ess,

are

that

they

hav

e a

limite

d re

sour

ce b

ase,

they

nee

d ex

tern

al o

rien

-ta

tion

to u

nder

stan

d an

d (p

ro-a

ctiv

ely)

ada

pt to

thei

r en

viro

nmen

t, an

dth

ey e

ngag

e in

inno

vatio

n in

an

info

rmal

mod

e, th

eref

ore

the

mai

n ro

le f

orin

nova

tion

polic

y, w

hich

aim

s to

incr

ease

the

capa

city

of

a re

gion

and

the

capa

bilit

ies

of it

s SM

Es

to in

nova

te, i

s to

fos

ter

inte

ract

ive

lear

ning

with

inth

e fi

rms

and

with

in th

e re

gion

. Thi

s ca

lls f

or a

n in

tera

ctiv

e m

ode

of p

olic

yin

terv

entio

n.

i

"l."

,,~.-

.,,,.-

-:¡

;

Of

cour

se, t

his

stat

emen

t sta

nds

as q

uite

a b

old

gene

raliz

atio

n of

bot

hSM

Es'

cha

ract

eris

tics

and

polic

y ch

alle

nge,

Som

e SM

Es

have

qui

te a

nad

vanc

ed k

now

ledg

e ba

se (

e,g,

new

tech

nolo

gy-b

ased

fir

ms)

, oth

ers

have

deve

lope

d ex

celle

nt in

nova

tion

man

agem

ent c

apab

ilitie

s an

d ex

plic

it in

no-

vatio

n st

rate

gies

, and

som

e fi

rms

in n

iche

s re

ally

sha

pe th

eir

busi

ness

env

i-ro

nmen

t rat

her

than

bei

ng d

epen

dent

on

it. A

lso,

ther

e ar

e pr

oble

ms

ofan

othe

r na

ture

whi

ch k

eep

SME

s fr

om in

nova

ting,

suc

h as

the

need

for

ris

kfin

anci

nglO

or

the

nece

ssity

to a

cces

s st

ate-

of-t

he-a

rt te

chno

logy

, How

ever

,

.the

mea

ning

of

this

pro

posa

l is

to p

oint

to n

ew o

rien

tatio

ns o

f po

licie

s to

addr

ess

the

key

need

s of

the

maj

ority

of

SME

s in

mos

t reg

ions

, whi

ch a

renot properly taken into account in traditional policy approaches, This does

not imply that linear approaches and tools are not relevant any more, but

rath

er, i

t put

s th

e la

tter

in p

ersp

ectiv

e, I

t mea

ns th

at p

rovi

ding

res

ourc

es to

inno

vate

(fi

nanc

e, te

chno

logy

) is

not

suf

fcie

nt if

the

firm

s do

not

pos

sess

the

man

ager

ial a

nd o

rgan

izat

iona

l abi

litie

s to

dea

l with

the

inno

vativ

e pr

oces

s(C

obbe

nhag

en 1

999)

, The

vie

w o

f an

'aut

omat

ic' f

low

of

tech

nolo

gica

lresources through the firm, or from the R&D sector into the fi, is argued

against here, while increased attention is given to the innovation process

(with

in a

nd a

roun

d th

e fi

rm)

itsel

f, in

a b

road

er s

ense

(N

auw

elae

rs 2

000)

,N

ever

thel

ess,

fos

teri

ng in

tera

ctiv

e le

arni

ng, a

s a

polic

y go

al, s

houl

d no

tbe

rea

d in

a d

ogm

atic

ega

litar

ian

sens

e, li

miti

ng th

e vi

ew to

the

deve

lopm

ent

of 'T

hird

-Ita

ly' t

ype

of h

oriz

onta

l net

wor

king

and

rel

atio

nshi

ps a

s an

idea

lw

ay to

fos

ter

that

pro

cess

, Hie

rarc

hica

l rel

atio

nshi

ps m

ight

be

very

rel

evan

tw

ays

to a

chie

ve s

uch

an o

bjec

tive

too,

dep

endi

ng o

n th

e en

viro

nmen

t. A

sde

velo

ped

in s

ectio

n 8,

2, th

e ro

le o

f ge

ogra

phic

al p

roxi

mity

mig

ht b

e im

por-

tant to nurture learning relationships, but it is not a necessary ingredient

ever

ywhe

re. T

he p

oint

her

e is

that

bei

ng o

pen

to o

utsi

de s

ourc

es o

f kn

owl-

edge

, and

hav

ing

the

capa

city

to in

tegr

ate

thes

e w

ith in

tern

al k

now

ledg

e in

the firm in a continuous mode, is key to the innovation process, Such an

obje

ctiv

e ha

s im

plic

atio

ns b

oth

on th

e su

pply

sid

e (o

utsi

de r

esou

rces

sho

uld

exis

t, be

org

aniz

ed a

nd a

cces

sibl

e to

fir

ms)

and

on

the

dem

and

side

(th

efir

m's

abs

orpt

ion

capa

city

and

its

wili

ngne

ss to

ent

erta

in li

nks

with

the

outs

ide

shou

ld b

e en

hanc

ed),

Dev

elop

ing

stra

tegi

c ca

pabi

litie

s, a

t the

firm

,or

gani

zatio

n an

d po

licy

leve

ls, l

ies

at th

e he

art o

f th

is c

halle

nge,

The

idea

of

an in

tera

ctiv

e m

ode

of p

olic

y im

plem

enta

tion

mea

ns n

oton

ly th

at s

ervi

ces

shou

ld b

e bo

th d

esig

ned

and

deliv

ered

in c

o-op

erat

ion

with

the

bene

fici

arie

s, b

ut a

lso

that

the

polic

y im

plem

ente

rs c

an b

e pa

rtne

rsin

the

supp

orte

d ac

tion

or p

roje

ct, s

o th

at le

arni

ng c

an h

appe

n bo

th w

ays

- be

twee

n po

licy

impl

emen

ters

and

firm

s, th

at is

wha

t we

calle

d 'c

omm

uni-

cativ

e in

tera

ctio

n' in

sec

tion

8.2

abov

e. In

this

app

roac

h, th

e ta

cit n

atur

e of

inno

vatio

n in

SM

Es

is b

ette

r ad

dres

sed

than

in m

ore

hier

arch

ical

pol

icy

mod

es.

200

SME

s, in

nova

tion

and

regi

ons:

des

igni

ng p

olic

ies

8,3,2 Application of the Basic Principles

With

the

abov

e pr

opos

al a

s a

theo

retic

al c

halle

nge

for

polic

y, h

ow d

oes

itco

mpa

re w

ith p

ract

ice,

as

expe

rien

ced

in th

e re

gion

s co

vere

d by

the

SME

POL

stu

dy?

The

hor

izon

tal o

verv

iew

and

com

pari

son

of th

e an

alys

esof

40

polic

y to

ols

in 1

1 E

urop

ean

regi

ons

show

s th

at s

uch

a ch

alle

nge

isha

rdly

met

by

the

actu

al p

olic

ies.

Bot

h th

e co

nten

t and

the

mod

es o

f del

iv-

ery

of p

olic

ies

are

in m

ost c

ases

not

inte

ract

ive

and

fit b

ette

r w

ith a

mar

ket-

hier

arch

y th

an a

sys

tem

app

roac

h, M

ore

prec

isel

y, th

e SM

EPO

L a

naly

ses

deliv

er th

e fo

llow

ing

pict

ure:

1. T

he g

ener

al s

ituat

ion

is th

at li

near

tool

s ar

e do

min

atin

g th

e po

licy

scen

e, b

ut th

at e

very

whe

re a

n ev

olut

ion

tow

ards

mor

e in

tera

ctiv

esu

ppor

t is

visi

ble,

The

follo

win

g qu

otes

from

the

natio

nal s

tudi

es il

us-

trat

e th

is p

oint

,

In B

elgi

um: '

One

can

ana

lyse

the

actu

al s

tate

of

the

emer

ging

Wal

loon

inno

-va

tion

polic

y as

fol

low

s: th

is p

olic

y is

in f

act f

ound

ed o

n tw

o di

ffer

ent p

ar-

adigms - broadly-speaking the linear and the interactive views

onin

nova

tion

- th

e fo

rmer

bei

ng e

mbo

died

in th

e "m

ains

trea

m"

polic

y w

hile

the

latte

r is

tran

slat

ed in

the

"fri

nge"

, an

unar

ticul

ated

and

rat

her

fuzz

y se

tof

initi

ativ

es, t

rial

-and

-err

ors

effo

rts,

insp

ired

by

the

"loc

aliz

ed e

xter

nal-

ities

" ap

proa

ch a

nd m

uch

less

line

ar in

sco

pe' (

Nau

wel

aers

et a

l. 19

99),

In A

ustr

ia: '

The

Aus

tria

n in

nova

tion

supp

ort s

yste

m is

dom

inat

ed b

y a

few

fun

ding

org

aniz

atio

ns, m

ainl

y of

feri

ng d

irec

t sup

port

like

gra

nts

and

loan

s w

ithin

the

fram

ewor

k of

sev

eral

pro

gram

mes

, Ins

titut

ions

and

pro

-gr

amm

es a

re o

rgan

ized

alo

ng th

e lin

ear

inno

vatio

n m

odeL

. (H

owev

er)

The

rear

e se

riou

s do

ubts

abo

ut th

e ef

fcie

ncy

of tr

aditi

onal

dir

ect s

uppo

rt f

orR

&D

and

inno

vatio

n' (

Kau

fman

n an

d T

ödtli

ng 1

999)

.H

owev

er in

the

Net

herla

nds:

'The

"in

tera

ctiv

e" c

onte

nt o

f Lim

burg

'sin

nova

tion

polic

y is

larg

ely

due

to th

e R

TP

Lim

burg

initi

ativ

e, T

he R

TP

fram

ewor

k an

d th

e w

ay L

imbu

rg h

as im

plem

ente

d it

has

led

to a

n ex

tens

ion

of th

e "i

nter

activ

e" p

olic

y, "

Inte

ract

ive"

inst

rum

ents

are

not

"de

liver

ed"

onpa

per

at th

e fr

ont d

oor,

but

are

mai

nly

impl

emen

ted

in p

erso

nal c

omm

uni-

cative interaction with the actors involved. The regional intermediates

Syn

tens

and

LlO

F p

laya

vita

l rol

e in

the

impl

emen

tatio

n of

Lim

burg

's"i

nter

activ

e" p

olic

y' (

Nau

wel

aers

et a

l. 19

99),

2. A set of policy instruments, in general, does not form a system: lack of

co-o

rdin

atio

n an

d of

syn

ergi

es a

mon

g to

ols,

or

'lack

of

exte

rnal

coh

er-

ence

' in

the

wor

ds o

f C

hapt

er 7

, is

the

rule

.

In I

taly

: 'It

see

ms

that

ther

e is

a lo

t of

over

lapp

ing

in m

issi

ons

of d

iffe

rent

inst

itutio

ns w

orki

ng w

ithin

the

Apu

lia r

egio

n, w

ith a

lack

of

capa

bilit

y of

co-o

rdin

atio

n fo

r w

hat c

once

rns

the

Apu

lia R

egio

n in

stitu

tion'

(G

arof

o1i

1999

a),

ê'i j

Tow

ards

a n

ew p

arad

igm

for

inno

vatio

n po

licy?

201

In D

enm

ark:

'Non

e of

the

acto

rs h

ave

mad

e st

rate

gy-

and

actio

n-or

ient

edlin

ks b

etw

een

the

fort

hcom

ing

know

ledg

e-ba

sed

econ

omy

and

the

atte

mpt

to f

orm

ulat

e a

cohe

rent

lear

ning

and

inno

vatio

n pr

ogra

mm

e, M

ost i

nitia

tives

are

of a

sin

gle

prog

ram

me

natu

re. A

stim

ulat

ing

stra

tegy

tryi

ng to

inte

grat

ean

d co

-ord

inat

e th

e di

vers

e in

nova

tion

sche

mes

is la

ckin

g' (

Chr

iste

nsen

et a

l.19

99).

3, F

ew p

olic

y in

stru

men

ts a

re d

esig

ned

and

impl

emen

ted

in a

n us

er-o

ri-en

ted

mod

e, ta

king

bot

h ex

pres

sed

and

late

nt n

eeds

of

user

s in

toac

coun

t: th

e m

ajor

ity o

f to

ols

are

deve

lope

d in

a r

eact

ive,

top-

dow

nfa

shio

n an

d at

bes

t con

side

r fir

ms'

nee

ds e

xpre

ssed

(bu

t not

late

nt),

How

ever

, in

case

s w

here

'voi

ce' o

f us

ers

(i,e

, fir

ms'

exp

ress

ed, o

r ev

enla

tent

, nee

ds)

is ta

ken

into

acc

ount

, the

tool

s be

com

e m

uch

mor

e us

er-

orie

nted

.

In I

taly

: 'T

ecno

polis

rep

rese

nts

a ty

pica

l mod

el o

f te

chno

logi

cal p

ark

base

don

sup

ply

side

, sta

rtin

g fr

om th

e ex

iste

nce

(and

red

unda

ncy)

of c

ompe

tenc

es(.

. ,)

, alw

ays

post

poni

ng th

e m

omen

t of

mon

itori

ng th

e po

tent

ial n

eeds

of

loca

l (or

ext

erna

l) f

irm

s to

fac

ilita

te in

tera

ctio

n be

twee

n re

sear

ch c

entr

e an

dec

onom

ic a

ctiv

ities

' (G

arof

oli 1

999)

,H

owev

er in

Spa

in: '

Loca

l ent

repr

eneu

rs b

elon

g to

the

"Con

sejo

Rec

tor"

, the

gov

erni

ng b

ody

of th

e T

echn

olog

ical

Ins

titut

es, s

o th

at th

eypa

rtic

ipat

e in

the

desi

gn o

f act

iviti

es a

nd p

olic

ies

(. .

.) T

he In

stitu

tes'

stro

ng p

oint

s ar

e th

eir

near

ness

to f

irm

s, th

eir

conn

ectio

ns to

oth

er in

ter-

natio

nal c

ente

rs o

f thi

s ty

pe a

nd th

e kn

owle

dge

tran

sfer

red

to th

e fir

ms

thro

ugh

them

(. .

,) T

he T

echn

olog

ical

Ins

titut

es s

how

a h

igh

degr

ee o

feffectiveness in adapting to innovation support needs as expressed

by th

een

trep

rene

urs

of th

e S

ME

s in

the

four

sec

tors

stu

died

' (V

ázq

uez-

Bar

quer

oet

al.

1999

).

4, P

olic

y le

arni

ng is

stil

rar

e an

d un

derd

evel

oped

(N

auw

elae

rs 1

997)

, If

it oc

curs

at t

he le

vel o

f or

gani

zatio

ns, i

t tak

es p

lace

in a

n oc

casi

onal

,not routinized way, Intense policy-learning practices may, however,

resu

lt in

und

esir

able

vol

atili

ty in

the

polic

y sy

stem

. At t

he o

ther

extr

eme,

it s

eem

s un

just

ifie

d to

mai

ntai

n a

rang

e of

tool

s th

at a

re v

ir-

tual

ly n

ot u

sed

by f

irm

s. T

he c

halle

nge

lies

in f

ine-

tuni

ng th

e po

licy

tool

s w

ithou

t let

ting

firm

s su

ffer

fro

m th

e in

stab

ility

of

the

syst

em.

Thi

s tr

ade-

off

betw

een

resp

onsi

vene

ss a

nd o

rgan

izat

iona

l coh

eren

ceha

s be

en d

iscu

ssed

at l

engt

h in

Cha

pter

7,

In A

ustr

ia: '

Mos

t sup

port

inst

rum

ents

are

not

eva

luat

ed s

yste

mat

ical

ly. O

fco

urse

, the

re is

an

ongo

ing

lear

ning

pro

cess

in th

e in

stitu

tions

abo

ut th

eef

fect

s of

sup

port

act

iviti

es, a

bout

pro

blem

s an

d ne

eds

of f

irm

s re

gard

ing

thei

r in

nova

tion

proc

esse

s. B

ut it

is b

ased

on

pers

onal

exp

erie

nce

and

info

r-m

atio

n ex

chan

ge, t

he le

arni

ng p

roce

ss is

not

inst

itutio

naliz

ed o

r ro

utin

ely

orga

nize

d' (

Kau

fman

n an

d T

ödtli

ng 1

999)

,

How

ever

in th

e N

ethe

rlan

ds: '

Nat

iona

l pol

icy-

mak

ers

have

lear

ned

from

seve

ral r

egio

nal i

nnov

atio

n po

licy

initi

ativ

es a

nd in

tegr

ated

them

into

the

natio

nal i

nnov

atio

n po

licy,

The

ana

lyse

d K

IM -

and

KIC

- s

chem

es a

rego

od e

xam

ples

fro

m L

imbu

rg o

f th

is b

otto

m-u

p po

licy

lear

ning

pro

cess

'(N

auw

elae

rs e

t al.

1999

),H

owev

er in

Nor

way

: 'Po

licy

lear

ning

take

s pl

ace

from

eva

luat

ions

in th

esu

ppor

t sys

tem

, Thu

s, T

EFT

and

NT

hav

e be

en c

hang

ed d

urin

g th

eir

"lif

e",

part

ly a

s a

resp

onse

to k

now

ledg

e ac

quir

ed th

roug

h ev

alua

tions

. TE

FT a

lso

carr

ied

out m

onito

ring

res

earc

h, w

hich

is im

plem

ente

d in

the

new

RE

GIN

Npr

ogra

mm

e to

o, R

US

H, b

eing

an

expe

rimen

tal p

rogr

amm

e, in

par

ticul

ar,

wou

ld n

eed

proc

edur

es fo

r sy

stem

atic

eva

luat

ions

and

lear

ning

, how

ever

lack

ing

in th

is c

ase'

(Is

akse

n et

al.

1999

cha

pter

4),

5. T

here

is a

n em

ergi

ng n

ew te

nden

cy o

f dev

elop

ing

'ove

rall

sche

mes

',ga

ther

ing

into

a s

ingl

e pr

ogra

mm

e, in

stru

men

t, or

org

aniz

atio

n a

set o

fto

ols

that

trad

ition

ally

are

pro

pose

d se

para

tely

to c

ompa

nies

, Thi

sap

proa

ch is

pro

mis

ing

in th

at it

fits

wel

l with

the

glob

al p

erce

ptio

n of

inno

vatio

n w

ithin

fir

ms:

it im

ping

es o

n al

l act

iviti

es o

f th

e fi

rm,

In th

e N

ethe

rlan

ds: '

The

18

Synt

ens

orga

niza

tions

are

the

mos

t im

port

ant

inte

rmed

iary

org

aniz

atio

ns in

the

Net

herl

ands

(an

d th

us L

imbu

rg)

for

inno

vatio

n' p

olic

y ad

dres

sed

at S

ME

s. T

he r

ole

of th

e IC

s gr

adua

llych

ange

d fr

om b

ring

ing

tech

nolo

gy to

reg

iona

l SM

Es

(tec

hnol

ogy

push

) to

an in

term

edia

te r

ole

of "

brok

er",

and

mor

e re

cent

ly it

ful

fils

the

role

of

"org

aniz

er, a

nim

ator

or

coac

h". T

he "

new

" or

gani

zatio

ns a

re m

ore

able

tode

liver

"al

l-ro

und"

ser

vice

and

sup

port

to S

ME

s an

d th

ey g

o by

the

new

nam

e of

"Sy

nten

s: a

n in

nova

tion

netw

ork

for

entr

epre

neur

s'"

(Nau

wel

aers

et al. 1999),

Exa

mpl

e fr

om N

orw

ay: '

NT

pro

vide

s al

so a

mor

e al

l-ro

und

supp

ort f

orin

nova

tion

than

the

othe

r pr

ogra

mm

es th

at c

once

ntra

te o

n a

sing

le c

ompo

-ne

nt in

the

inno

vatio

n sy

stem

. . .

NT

focu

ses

on fi

rm's

inno

vatio

n pr

ojec

ts,

and

tailo

r-m

ade

supp

ort t

o fi

rms'

spe

cifi

c ne

eds,

bot

h te

chno

logi

cal a

ndno

n-te

chno

logi

cal s

uppo

rt' (

Isak

sen

et a

l. 19

99 c

hapt

er 4

)

6. T

he m

ajor

ity o

f in

stru

men

ts a

im a

t im

prov

ing

or f

acili

tatin

g ex

istin

gin

nova

tion

proj

ects

, rat

her

than

indu

cing

new

inno

vatio

n pr

actic

es,

Prov

idin

g gr

ants

for

R&

D, f

or e

xam

ple,

see

ms

to in

duce

a r

athe

rsm

all i

ncre

men

tal b

ehav

iour

al e

ffec

t (in

term

s of

cha

ngin

g st

rate

gy,

man

agem

ent o

r cu

lture

reg

ardi

ng in

nova

tion,

co-

oper

atio

n an

d in

ter-

activ

e le

arni

ng).

The

refo

re, t

he v

alue

-add

ed o

f su

ch p

olic

y in

stru

-m

ents

, see

n fr

om a

reg

iona

l per

spec

tive,

is q

uest

iona

ble.

It fo

llow

sfr

om th

is th

at th

e qu

estio

n of

pen

etra

tion

rate

of t

he to

ols

in th

e bu

si-

ness

sec

tor

is n

ot a

lway

s ad

dres

sed

in p

olic

y se

tting

s, F

or e

xam

ple,

whe

re a

'pic

king

-the

-win

ner'

appr

oach

is ta

ken,

a f

ocus

on

the

visi

bil-

ity o

f re

sults

may

act

to th

e de

trim

ent o

f th

e va

lue-

adde

d of

the

sche

me.

..1

In th

e U

K: '

The

re is

a m

ism

atch

bet

wee

n th

e ch

arac

teri

stic

s of

ent

repr

en-

eurs

and

SM

Es

in th

e L

ee V

alle

y ar

ea, .

, an

d th

e el

igib

ility

cri

teri

a fo

r th

e(S

MA

RT

) sc

hem

e. I

ts c

ompe

titiv

e na

ture

, usi

ng n

atio

nal a

sses

smen

t cri

te-

ria, w

hich

are

wei

ghte

d to

war

ds n

ew to

the

indu

stry

inno

vatio

ns, h

as m

eant

that

rel

ativ

ely

few

pro

ject

s fr

om w

ithin

the

Lee

Val

ley

have

qua

lifie

d, A

s a

resu

lt, th

e SM

AR

T s

chem

e is

not

mak

ing

muc

h co

ntri

butio

n to

rai

sing

the

leve

l of

inno

vatio

n in

SM

Es

in th

is a

rea'

(Sm

allb

one

et a

l. 19

99),

In A

ustr

ia: '

In g

ener

al, f

inan

cial

sup

port

see

ms

to b

e ac

tual

ly "

over

-ef

fect

ive"

(, ,

,) T

his

is e

spec

ially

obv

ious

in th

e ca

se o

f the

mor

e in

nova

tive

SME

s, T

his

rais

es th

e qu

estio

n if

ther

e is

a s

igni

fica

nt s

hare

of

the

appl

ied

fund

s lo

st to

fir

ms

and

proj

ects

, whi

ch d

o no

t rea

lly n

eed

them

, but

take

them

alo

ng a

s a

wel

com

e ad

ditio

nal s

ourc

e of

fun

ding

. A s

peci

al p

robl

emof

the

dire

ct s

uppo

rt p

rogr

amm

es s

eem

s to

be

the

emer

genc

e of

long

-ter

mst

able

rel

atio

ns to

a s

peci

al c

lient

ele

cons

istin

g of

wel

l-kno

wn

inno

vativ

efi

rms'

(K

aufm

ann

and

Töd

tling

199

9),

7, Very often, tools designed at regional

leve

l wor

k un

der

a cl

osed

vis

ion

of th

e re

leva

nt s

ourc

es o

f kn

owle

dge

usef

ul f

or f

irm

s, a

s th

e bo

unda

r-ie

s of

the

syst

em a

re d

efin

ed in

adm

inis

trat

ive

term

s, I

f to

ols

wou

ld b

em

ore

user

-orie

nted

, the

re is

no

need

for

such

a r

estr

icte

d vi

ew,

In B

elgi

um: '

Mos

t of

the

"fri

nge"

initi

ativ

es w

ork

unde

r ir

rele

vant

geo

-graphical limits,.

of a

n ad

min

istr

ativ

e na

ture

, and

impo

sed

by th

e so

urce

s of

publ

ic f

undi

ng: p

rovi

ncia

l lim

its, O

bjec

tive

1 or

2 z

ones

, (. .

.) w

hich

do

not

necessarily correspond with the natural areas of actions of the targeted

firm

s' (

Nau

wel

aers

et a

l. 19

99),

In D

enm

ark:

'The

nat

iona

l/int

erna

tiona

l clie

nt is

sue

tend

s to

ove

r-sh

adow

the

issu

e of

a r

egio

naliz

ed te

chno

logi

cal s

ervi

ce s

yste

m, M

ost

resp

onde

nts

appr

oach

ed te

nd to

dis

rega

rd th

e re

gion

al is

sue

as a

rel

evan

tis

sue

with

the

argu

men

t tha

t the

ser

vice

uni

ts w

il be

too

smal

l, If

eve

ryre

gion

is g

oing

to h

ave

a se

rvic

e ce

ntre

, the

n th

e G

TS

syst

em w

il lo

se e

con-

omie

s of

sca

le a

s w

ell a

s of

sco

pe' (

Chr

iste

nsen

et a

l. 19

99).

8. Overall, there is an uneven degree of policy concern, among the five

follo

win

g in

nova

tion-

supp

ort n

eeds

rep

orte

d by

SM

Es:

. Finance/risk sharing

. Technology/technical know-how

. Qualifications/personnel

. Market access/information

. Tim

e co

nstr

aint

s/O

rgan

izat

ion/

Str

ateg

ic c

apab

ilitie

s,

The

lack

of

'mar

ket o

rien

tatio

n' o

f th

e po

licy

tool

s, o

r th

eirl

ack

of f

ocus

on .t

he c

omm

erci

aliz

atio

n as

pect

s of

inno

vatio

n, a

re p

artic

ular

ly e

vide

nt,

In B

elgi

um: '

The

re is

a n

eed

to r

einf

orce

furt

her

the

hum

an s

kils

com

po-

nent of innovation. The take-up of existing human resources schemes is

204

SME

s, in

nova

tion

and

regi

ons:

des

igni

ng p

olic

ies

quan

titat

ivel

y lim

ited,

so

ther

e is

a n

eed

to a

lso

upgr

ade

exte

rnal

isat

ion

capa

citie

s of

fir

ms

to o

ther

sou

rces

than

uni

vers

ities

or

know

ledg

e so

urce

inst

itutio

ns, t

o fa

vour

bet

ter

com

mer

cial

cap

aciti

es w

ithin

the

firm

, and

tosu

ppor

t str

ateg

ic c

apac

ities

for

SM

E m

anag

ers

on a

wid

er s

cale

, int

rodu

c-in

g m

ore

inno

vatio

n m

anag

emen

t too

ls a

nd c

reat

ive

thin

king

in S

ME

s(N

auw

elae

rs e

t al.

1999

).H

owev

er in

the

UK

: 'T

he e

mph

asis

of

BIC

s is

on

the

com

mer

cial

isat

ion

ofin

nova

tive

idea

s. In

this

res

pect

, BI C

s ai

m to

pro

vide

a c

ompr

ehen

sive

pac

kage

of s

uppo

rt f

or in

nova

tive

new

ven

ture

s an

d ex

istin

g pr

ojec

ts. I

n em

phas

isin

gth

e co

mm

erci

al a

pplic

atio

n of

inno

vatio

n, B

ICs

also

aim

to a

ddre

ss th

e w

eak-

ness

whi

ch h

as b

een

cons

iste

ntly

iden

tifie

d in

sm

all t

echn

olog

y ba

sed

firm

s, o

fan

ove

rem

phas

is o

n te

chni

cal d

evel

opm

ent a

t the

exp

ense

of

mar

ketin

g an

dge

nera

l man

agem

ent s

kills

' (S

mal

lbon

e et

al.

1999

),

8.4.

ST

RE

NG

TH

S, W

EA

KN

ES

SE

S A

ND

WA

YS

TO

IMPR

OV

E I

NN

OV

AT

ION

PO

LIC

YIN

STR

UM

EN

TS

The preceding section drew horizontal conclusions from the analyses

carried out on innovation policy tools in 11 European regions, Broadly

spea

king

, the

mes

sage

was

that

the

gene

ral p

rinc

iple

s fo

r so

und

inno

vatio

npo

licie

s w

ere

not m

et in

mos

t of

the

case

s st

udie

d. I

n th

is s

ectio

n, w

e tr

y to

go f

urth

er b

y as

king

the

follo

win

g qu

estio

n: h

ow c

ould

the

tool

s st

udie

d,ta

ken

indi

vidu

ally

, be

alte

red

so a

s to

get

clo

ser

to th

ese

prin

cipl

es?

In C

hapt

er 6

, the

inno

vatio

n po

licy

inst

rum

ents

hav

e be

en c

lass

ifie

d,ac

cord

ing

to th

eir

natu

re, u

nder

five

type

s, r

efle

ctin

g th

e di

ffere

nt g

oals

and

targ

ets

of th

ese

polic

y in

stru

men

ts. W

e us

e th

is ty

polo

gy f

or o

ur r

efle

ctio

n:

1, D

irec

t sup

port

sch

emes

for

R&

D a

nd in

nova

tion

proj

ects

;2, Technical personnel introduction schemes;

3, T

echn

olog

y ce

ntre

s an

d sc

hem

es fo

ster

ing

tech

nolo

gica

l diff

usio

n to

SME

s;4. Mobility schemes for researchers;

5, Innovation Brokers and innovation advisers,

For

each

-ca

tego

ry, w

e lis

t the

rel

evan

t sch

emes

stu

died

in S

ME

POL

, we

prop

ose

a su

mm

ariz

ed v

iew

on

the

mai

n ch

alle

nges

to b

e m

et b

y th

ese

sche

mes

, and

we

indi

cate

pos

sibl

e go

od-p

ract

ice

less

ons

to b

e le

arne

dacross instruments, The reader is referred to Chapter 5 for a detailed

desc

ript

ion

of e

ach

inst

rum

ent a

nd to

Cha

pter

6 f

or th

e re

sults

of

each

inst

rum

ent's

eva

luat

ion,

The

dir

ectio

ns p

ropo

sed

belo

w a

re s

een

as b

ases

for practice-oriented benchmarking exercises involving policy-makers

them

selv

es, a

nd, p

ossi

bly,

ben

efic

iarie

s.

"~' ~ í ¡

Tow

ards

a n

ew p

arad

igm

for

inno

vatio

n po

licy?

205

It s

houl

d be

not

ed h

ere

that

suc

h a

view

on

inno

vatio

n po

licy

inst

rum

ents

is q

uite

res

tric

tive,

sin

ce a

wid

e ra

nge

of o

ther

type

s of

tool

s ar

e ac

ting

onin

nova

tion

beha

viou

r: tr

aini

ng s

uppo

rt, i

nves

tmen

t sup

port

, fis

cal a

nd r

eg-

ulat

ory

rule

s, e

nvir

onm

ent r

egul

atio

ns, c

ompe

titio

n po

licy

etc.

We

focu

she

re o

n th

e ty

pe o

f to

ols

that

hav

e be

en s

ubje

ct to

ana

lyse

s in

the

SME

POL

stud

y, w

ithou

t pre

tend

ing

that

they

cov

er th

e w

hole

ran

ge o

f re

leva

nt p

olic

yin

stru

men

ts,

8.4,

1 D

irect

-Sup

port

Sch

emes

for

R&

D a

nd In

nova

tion

Pro

ject

s

Rel

evan

t ins

trum

ents

:. FFF, ERP, ITF and RIP in Austria

. Development companies and Growth Fund in Denmark

. SMART in UK

. Recoverable advances in Wallonia

. Equipment loans in Italy

. National and regional grants or loans

. Tax deductions for private R&D investments,

Mai

n ch

alle

nges

:. Lower fragmentation of support according to various aspects of

inno

vatio

n pr

oces

s, ta

ke a

long

er-t

erm

vie

w o

n su

ppor

t (en

sure

com

-plementarity with awareness-raising,

market-oriented, innovation

man

agem

ent,

com

mer

cial

izat

ion,

. , ,

sup

port

);. Increase additionality (broaden and renew client base to pick up less

obvi

ous

clie

nts)

with

out l

osin

g fo

cus

on in

nova

tion;

. Int

rodu

ce m

ore

polic

y le

arni

ng in

thes

e tr

aditi

onal

pol

icy

tool

s;. W

ork

in c

ompl

emen

tarit

y w

ith r

isk

capi

taL.

Goo

d-pr

actic

e le

sson

s:. N

T h

as s

ever

al g

ood

prac

tice

elem

ents

to o

ffer

to o

ther

sch

emes

,co

mbi

ning

hig

h re

spon

sive

ness

and

hig

h co

-ord

inat

ion,

and

usi

ng a

nin

tera

ctiv

e m

ode

of d

eliv

ery

of th

e su

ppor

t: hi

gh d

egre

e of

pol

icy

lear

ning

, witn

esse

d by

inco

rpor

atio

n of

less

ons

from

eva

luat

ions

insu

bseq

uent

pro

gram

min

g pe

riod

s, f

ocus

on

lear

ning

on

how

to in

no-

vate

in c

ompa

nies

; all-

roun

d su

ppor

t cov

erin

g fin

anci

al, t

echn

ical

,co

mm

erci

al, m

anag

eria

l and

org

aniz

atio

nal n

eeds

; lon

g-te

rm c

oach

-in

g of

fir

ms;

pol

icy

impl

emen

ters

act

as

part

ners

to th

e fi

rms

(pre

s-en

ce o

n th

e bo

ard

of c

ompa

nies

); a

ttent

ion

paid

to fo

ster

link

ages

betw

een

fim

s an

d ot

her

agen

ts e

tc.

. SM

AR

T c

ould

evo

lve

tow

ards

inco

rpor

atin

g m

ore

cons

ider

atio

n on

mar

ketin

g is

sues

, not

ably

by

deve

lopi

ng b

ette

r co

-ord

inat

ion

with

Bus

ines

s L

inks

;,. BIC takes equity in order to secure long-term support to companies

(and

pay

back

);. T

he N

etw

ork

of S

MA

RT

win

ners

intr

oduc

e an

inte

r-fir

m d

imen

sion

in a

n ot

herw

ise

very

'int

rove

rted

' too

l;. D

evel

opm

ent C

orpo

ratio

ns in

Den

mar

k en

sure

a s

parr

ing

part

ner

func

tion

for

supp

orte

d fi

rms,

in a

dditi

on to

pro

vidi

ng f

unds

;. More policy learning could be introduced in the recoverable advances

sche

me

in W

allo

nia,

thou

gh e

xter

nal e

valu

atio

ns, f

ocus

ing

on th

ean

alys

is o

f re

ason

s fo

r su

cces

s an

d fa

ilure

s in

the

supp

orte

d pr

ojec

ts,

8.4,2 Technical Personnel Introduction Schemes

Rel

evan

t ins

trum

ents

:. KIM in Limburg

. RIT in Wallonia,

Mai

n ch

alle

nges

:. Increase penetration rate of the schemes;

. Increase additionality of the schemes, i,e, their role in changing beha-

viou

r in

SM

Es,

rat

her

than

res

pond

ing

mai

nly

to f

inan

cial

con

side

r-at

ions

;. U

pgra

de f

lexi

bilit

y of

the

sche

mes

, to

adap

t the

m to

fir

ms'

cha

ract

er-

istic

s (n

atur

e of

inno

vatio

n pr

oces

s, le

vel o

f fo

rmal

izat

ion

achi

eved

etc.

),

Goo

d-pr

actic

e le

sson

s:. T

he R

IT s

chem

e ca

n us

eful

ly ta

ke le

sson

s fr

om th

e ne

ighb

ouri

ngK

IM s

chem

e an

d be

tran

sfor

med

to: f

ocus

the

sele

ctio

n cr

iteri

a in

orde

r to

ens

ure

the

intr

oduc

tion

of a

new

fun

ctio

n an

d ne

w p

rofi

le in

the

firm

; ext

end

the

RIT

sup

port

to m

arke

ting

com

pete

nces

, and

com

bine

this

sch

eme

with

the

supp

ort o

f 'm

ento

rs' w

ho 's

ell'

the

sche

me

(hel

ping

firm

s ex

pres

sing

thei

r ne

eds)

in o

rder

to e

nsur

e its

succ

ess,

8.4,

3 T

echn

olog

y C

entr

es a

nd S

chem

es F

oste

ring

Tec

hnol

ogic

al D

iffus

ion

to S

ME

s

Rel

evan

t ins

trum

ents

:. GTS and TIC in Denmark

. Austrian Technology Centres

"I,

,"1~

. Spanish Technology Centres

. RTCin UK

. Tecnopolis in Apulia and Service Centres in Lombardy

. TE

FT

and

RU

SH

/RE

GIN

N in

Nor

way

,

Mai

n ch

alle

nges

:. Reconcile self-suffciency on financial side with public service mission

(aw

aren

ess-

rais

ing

in S

ME

s et

c.);

. Com

bine

rol

e of

dev

elop

ing

supp

ly s

ide

and

resp

ond

to d

eman

ds;

. Mak

e th

e te

chno

logy

adv

iser

s ev

olve

from

a 'c

onsu

ltant

' mod

e(t

rans

ferr

ing

exis

ting

know

ledg

e fr

om th

eir

shel

ves

to th

e fi

rm)

tow

ards

a 'p

roce

ss c

onsu

ltant

' mod

e (w

orki

ng to

geth

er w

ith th

e fi

rmon

its

tran

sfor

mat

ion

proc

ess,

bri

ngin

g in

rel

evan

t kno

wle

dge

-ta

ken

from

any

whe

re -

whe

n ne

cess

ary

and

adap

ting

it to

the

part

ic-

ular

situ

atio

n), T

hat i

s, d

evel

opin

g a

dem

and-

led

appr

oach

in th

ese

cent

res;

. Reconcile openness with context sensitivity: while proximity might

help

, it s

houl

d no

t mea

n th

at s

uppo

rt n

eed

nece

ssar

ily b

e de

liver

edfr

om s

ourc

es in

pro

xim

ity; a

key

rol

e of

a te

chno

logy

cen

tre

is to

hel

pfi

rms

find

way

s to

rel

evan

t sou

rces

wor

ldw

ide,

Goo

d-pr

actic

e le

sson

s:. T

EFT

's a

ttach

és p

erfo

rm a

fir

m a

naly

st f

unct

ion,

whi

ch h

elps

them

evol

ve to

war

ds a

mor

e de

man

d-or

ient

ed m

issi

on th

an if

they

wer

eon

ly in

cha

rge

of tr

ansf

erri

ng k

now

ledg

e av

aila

ble

in th

eir

cent

re to

the firms;

. The Austrian centre Software Park, Hagenberg succeeds in perform-

ing

a m

ix o

f th

e fo

llow

ing

func

tions

: R&

D, i

ndus

tria

l dev

elop

men

t,te

achi

ng, i

ncub

atio

n et

c., w

hich

in th

e en

d fa

vour

s in

tera

ctiv

e le

arn-

ing

betw

een

rese

arch

ers

from

the

priv

ate

and

publ

ic s

ecto

rs, e

nter

-pr

ises

man

ager

s, e

ngin

eers

and

stu

dent

s;. The Spanish Technology Centres are well embedded within the local

indu

stri

al f

abri

c, w

ith e

ntre

pren

eurs

bei

ng p

rese

nt a

t con

cept

ion

and

impl

emen

tatio

n of

the

serv

ices

to b

e de

liver

ed b

y th

e ce

ntre

s (t

hey

have

'voi

ce' i

n th

e po

licy)

, Thi

s co

uld

be a

n ex

ampl

e to

follo

w fo

r th

eT

ecno

polis

cen

tre

in A

pulia

, for

exa

mpl

e, w

hich

suf

fers

fro

m a

lack

of li

nkag

es to

bus

ines

s ne

eds;

. The

UK

Lee

Val

ley

Cen

tre

wor

ks in

co-

oper

atio

n w

ith th

e B

usin

ess

Link

s, in

ord

er b

e ab

le to

offe

r a

mor

e co

mpl

ete

supp

ort t

o fir

ms

invo

lved

in a

n in

nova

tion

proj

ect,

beyo

nd th

eir

tech

nolo

gica

l nee

ds,

This helps the former to evolve from a technology-led support

tow

ards

mor

e cl

ient

-cen

tred

sup

port

;

208

SME

s, in

nova

tion

and

regi

ons:

des

igni

ng p

olic

ies

. RE

GIN

N's

app

roac

h is

to s

uppo

rt f

irm

clu

ster

s r.

athe

r th

an in

divi

dual

firm

s, w

hich

add

s th

e 'in

tera

ctiv

e le

arni

ng' d

imen

sion

to th

e su

ppor

t.

8.4.4 Mobilty Schemes for Researchers

Relevant instruments:

. FIRST-Enterprise in Wallonia

. FF

F s

chem

e fo

r st

uden

t sta

ys in

firm

s in

Aus

tria

. Mobility scheme in Denmark.

Mai

n ch

alle

nges

:. Focusing schemes on companies' needs rather than providing oppor-

tuni

ties

for

fina

ncin

g re

sear

ch in

the

educ

atio

n se

ctor

;. Ensuring a suffcient take-up of the scheme;

. Ensuring additionality of the scheme;

. Upg

radi

ng b

ehav

iour

al im

pact

of t

he s

chem

e in

the

long

er-t

erm

, in

term

s of

dev

elop

ing

last

ing

colla

bora

tive

patte

rns

betw

een

rese

arch

and

indu

stry

,

Goo

d-pr

actic

e le

sson

s:. For the First-Enterprise scheme, extend the scheme to collaboration

with

oth

er f

irm

s (r

athe

r th

an r

estr

ictin

g it

to p

ublic

res

earc

h la

bora

-to

ries

) an

d to

non

-tec

hnol

ogic

al m

atte

rs (

man

ager

ial,

stra

tegi

c, m

ar-

ketin

g), S

uppl

emen

t thi

s sc

hem

e w

ith a

new

sch

eme

for

acce

ss to

labo

rato

ries

' equ

ipm

ent b

y SM

Es,

8.4,5 Innovation Brokers and Innovation Advisers

Rel

evan

t ins

trum

ents

:. Business Links and BICs in UK

. TIC in Denmark

. Syntens and KIC in Limburg

. TEFT in Norway.

Mai

n ch

alle

nges

:. Ensure a user-oriented mission while broker has a vested interest in

the

syst

em;

. Professionalize such a job, often loosely defined; develop the skils of

brok

ers

in m

akin

g ta

cit n

eeds

app

aren

t;. I

mpr

ove

the

valu

e-ad

ded

to a

'pur

e' b

roke

rage

ser

vice

;. M

aint

ain

an in

nova

tion

focu

s an

d av

oid

dow

ngra

ding

to 'b

asic

' bus

i-ne

ss d

evel

opm

ent s

uppo

rt;

.1""

"

~ iT

owar

ds a

new

par

adig

m f

or in

nova

tion

polic

y?20

9

. Reach micro-enterprises and less obvious clients;

. Achieve good linkages with other actors in the system;

. Dem

onst

rate

effe

ctiv

enes

s of

ser

vice

s w

ith a

long

-ter

m a

nd r

athe

run

cert

ain

impa

ct.

Goo

d-pr

actic

e le

sson

s:. The 'fringe' tools in Wallonia (and other schemes) may learn from

Bus

ines

s L

inks

: the

y su

ccee

d in

mai

ntai

ning

a h

olis

tic v

iew

on

inno

-va

tion

and

in c

arry

ing

out a

sig

npos

ting

func

tion,

The

fun

ctio

n of

'Per

sona

l Bus

ines

s A

dvis

er' m

ight

be

used

as

a ba

sis

to d

efin

e m

ore

prec

isel

y th

e m

ento

ring

func

tion

deve

lope

d on

an

ad h

oc b

asis

by

several actors;

. Syntens evolved from pure brokers towards pro-active advisers, and

adde

d to

thei

r in

itial

tech

nolo

gica

l con

cern

, com

pete

nces

in h

uman

reso

urce

s de

velo

pmen

t and

str

ateg

ic m

anag

emen

t. T

hey

also

hav

ebe

en c

harg

ed w

ith a

mis

sion

to r

each

new

clie

nts

for

thei

r se

rvic

es;

. The quite innovative KIC scheme could provide lessons (on the pos-

itive

and

neg

ativ

e si

des)

to th

e nu

mer

ous

polic

y-m

aker

s in

tere

sted

inde

velo

ping

clu

ster

pol

icie

s in

thei

r re

gion

.

Alth

ough

the

abov

e su

gges

tions

for

sch

emes

' im

prov

emen

t are

pre

sent

edpe

r ca

tego

ry o

f to

ols,

one

of

the

mos

t pro

mis

ing

appr

oach

es in

the

desi

gnof

inno

vatio

n po

licy

lies

in th

e de

velo

pmen

t of

tool

s th

at c

ross

the

boun

-da

ries

of

this

typo

logy

: tec

hnol

ogy

cent

res

that

als

o pe

rfor

m b

roke

r an

din

nova

tion

coac

h fu

nctio

ns, d

irec

t fin

anci

al s

uppo

rt s

chem

es th

at g

o al

ong

with support to human resources of innovation management, mobility

sche

mes

em

bedd

ed in

wid

er s

uppo

rt to

inno

vatio

n pr

ojec

ts e

tc, A

mov

eto

war

ds a

mor

e in

tera

ctiv

e, r

espo

nsiv

e an

d fl

exib

le in

nova

tion

polic

y en

tails

the

deve

lopm

ent o

f m

ulti-

face

ted

inst

rum

ents

, or

of s

tron

g lin

kage

sbe

twee

n tr

aditi

onal

ly d

istin

ct to

ols,

8.5.

A S

YN

TH

ES

IZE

D V

IEW

ON

PO

LIC

IES

DIR

EC

TE

D A

T I

NN

OV

AT

ION

IN

SM

Es

IN A

RE

GIO

NA

L C

ON

TE

XT

The

SM

EPO

L s

tudy

has

rev

eale

d a

high

deg

ree

of h

eter

ogen

eity

in p

olic

yin

stru

men

ts a

imin

g at

fos

teri

ng in

nova

tion

in S

ME

s. T

he in

stru

men

ts h

ave

vari

ous

goal

s, s

uch

as li

nkin

g SM

Es

with

R&

D-p

rodu

cing

inst

itutio

ns o

rst

reng

then

ing

hum

an r

esou

rces

with

in c

ompa

nies

. The

sup

port

als

o co

mes

in v

ario

us f

orm

s, li

ke d

irec

t fin

anci

al s

uppo

rt, o

r se

rvic

es f

rom

tech

nolo

gi-

cal c

entr

es o

r br

oker

s, o

r un

der

the

nam

e of

clu

ster

pol

icy.

Som

e po

licie

s

clearly have a national origin while others may be Classified as regionaL.

Mor

eove

r, a

nd p

erha

ps o

f mor

e fu

ndam

enta

l im

port

ance

, the

pol

icy

inst

rum

ents

touc

h on

diff

eren

t poi

nts

of in

terv

entio

n in

indi

vidu

al fi

rms'

inno

vatio

n pr

oces

ses,

or

even

dif

fere

nt p

hase

s of

the

(col

lect

ive)

inno

vatio

npa

th o

f th

e re

gion

al s

yste

m th

ese

firm

s m

ay b

elon

g to

, For

inst

ance

, the

abili

ties

and

attit

udes

vis

-à-v

is in

nova

tion

of f

irm

s ta

rget

ed b

y aw

aren

ess-

rais

ing

inst

rum

ents

dif

fer

from

the

abili

ties

and

attit

udes

add

ress

ed b

y'li

near

' ins

trum

ents

, Som

e to

ols

mig

ht h

elp

to c

reat

e th

e ne

cess

ary

awar

e-ne

ss a

nd c

apab

iltie

s in

fir

ms,

so

they

can

aft

erw

ards

be

supp

orte

d w

ithm

ore

stan

dard

ized

sch

emes

whe

n th

ey h

ave

mov

ed f

urth

er u

p th

eir

lear

n-in

g cu

rve.

A p

rope

r se

quen

ce o

f in

stru

men

ts is

then

mor

e ap

prop

riat

e th

ana

sear

ch f

or u

nive

rsal

ly a

nd p

erm

anen

tly a

dequ

ate

tool

s,T

he e

vide

nced

div

ersi

ty, o

f co

urse

, is

not a

sur

pris

e co

nsid

erin

g th

eva

riet

y am

ong

SME

s, th

eir

regi

onal

con

text

s an

d, m

ost o

f al

l, th

e in

nova

-tio

n pr

oces

ses,

Not

with

stan

ding

this

mul

tilay

ered

div

ersi

ty, w

e ca

n co

n-st

ruct

a s

impl

e tw

o-di

men

sion

al c

lass

ific

atio

n of

the

polic

y in

stru

men

ts,

whi

ch p

rese

nts

a sy

nthe

size

d vi

ew a

long

two

key

issu

es c

once

rnin

g a

shif

tor

cha

nge

in p

olic

y pa

radi

gm (

see

Tab

le 8

,1),

We

have

cla

ssif

ied

the

SM

EP

OL

inst

rum

ents

acc

ordi

ng to

the

two

follo

win

g ke

y fu

ndam

enta

lch

arac

teri

stic

s:

1, Target level of support: firm-oriented or (regional) system-oriented,

With

the

term

'sys

tem

', w

e ex

plic

itly

refe

r to

reg

iona

l sys

tem

s, T

his

does

not

impl

y th

at n

atio

nal o

r gl

obal

sys

tem

s or

net

wor

ks a

re ir

rele

vant

bas

es f

orec

onom

ic c

o-or

dina

tion,

but

it e

xpre

sses

the

clai

med

impo

rtan

ce o

f th

ere

gion

al e

nvir

onm

ent f

or in

nova

tion

in S

ME

s, S

ome

tool

s fo

cus

on in

nova

-tio

n an

d le

arni

ng w

ithin

fir

ms

whi

le o

ther

s fo

cus

on c

ross

ing

firm

bou

ndar

-ie

s, a

imin

g fo

r ex

tern

aliti

es o

r sy

nerg

ies

stem

min

g fr

om c

ompl

emen

tari

tyw

ithin

the

regi

on a

s an

inno

vatio

n sy

stem

, The

logi

c be

hind

(re

gion

al)

syst

em-o

rien

ted

supp

ort i

s ba

sed

on th

e id

ea th

at th

e in

nova

tion

capa

city

and

perf

orm

ance

of a

reg

iona

l sys

tem

may

be

larg

er th

an th

e 's

um' o

f the

inte

rnal

inno

vatio

n ca

paci

ty a

nd p

erfo

rman

ce o

f the

indi

vidu

al 'm

embe

rs'

of the system,

2, F

orm

and

foc

us o

f su

ppor

t: fo

cuse

d on

allo

catio

n of

res

ourc

es a

sin

puts

for

inno

vatio

n or

foc

used

on

lear

ning

aim

ing

for

beha

viou

ral

valu

e-ad

ded,

At o

ne e

xtre

me

the

polic

y ap

proa

ch is

to r

aise

the

endo

wm

ent,

the

stoc

k of

given resources (in firms and regions) as inputs for innovation, In a reactive

mod

e of

inte

rven

tion,

the

polic

y in

stru

men

ts a

im a

t inc

reas

ing

inno

vatio

n

~l,

capa

city

by

mak

ing

the

nece

ssar

y re

sour

ce in

puts

ava

ilabl

e, T

he p

rinc

ipal

idea

in th

e la

tter

appr

oach

is th

at th

e w

indo

w o

f op

port

uniti

es a

nd p

rob-

lem

s to

war

ds in

nova

tion

and

supp

ort a

re c

lear

and

that

, giv

en th

e la

ck (

and

need) of certain resource inputs, policy-makers increase the innovation

outp

ut b

y al

loca

ting

reso

urce

s, th

at is

, pro

vidi

ng th

e in

nova

tion

inpu

ts o

rincreasing their availabilty (again internally within the firm or externally,

with

in th

e re

gion

), A

t the

oth

er e

xtre

me

are

the

inst

rum

ents

whi

ch f

ocus

on

learning, trying to change behavioural aspects like the organizational

cultu

re, i

nnov

atio

n st

rate

gy, m

anag

emen

t, m

enta

lity

or th

e le

vel o

f aw

are-

ness

, The

y fo

cus

on c

reat

ing

or c

hang

ing

the

win

dow

s of

opp

ortu

nitie

s an

dpr

oble

ms

conc

erni

ng in

nova

tion

and

inno

vatio

n po

licie

s. A

ccor

ding

ly, t

hem

ode

of in

terv

entio

n is

a p

roac

tive

and

inte

ract

ive

one.

The

pri

ncip

al id

eais

that

the

invo

lved

age

nts

(pri

vate

and

pub

lic, i

ndiv

idua

lly o

r co

llect

ivel

y)le

arn

by d

oing

, by

usin

g an

d by

inte

ract

ing,

Dur

ing

inno

vatio

n, u

sing

resources and interacting with others improves the awareness, the behavi-

oura

l rou

tines

and

the

ratio

nalit

y to

war

ds in

nova

tion

(and

inno

vatio

npo

licy)

,E

ach

of th

e fo

ur q

uadr

ants

of

Tab

le 8

.1 c

an b

e tr

aced

bac

k to

its

own

theo

retic

al b

ackg

roun

d or

trad

ition

ran

ging

fro

m a

tom

istic

to h

olis

ticap

proa

ches

, and

sol

utio

ns f

rom

neo

-cla

ssic

al a

nd e

volu

tiona

ry tr

aditi

ons.

The

typo

logy

inco

rpor

ates

them

all,

and

, in

fact

, it i

s su

gges

ted

that

in p

rac-

tice

none

of

them

is ir

rele

vant

in a

imin

g fo

r a

chan

ge in

inno

vativ

e pe

rfor

-m

ance

, 'L

inea

r' to

ols

dire

ctly

aim

for

mor

e in

nova

tion

perf

orm

ance

, whi

le'in

tera

ctiv

e' to

ols

addr

ess

inno

vatio

n be

havi

our,

but

add

ress

ing

beha

viou

ris

onl

y m

eani

ngfu

l if,

in th

e en

d, it

res

ults

in b

ette

r pe

rfor

man

ce.

Eve

ry p

olic

y in

pri

ncip

le a

ims

at c

hang

ing

beha

viou

r, P

olic

y-m

aker

s ca

naf

fect

the

inno

vativ

e be

havi

our

of f

irm

s di

rect

ly v

ia s

ubsi

dies

and

indi

vid-

ual p

roje

cts

or in

dire

ctly

via

the

prov

isio

n of

'har

d' o

r 's

oft'

publ

ic in

fra-

stru

ctur

e an

d in

stitu

tions

like

uni

vers

ities

or

a te

chno

logy

cen

tre,

In

aneo-classical reasoning, providing subsidies as an input to the innovation

proc

ess

is a

n in

terv

entio

n m

etho

d to

aff

ect t

he in

nova

tive

beha

viou

r of

firm

s di

rect

ly b

y in

flue

ncin

g th

e ch

oice

s ba

sed

on th

e co

st/b

enef

it ca

lcul

a-tio

ns o

f th

e ag

ents

. An

inpu

t sub

sidy

for

R&

D, o

r fo

r hi

ring

an

expe

nsiv

ehi

gWy-

educ

ated

em

ploy

ee fo

r in

stan

ce, a

ffect

s th

e de

cisi

ons

rega

rdin

gre

sour

ce a

lloca

tion

imm

edia

tely

,A

mor

e ev

olut

iona

ry a

ppro

ach

to p

olic

y in

corp

orat

es le

arni

ng. I

n th

isre

spec

t sub

sidi

es f

or R

&D

can

pro

vide

a le

arni

ng e

xper

ienc

e, W

ithin

a'le

arni

ng-t

o-in

nova

te' f

ram

ewor

k, p

olic

y su

ppor

t can

get

an

inno

vatio

npr

oces

s st

arte

d an

d su

ppor

t a c

hang

e in

the

inno

vativ

e be

havi

our

in f

irm

s or

regi

ons,

The

sup

port

may

als

o re

sult

in th

e st

atic

eff

ect o

f m

ore

inno

vatio

nou

tput

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mor

e im

port

antly

it a

ims

for

dyna

mic

eff

ects

, eff

ects

whi

ch g

oon

aft

er th

e su

ppor

t sto

ps, T

he a

rgum

ent f

or p

olic

y th

en b

ecom

es te

mpo

ral.

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Tow

ards

a n

ew p

arad

igm

for

inno

vatio

n po

licy?

213

Tim

ing

and

the

ex-a

nte

cond

ition

s be

com

e im

port

ant.

The

rea

soni

ngbe

hind

pol

icy

beco

mes

pro

activ

e ra

ther

than

re-

activ

e, T

he d

iffc

ulty

with

reac

tive

polic

y is

to k

now

exa

ctly

wha

t the

fir

m o

r th

e re

gion

nee

ds, S

ome

expr

esse

d ne

eds

may

be

'ove

r-su

ppor

ted'

whi

le o

ther

s m

ay b

e la

tent

,ne

glec

ted,

taci

t and

not

sup

port

ed. T

he a

rtic

ulat

ion

of th

e ne

ed th

en h

as to

, bec

ome

part

of

the

polic

y pr

oces

s, a

lbei

t in

an in

tera

ctiv

e w

ay, M

erel

y pr

o-vi

ding

the

reso

urce

inpu

ts th

at th

e po

licy-

mak

ers

thin

k ar

e re

leva

nt m

ay n

otbe

eno

ugh

to in

duce

a r

eal c

hang

e in

fut

ure

beha

viou

r.A

n ex

ampl

e of

the

diff

eren

ce b

etw

een

reac

tive

and

proa

ctiv

e to

ols

can

bepr

ovid

ed b

y tw

o in

stru

men

ts s

tudi

ed in

SM

EPO

L, s

imila

r at

fir

st s

ight

but

serv

ing

diff

eren

t pur

pose

s, b

ecau

se o

ne is

mor

e re

activ

e an

d th

e ot

her

mor

epr

oact

ive,

Bot

h th

e R

IT s

chem

e in

Wal

loni

a an

d th

e K

IM s

chem

e in

Dut

chL

imbu

rg, a

re s

ubsi

dies

to h

ire

pers

onne

l in

SME

s fo

r th

e co

nduc

t of

inno

-va

tive

proj

ects

, and

hav

e th

e ob

ject

ive

of ta

rget

ing

firm

s th

at a

re n

ot y

etin

nova

tive,

In

the

Wal

loon

cas

e, th

e fi

rm it

self

has

to w

rite

a f

orm

al te

ch-

nolo

gica

l dev

elop

men

t pro

ject

and

sub

mit

the

prop

osal

to th

e ad

min

istr

a-tio

n, w

ho w

il de

cide

on

the

subs

idy

acco

rdin

g to

the

qual

ity o

f th

epr

opos

al a

nd th

e re

sults

of

an a

udit

in th

e fi

rm, T

he p

erso

n em

ploy

ed n

eeds

to b

e a

tech

nici

an, I

n th

e L

imbu

rg c

ase,

an

inte

rmed

iary

(Sy

nten

s, th

e in

no-

vatio

n ce

ntre

) he

lps

the

firm

iden

tify

whe

n su

ch a

sch

eme

wou

ld b

e us

eful

,he

lps

find

the

cand

idat

e as

nee

ded,

and

doe

s no

t req

uire

a f

orm

al p

roje

ct a

sa

cond

ition

for

the

allo

catio

n of

the

subs

idy.

The

type

of

pers

onne

lem

ploy

ed is

not

res

tric

ted

to p

eopl

e po

sses

sing

tech

nolo

gica

l com

pete

nces

,bu

t can

als

o co

ver

com

mer

cial

or

man

ager

ial w

eakn

esse

s in

the

firm

, It i

sclear that the RIT is mainly responding to the financial need of the

com

pany

, Man

y SM

Es

do n

ot u

se th

e R

IT, b

ecau

se th

e fo

rmal

req

uire

men

tto

cod

ify

a te

chno

logi

cal d

evel

opm

ent p

roje

ct c

onst

itute

s a

barr

ier,

and

also

bec

ause

oth

er f

inan

cial

sou

rces

are

mor

e ea

sily

acc

essi

ble,

In

the

case

of K

IM, t

he f

ocus

is m

ore

on th

e ch

ange

of

beha

viou

r of

the

firm

and

ther

eis

an

inte

ract

ion

betw

een

the

firm

and

the

supp

ort p

rovi

der,

with

in a

mor

eop

en v

iew

on

the

inno

vatio

n pr

ojec

t,T

able

8.1

can

be

used

to e

xam

ine

unde

r w

hich

par

adig

m is

sues

(ne

o-cl

assi

cal o

r m

ore

evol

utio

nary

) th

e 40

SM

EPO

L p

olic

y in

stru

men

ts a

rede

velo

ped

and

impl

emen

ted,

The

A ty

pe o

f in

stru

men

ts m

ay b

e cl

assi

fied

as m

ore

'trad

ition

al' w

hile

D ty

pe o

f in

stru

men

ts s

eem

mor

e 'in

nova

tive'

,bu

t thi

s do

es n

ot m

ean

that

inst

rum

ents

in o

ne o

f th

e fo

ur q

uadr

ants

are

intr

insi

cally

bet

ter

than

inst

rum

ents

in a

ny o

f th

e ot

her

quad

rant

s. T

here

are

stil

soun

d ar

gum

ents

for

eac

h an

d ev

ery

type

of

tool

. The

que

stio

ntu

rns

mor

e in

to o

ne o

f th

e ch

oice

of

the

appr

opri

ate

polic

y po

rtfo

lio, a

ntic

-ip

atin

g th

e ne

eds

of th

e re

gion

(se

e se

ctio

n 8,

6 be

low

), C

once

rnin

g th

ere

sour

ce-o

rien

ted

tool

s A

and

C, t

he n

atio

nal p

olic

y le

vel m

ay in

man

yca

ses

be m

ore

rele

vant

than

the

regi

onal

pol

icy

leve

l, es

peci

ally

if th

e

supp

ort i

s ne

eded

at f

irm

leve

l and

the

lack

of

(int

erna

l or

exte

rnal

)re

sour

ces

for

inno

vatio

n is

not

reg

ion-

spec

ific

,T

he r

elev

ance

of

A, B

, C a

s w

ell a

s D

type

s of

tool

s no

t onl

y re

late

s to

diff

eren

t reg

iona

l con

ditio

ns, l

ike

the

inte

nsity

of

exis

ting

co-o

pera

tion

prac

tices

, for

inst

ance

, it a

lso

rela

tes

to th

e va

rious

iden

tifie

d di

stin

ctiv

ech

arac

teri

stic

s of

SM

Es,

The

siz

e-re

late

d ch

arac

teri

stic

s af

fect

the

need

s fo

rsu

ppor

t as

wel

l as

the

way

the

supp

ort c

an b

e de

liver

ed e

ffect

ivel

y, S

ME

s'lim

ited

reso

urce

bas

e, f

or in

stan

ce, f

inds

a r

espo

nse

in A

or

C ty

pes

of to

ols,

The

A ty

pes

focu

s on

rai

sing

end

owm

ent w

ithin

fir

ms,

and

the

C ty

pes

ofto

ols

rais

e en

dow

men

ts o

f th

e in

nova

tion

syst

em th

e SM

E is

par

t of,

or

is'in

vite

d' to

be

part

of

SME

s' d

istin

ctiv

e or

gani

zatio

nal c

ultu

re a

nd m

an-

agem

ent p

ract

ices

rec

eive

a b

ette

r re

spon

se in

B ty

pes

of to

ols,

whi

ch tr

y to

infl

uenc

e ce

rtai

n at

titud

inal

and

beh

avio

ural

asp

ects

with

in th

e SM

Es,

The

less

er a

bilit

y of

SM

Es

to s

hape

thei

r en

viro

nmen

t, co

mpa

red

to la

rger

firm

s, m

ight

be

addr

esse

d by

D ty

pes

of to

ols,

The

se to

ols

have

to ta

ckle

the

exte

rnal

unc

erta

intie

s sm

alle

r fir

ms

are

typi

cally

face

d w

ith, b

y en

hanc

-in

g th

e ca

paci

ty o

f th

e fi

rm to

und

erst

and

its e

nvir

onm

ent a

nd to

bec

ome

part

of

it (e

,g, b

y fo

rmin

g cl

uste

rs)

- th

at is

to b

ecom

e pr

o- a

nd in

tera

ctiv

em

embe

rs o

f a

regi

onal

inno

vatio

n sy

stem

rat

her

than

sta

ying

pas

sive

,un

awar

e an

d in

capa

ble

of a

dapt

ing

or in

flue

ncin

g ot

hers

tow

ards

ada

pta-

tion,

Thi

s ca

lls f

or e

xter

nal a

war

enes

s, a

nd to

ols

whi

ch te

ach

SME

s ho

w to

iden

tify,

val

ue, u

se a

nd d

evel

op r

egio

nal r

esou

rces

and

inte

ract

with

reso

urce

ow

ners

,T

he c

orre

spon

denc

e be

twee

n th

e di

stin

ctiv

e ch

arac

teri

stic

s of

SM

Es

rega

rdin

g in

nova

tion

and

the

vari

ous

polic

y ap

proa

ches

sho

ws,

fir

st o

f al

l,that each of the four types of policy instruments is relevant and, secondly,

that

the

inst

rum

ents

hav

e to

be

desi

gned

to a

ddre

ss S

ME

s' n

eeds

, exp

ress

edas

wel

l as

late

nt,

The

mai

n ou

tcom

e of

the

SME

POL

stu

dy is

that

the

polic

y to

ols

are

too

conc

entr

ated

in c

ateg

ory

A (

e,g,

in th

e fo

rm o

f fi

rms'

sub

sidi

es),

and

that

ther

e ar

e fe

w in

stru

men

ts in

cat

egor

y D

(e.

g. s

uppo

rt to

clu

ster

-for

min

g),

All

type

s of

inst

rum

ents

are

rel

evan

t to

diff

eren

t typ

es o

f fi

rms

and

diff

er-

ent t

ypes

of e

nviro

nmen

ts (

and

at d

iffer

ent p

oint

s in

tim

e), b

ut th

e m

ain

gaps

in th

e su

ppor

t sys

tem

s in

the

SME

POL

cas

es a

re f

ound

in c

ateg

ory

D,

In o

rder

to c

ondu

ct a

cha

nge

in p

ersp

ectiv

e, it

see

ms

nece

ssar

y, h

owev

er, i

nm

ost c

ases

to f

irst

dev

elop

inst

rum

ents

of

the

Ban

d C

type

s, b

efor

e th

esy

stem

and

age

nts

are

read

y to

impl

emen

t and

abs

orb

D-t

ype

inst

rum

ents

,A

s st

ated

bef

ore,

in a

ny s

peci

fic

regi

onal

situ

atio

n, th

ere

wil

prob

ably

be

a need for a mix of A, B, C and D types of instruments, For example,

A-

and

C-t

ype

inst

rum

ents

wil

be p

artic

ular

ly r

elev

ant f

or N

ewT

echn

olog

y-B

ased

Fir

ms

and

spin

-off

s, B

-typ

e in

stru

men

ts c

ould

be

used

for

less

inno

vatio

n-aw

are

firm

s, B

uild

ing

inte

rnal

cap

abili

ties

is a

nec

essa

ry

i !

d.l

step

in m

ost c

ases

bef

ore

bein

g ab

le to

par

ticip

ate

in a

D-t

ype

inst

rum

ent,

prom

otin

g in

tera

ctio

n w

ith o

ther

inno

vatin

g ag

ents

.If

a r

egio

n do

es n

ot h

ave

a lo

t of

inno

vativ

e SM

Es,

pro

vidi

ng e

ver

mor

ere

sour

ces

to th

e sa

me

grou

p of

fir

ms

seem

s le

ss a

ppro

pria

te th

an e

xten

ding

the

num

ber

of in

nova

tors

by

appr

oach

ing

non-

inno

vatin

g S

ME

s w

ith B

-ty

pe o

f to

ols.

Enh

anci

ng th

eir

lear

ning

pro

cess

and

pre

pari

ng th

em f

orm

ore

inte

ract

ive

beha

viou

r ca

n su

bseq

uent

ly b

e su

ppor

ted

by C

or

D ty

pes

of to

ols,

If

ther

e is

no

lack

of

inno

vato

rs b

ut th

ey s

eem

to in

nova

te in

rel

-at

ive

isol

atio

n, C

type

s of

tool

s m

ight

cre

ate

mor

e op

enne

ss a

nd s

timul

ate

the

use

of e

xter

nal r

esou

rces

in th

e re

gion

,There are also arguments to develop linkages between tools of the

vari

ous

cate

gori

es. I

n ge

nera

l, ho

wev

er, t

he p

roac

tive

prov

isio

n of

inte

rnal

and

exte

rnal

lear

ning

exp

erie

nces

with

Ban

d D

type

s of

inst

rum

ents

resp

ectiv

ely

wil

crea

te n

ew c

lient

s, a

nd n

ew r

esou

rce

need

s w

hich

may

sub

-sequently be effectively addressed with the reactive provision of internal or

exte

rnal

res

ourc

es, T

he o

ther

logi

cal s

eque

ntia

l lin

k re

fers

to th

e fa

ct th

at a

cert

ain

leve

l of

inte

rnal

res

ourc

es a

nd le

arni

ng e

xper

ienc

es a

re n

eede

dbe

fore

sys

tem

-orie

nted

tool

s ca

n be

effe

ctiv

e, T

his

calls

for

exce

llent

co-

ordi

natio

n an

d th

e de

velo

pmen

t of s

yner

gies

bet

wee

n al

l too

ls a

t wor

k in

the

envi

ronm

ent.

Thi

s di

scus

sion

als

o lin

ks w

ith th

e qu

estio

n of

the

rele

vanc

e of

diff

eren

tle

vels

of

auth

oriti

es f

or th

e va

riou

s po

licy

activ

ities

like

des

ign,

ada

ptat

ion,

lear

ning

, im

plem

enta

tion

and

eval

uatio

n, P

roac

tive

tool

s im

ply

mor

efr

eedo

m o

f ac

tion

and

clos

enes

s to

ben

efic

iari

es m

ore

likel

y to

be

foun

d at

regi

onal

leve

l, w

hile

rea

ctiv

e, s

tand

ard

tool

s ar

e m

ore

adap

ted

to h

ighe

rle

vels

of

auth

oriti

es,

8.6.

CU

ST

OM

IZIN

G A

PO

LIC

Y P

OR

TF

OLI

O T

OR

EG

ION

AL

SPE

CIF

ICIT

IES

An

argu

ed in

sev

eral

cha

pter

s of

this

boo

k, r

egio

nal d

iffer

ence

s in

inno

va-

tion

capa

bilit

ies

call

for

a ta

ilore

d m

ix o

f po

licy

inst

rum

ents

, Thi

s se

ctio

n,th

eref

ore,

ref

lect

s on

the

ques

tion

of th

e ap

prop

riat

e po

licy

port

folio

to b

ede

velo

ped

in a

reg

iona

l con

text

, For

targ

etin

g of

pol

icy,

cha

ract

eris

tics

ofth

e re

gion

as

a w

hole

and

SM

E-s

peci

fic

chal

leng

es f

or in

nova

tion

are

take

nas

the

poin

t of d

epar

ture

, To

achi

eve

the

obje

ctiv

e of

iden

tific

atio

n of

polic

y po

rtfo

lios,

Tab

le 8

,2 p

ropo

ses

a pi

ctur

e of

the

situ

atio

n w

hich

com

-bi

nes

the

resu

lts o

f th

e an

alys

es g

athe

red

in th

e SM

EPO

L s

tudy

, i,e

, the

anal

ysis

of

the

mai

n po

tent

ial d

efic

its o

f re

gion

al in

nova

tion

syst

ems

(see

Cha

pter

3),

and

the

anal

ysis

of

the

mai

n fi

rms'

bar

rier

s w

ith r

egar

d to

inno

-va

tion

(see

Cha

pter

s 1

and

2),

Table 8.2 Policy responses to regions' and SMEs' problems with innovation: an ilustration of possible policy objectivesand tools

SMEs' needs

Financial

N..0,Technological

Humanresources

Openness andlearningatttude

Strategy &Organization

N..'-

Organizational thinness

Attract and retain innovating firms

Foster firms to go global, link themto international partners andexternal financial resources

Linkfirms with technologicalresources outside the region

Promote collective sourcing andinvestments in collective resources

Technology centresUse private R&D centres as

technology resources for other firms

Attract/retain highly-skiled workersSupport collective training

programmes

Promotion of networking between

firms, and clusters at everygeographical scale

Support firms in linking tointernational input and outputmarkets

Develop systemic character of

innovation support: networkbrokers

Regional innovation system problems

Fragmentation

Coach firms in linking to financesources

Foster specialization by combiningtechnological support andfinance

Support the formation of sector-specifc venture-capital funds

Provide bridge betweenfirms andtechnological resources, brokers

Provide 'accessible' technology:co-operative schemes HEI -SMEs

Financefirms to access technologycentres

Foster exchange of codifed and tacitknowledge

Foster intra-frm nodes for

co-operation: hiring of

researchers in SMEs

Foster a more collaborative spirit andmore strategic orientation in theregions, Regional DevelopmentAgencies

Combine funding with interactionstimulation,

Umbrella schemes

Help firms identify, articulate and'de-bundle' their needs: innovationcoach

Invite firms collectively to help in

formulating a regional innovationstrategy: RIS/RITTS

Lock-in

Ensure long-term finance for' overall'innovation project

Support new firm creation

Address succession problemsRestructure mature industries by

attracting FDI and promotinginternational partnerships

Push firms to seek new technologyoptions

Foster access to resources outside theregion, international partnerships

Restructure the technology supportinfrastructure towards newtechnologies and sectors

Develop creative capacities of workersSubsidy to hire personnel for

innovation

,

".c,~. '.

Help SMEs evolve towards morecreativity and autonomy inproduction

Supply-chain learning,Demonstration projects

Open windows of opportunities forSMEs: techno-economicintellgence schemes

Innovation management training

The

com

bina

tion

of r

egio

nal a

nd fi

rms'

def

icits

sho

uld

form

the

basi

s fo

rth

e de

sign

of

polic

y in

terv

entio

n. T

he a

im o

f T

able

8.2

is to

enl

ight

en p

os-

sibl

e po

licy

resp

onse

s to

cer

tain

inno

vatio

n ba

rrie

rs, d

efic

its o

r ch

alle

nges

at

regi

onal

and

fir

m le

veL

. Suc

h a

tabl

e sh

ows

clea

rly

that

ther

e is

no

'one

-siz

e-fit

s-al

l' po

licy

syst

em: i

t dep

ends

on

the

prob

lem

s an

d op

port

uniti

es to

be

addr

esse

d in

the

exis

ting

cont

ext,.

It a

lso

show

s th

e ne

ed f

or p

olic

y to

pro

vide

long

er te

rm a

nd h

olis

tic s

uppo

rt to

inno

vatio

n in

all

its a

spec

ts. B

ut it

is n

ev-

erth

eles

s po

ssib

le to

dev

elop

rec

omm

enda

tions

per

cat

egor

y of

fir

ms'

pro

b-le

ms

(hor

izon

tal l

ines

in th

e ta

ble)

, per

reg

iona

l con

text

(ve

rtic

al li

nes

in th

eta

ble)

, and

per

type

of

polic

y to

ol (

with

in e

ach

cell,

eve

ry to

ol c

an b

e be

nch-

mar

ked

agai

nst t

he b

road

gui

delin

es f

or p

olic

y an

d ag

ains

t sim

ilar

tool

s of

the

sam

e ty

pe),

In

light

of

such

a ta

ble

of p

ossi

ble

inst

rum

ents

, it b

ecom

escl

ear

that

the

mai

n ro

le o

f the

pol

icy-

mak

er b

ecom

es s

ettin

g pr

iorit

ies

acco

rdin

g to

the

perc

eive

d pr

oble

ms

in th

e re

gion

, to

alig

n w

ith th

e m

ain

orie

ntat

ion

of th

e ec

onom

ic d

evel

opm

ent p

olic

y of

the

regi

on,

The

mai

n co

nditi

on h

owev

er f

or th

e us

eful

ness

of

the

prop

osed

appr

oach

, as

a gu

ide

to r

e-de

sign

ing

inno

vatio

n po

licie

s ta

rget

ing

SME

s, is

that

on

the

polic

y si

de to

o, le

arni

ng p

roce

sses

are

at s

take

, and

ade

quat

est

rate

gic

capa

bilit

ies

are

pres

ent.

In tr

ying

to c

reat

e le

arni

ng f

irm

s w

ithin

lear

ning

reg

ions

ther

e is

a n

eed

for

lear

ning

gov

ernm

ents

, Thi

s im

plie

s fo

urth

ings

in p

artic

ular

:

1, T

hat t

he r

egio

nal s

ituat

ion,

that

is th

e pa

rtic

ular

nee

ds a

nd o

ppor

tu-

nitie

s (f

or in

nova

tion

supp

ort)

of

SME

s an

d th

e re

gion

al in

nova

tion

syst

em a

s a

who

le, a

re w

ell m

appe

d, c

omm

unic

ated

and

und

erst

ood

bypolicy designers;

2, That the objectives set for policy instruments are clearly expressed ex-

ante

in a

glo

bal c

oher

ent f

ram

ewor

k an

d th

at th

e ex

pect

ed r

esul

ts a

rem

easu

rabl

e;3. That the results and impacts of the instruments are monitored prop-

erly

and

then

eva

luat

ed b

y an

inde

pend

ent t

hird

par

ty in

con

junc

tion

with

pee

rs' a

nd c

lient

s' v

iew

s;4, That lessons from the evaluation are acknowledged and diffused and

that

they

are

com

pare

d w

ith th

e po

licy

aim

s, in

ord

er to

adj

ust t

he p

olic

yap

proa

ch in

a c

ontin

uous

man

ner,

and

its

inst

rum

ents

acc

ordi

ngly

,

In m

ost o

f th

e re

gion

s st

udie

d in

SM

EPO

L, d

efic

ienc

ies

have

bee

n no

ted

in a

ll th

e as

pect

s lis

ted

abov

e: a

det

aile

d kn

owle

dge

of th

e sp

ecif

iciti

es o

fth

e re

gion

al in

nova

tion

syst

em is

oft

en a

bsen

t, no

t pro

perl

y di

ffus

ed in

ala

ngua

ge u

nder

stan

dabl

e by

pol

icy-

mak

ers,

or

not u

pdat

ed w

ith s

uffc

ient

regu

lari

ty; e

ffec

ts o

f po

licie

s ar

e of

ten

mea

sure

d in

a 'f

unds

-con

sum

ptio

n'ap

proa

ch o

nly;

eva

luat

ion

is r

arel

y bu

ilt in

to th

e de

sign

of

the

prog

ram

mes

;

i ,1

no r

eal i

ndep

ende

nt e

valu

atio

n of

res

ults

and

impa

cts

are

unde

rtak

en in

mos

t cas

es; p

ilot,

botto

m-u

p ex

peri

men

ts a

re n

ot r

eally

ass

esse

d, a

nd th

ere

is th

us a

fai

lure

to c

aptu

re le

sson

s fr

om th

ese

expe

rim

ents

; and

pol

icy

lear

n-in

g is

, in

gene

ral,

unde

rdev

elop

ed,

8.7 CONCLUSION

Dra

win

g on

the

SME

POL

fid

ings

we

have

que

stio

ned

in th

is c

hapt

er h

owpo

licy

dire

cted

at i

nnov

atio

n in

SM

Es

can

be im

prov

ed. A

fter

dis

cuss

ing

seve

ral r

atio

nale

s fo

r po

licy

we

cam

e up

with

a m

ain

ques

tion,

i,e.

did

we

witn

ess

an a

ctua

l shi

ft in

the

polic

y pa

radi

gm o

r di

d w

e fi

nd a

rgum

ents

whi

ch c

all f

or a

new

pol

icy

para

digm

? O

ur c

oncl

usio

n is

that

we

have

wit-

ness

ed s

ome

shif

ts in

pra

ctic

e, a

nd th

at w

e ha

ve f

ound

sou

nd a

rgum

ents

whi

ch s

uppo

rt o

ur c

laim

that

a s

hift

in r

atio

nale

is n

eede

d to

impr

ove

the

polic

y di

rect

ed a

t inn

ovat

ion

in S

ME

s.M

ore

prec

isel

y, w

e us

ed T

able

8. i

to d

iscu

ss th

e w

ay to

com

bine

tool

sth

at a

re r

eact

ive

or p

roac

tive

and

targ

et in

tern

al p

roce

sses

in S

ME

s, a

ndto

ols

that

are

pro

activ

e an

d ta

rget

the

exte

rnal

izat

ion

of S

ME

s or

the

func

-tio

ning

of

the

regi

onal

inno

vatio

n sy

stem

,W

e al

so p

ropo

sed

a re

flect

ion

on p

olic

y m

ixes

, usi

ng T

able

8,2

, sho

win

gth

at s

imila

r SM

E p

robl

ems

need

to b

e ta

ckle

d di

ffer

ently

acc

ordi

ng to

the

regi

onal

con

text

, but

als

o th

at th

ere

is s

cope

for

impo

rtin

g el

emen

ts o

fgo

od p

ract

ices

from

one

con

text

into

ano

ther

, A k

ey c

halle

nge

for

inno

va-

tion policy lies in the development of appropriate complementarities

betw

een

inst

rum

ents

, in

orde

r to

add

ress

the

dive

rsity

of

mod

es o

f in

nova

-tio

n am

ong

SME

s an

d of

inno

vatio

n ba

rrie

rs in

reg

ions

, Thi

s is

an

area

whe

re m

uch

prog

ress

is s

til to

be

achi

eved

,W

ith th

is d

iscu

ssio

n, w

e ca

n co

nclu

de th

at s

uch

an a

naly

sis,

with

the

thre

e ke

y fe

atur

es o

f:

. Mat

chin

g th

e co

ntex

t and

SM

E n

eeds

' pic

ture

s w

ith th

e po

licy

tool

sin

eac

h re

gion

. Con

fron

ting

the

polic

y to

ols

with

the

less

ons

of th

eory

. Com

parin

g re

sults

ach

ieve

d w

ith a

ran

ge o

f pol

icy

inst

rum

ents

indi

ffer

ent e

nvir

onm

ents

is s

uita

ble

for

impr

ovin

g SM

E in

nova

tion-

supp

ort p

olic

ies

in th

e E

U r

egio

ns,

The

bes

t way

to e

volv

e in

suc

h a

dire

ctio

n, h

owev

er, w

ould

be

to u

nder

-ta

ke s

uch

a st

rate

gic

benc

hmar

king

exe

rcis

e w

ith th

e ac

tive

part

icip

atio

n of

polic

y-m

aker

s an

d po

licy

impl

emen

ters

them

selv

es, T

heor

etic

ally

sen

sibl

eid

eas

coul

d th

en b

e co

nfro

nted

with

rea

lity.

Not

es

1. C

amag

ni (

1991

) of

fers

a r

elat

ed p

ersp

ectiv

e to

exp

lain

how

firm

s tr

ansl

ate

exte

rnal

info

rmat

ion

into

a la

ngua

ge th

at th

e fi

rm c

an u

nder

stan

d vi

a a

'tran

s-co

ding

fun

ctio

n', A

ccor

ding

toC

amag

ni: '

The

se f

unct

ions

are

per

haps

the

mos

t cri

tical

, tho

ugh

wid

ely

over

look

ed b

y ec

onom

ic th

eory

, in

that

they

cont

rol t

he p

roce

ss o

f in

terf

rm k

now

-how

tran

sfer

and

info

rmat

ion

appr

opri

-at

ion.

Util

izin

g co

difi

ed in

form

atio

n, b

oth

free

ly a

vaila

ble

or c

ostly

, and

mer

ging

it w

ith c

haot

ic a

nd u

nord

ered

"in

form

atio

n" r

esul

ts in

a fi

rm-s

peci

fic"k

now

ledg

e" a

nd p

ossi

bly

into

pot

entia

l bus

ines

s id

eas

at th

e di

spos

al o

f th

em

anag

eria

l dec

isio

n-m

akin

g' (

Cam

agni

, 199

1, p

,127

).2.

A th

ird

type

of

coor

dina

ted

econ

omie

s (n

ot f

urth

er d

iscu

ssed

in th

e ch

apte

r)is

the

keir

etsu

- or

cha

ebol

-typ

e co

ordi

natio

n am

ong

grou

ps o

f co

mpa

nies

inin

dust

ries

in J

apan

and

Kor

ea,

3. Part of this chapter was first published in Musyck, B. and G. Garofoli (2001),

'Inno

vatio

n po

licie

s fo

r S

ME

s in

Eur

ope:

tow

ards

an

inte

ract

ive

mod

el?'

,R

egio

nal S

tudi

es, 3

5(9)

, pp.

869

-72,

Rep

rint

ed w

ith k

ind

perm

issi

on o

f th

eT

aylo

r an

d Fr

anci

s G

roup

(w

w,ta

ndf.

co.u

k).

4, T

he a

dditi

onal

ity o

f th

e po

licy

tool

s is

rel

ated

to th

e ch

ange

s th

at w

ould

not

have

occ

urre

d w

ithou

t its

impl

emen

tatio

n.5.

LV

BIC

fro

m th

e U

nite

d K

ingd

om c

ould

als

o be

incl

uded

in th

is s

ectio

n.6.

Bl,

LVC

s an

d LV

BIC

from

the

Uni

ted

Kin

gdom

cou

ld a

lso

be in

clud

ed in

this

sect

ion,

7. A

s an

exa

mpl

e th

e U

K te

am fo

und

that

som

e te

chno

logi

cal c

entr

es a

re c

ater

-in

g fo

r th

e ne

eds

of la

rge

firm

s as

wel

l as

SME

s in

thei

r st

udy

of R

egio

nal

Tec

hnol

ogy

Initi

ativ

es (

RT

Is)

in th

e E

nglis

h re

gion

s (S

mal

lbon

e et

al.

1999

),8,

The

LV

Cs

from

the

Uni

ted

Kin

gdom

cou

ld a

lso

be in

clud

ed in

this

sec

tion.

9. A previous version of this chapter has been published in the Technology

Ana

lysi

s an

d S

trat

egic

Man

agem

ent J

ourn

al (

Nau

wel

aers

and

Win

tjes

2002

),T

he a

utho

rs w

ish

to th

ank

thei

r co

lleag

ue V

iki S

onnt

ag fo

r he

r va

luab

le c

om-

men

ts o

n an

ear

lier

draf

t of

this

pap

er.

10. E

ven

ther

e, in

mos

t cas

es, t

he p

robl

em is

not

so

muc

h th

e ex

iste

nce

of r

isk

capi

tal f

unds

but

the

acce

ssib

ilty

of th

ese

for

SME

s en

gage

d in

ris

ky, a

ndso

met

imes

wea

kly

form

aliz

ed p

roje

cts,

220

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