Susana Borras Blog

Since the seminal work of Chris Freeman in the late 1980s and early 1990s, evolutionary economists and other social scientists have been observing the importance of collaborative forms of interactions when firms conduct innovation. These innovation networks across firms have traditionally been deeply embedded locally, forming localized economies with significant knowledge spill-overs. Perhaps one of the most well-known examples of these localized innovation networks forming a highly-innovative and localized economy is the case of Silicon Valley.

However, with the rise of the BRICS (Brazil, Russia, India, China and South Africa) as influential emerging economies during the past decade, the question whether innovation networks are becoming globalized is not trivial. This is so for two important reasons. Firstly, because implicit in much of the early and current academic literature assumes that innovation networks are essentially localized and territorially-bounded. However, this assumption might prove to be inaccurate, given the apparent interest of firms to create collaborative links in areas of advanced knowledge and innovation with firms located elsewhere, and increasingly so with firms located in BRICS countries. In other words, the internationalization and globalization of innovation networks would perhaps come to prove that parts of our theories regarding localization are incomplete. AnnaLee Saxenian, the expert in Silicon Valley, expressed this very clearly in her book “ The New Argonauts”. She convincingly argues that the strength of Silicon Valley is based on the Indian and Chinese-born “Argonauts” who interact across international borders, and have made Silicon Valley a strong hub for innovation networks in information and communication technologies around the globe.

Secondly, the question whether innovation networks are becoming global is not a trivial question because some of the notions upon which national innovation policies are based might need to be reconsidered. Naturally, national tax payer money and national policy instruments must benefit the nation nal economy. However, as the national economy is becoming more interdependent with other national economies, the boundaries of what is ‘national’ and ‘national interest’ is becoming less clear from the perspective of public action. For example, the Danish government has very active innovation centres in Shanghai and Hong Kong, serving the interests of Danish firms willing to establish innovation-related projects with Chinese firms. This helps Danish firms tapping into knowledge resources complementary to those in Denmark for purpose of developing specific forms of innovation (new products, new services) specifically designed for the Chinese market, for the Asian market, or just directly, for the global market.

In the recently finalized research project INGINEUS, a group of researchers (were Copenhagen Business School was included), found that the globalization of these innovation networks is still an emerging trend. In the INGINEUS survey more than 1.200 companies were asked about their global dimension, their innovative dimension, and their ‘networkedness’ dimension. In other words, how global/regional/national they are, how innovative they are, and how networked they are. Around 50% of the respondents indicated the co-existence of medium to high levels of ‘globalness’, innovativeness and ‘networkedness’. In other words, half of the sample is to a medium or low degree engaged in global innovation networks in the weakest definition of those global networks. However, when examining the strongest possible forms of globalness, innovativeness and networkedness, less than 2% of the firms were truly participating into global innovation networks.

These findings give a realistic picture about this phenomenon. They tend to show that much of the issues regarding global innovation might be overestimated at the moment, particularly those involving firms based in the BRICS. Having said that, however, the findings also show that the overall number of firms combining medium-levels of these variables is quite high in our sample, meaning that there might be a trend coming up. This is also what anecdotic evidence in popular media is telling us regarding individual firm cases. Furthermore, it is worth remembering that the Chinese, Indian, Brazilian and South African governments are investing heavily in R&D and in innovation activities these days. All of this is to say that, claims stating we are moving towards a new geography of innovation dominated by the BRICS seem to be overestimated, at least at this moment. A more realistic picture is that the emergence of global innovation networks is a gradual and incipient phenomenon. In other words, the networking Argonauts of Silicon Valley are still the exception rather than the rule.

You can read the full INGINEUS policy brief here:

http://www.ingineus.eu/UserFiles/attach/201237933534INGINEUS_4PB.pdf

The Danish Research Policy Council organized two days ago a national conference on how Danish universities can create value for society and the economy. With more than 200 key stakeholders of the national research world gathering in central Copenhagen, the conference constituted an important meeting point amid current discussions about the role of  universities. These discussions follow on from the recent university law reform in early 2011, and in light of the new coalition government that took power in early October this year.

In particular, the conference focused on three themes: public-private collaboration on research and innovation; the public sector as an engine for innovation; and research leadership in universities.

Many good points were raised and discussed extensively during the conference. In view of shortage of space and time, let me just present my personal take on things.

Value-creation in a wider sense

In spite of the extensive debate over the past two decades regarding the role of universities, too much attention is still being paid to the ‘input’ side of universities’ research activities (amount of external funds raised, number of  PhDs enrolled, scientific personnel/student ratios, etc.), and too little on the ‘output’ side (publication ratios, citation impact, numbers of patents and licences). The conference reached a general consensus that this narrow perspective needs to be readdressed, because universities’ research generate value in a much wider sense. Universities’ broader research outcomes include non-commercial solutions to convoluted socio-technical problems, efficiency improvement of processes in manufacturing and service sectors, and sophisticated models that facilitate forecasting or help seing old issues under a new prism. This wider understanding of the value-creation of research requires a substantial emphasis on universities’ dissemination and outreach activities, which requires improved professionalization of personnel dedicated to these particular activities. Furthermore, this wider value-creation needs to be reflected the way in which universities organize themselves. The new Minister of Education promised that Danish universities will be given greater autonomy to organize themselves according to their own needs. However, he added, there will be an increased focus on the quality of their outputs, particularly in terms of their contribution to a wider value-creation. 

Universities stimulating innovation in the public sector

The public sector constitutes around 50% of the Danish economy. For this reason, the role of university research in improving and stimulating innovation in the public sector is crucial. The Danish public sector is very dynamic and flexible, with substantial effort dedicated to development activities. However, with the exception of the health sector, these development activities very rarely consider the research carried out at universities. Hence, a number of bridges need to be built to bring these two worlds together. Firstly, both universities and the public sector need to become more visible to each other. This can be achieved via effective and specifically designed information channels (web portals, dissemination activities, etc.), or through ‘science speed-dating’ between public sector organizations and university research teams. Secondly, there are a number of motivational factors to be addressed. Many researchers have a genuine interest in making a difference to the society above and beyond publishing in scientific journals, and this genuine interest can be a driving force to identify research problems that address real-life public sector problems. Finally, it may be wise to consider the possibility of concrete economic incentives, either in the criteria of conventional public research funding to include public sector organizations, or in the creation of a specific-purpose funding mechanism for public sector-related research.

The challenges for university research leadership

When asked which leadership level within a university is responsible for the production of good research, the audience overwhelmingly pointed to the level of research groups; the lowest level of leadership possible within a university. It is interesting to note that respondents did not point to the Deans’ offices, or even Heads of Department, but instead looked to the day-to-day research leaders with direct hands on research teams. This calls for serious consideration of the importance of allowing excellent university leaders to continue to perform well in research and education tasks (rather than forcing them into administrative tasks). This can only happen if universities offer these research leaders the necessary quantity and quality of administrative support that allows them to remain focused on the actual research and teaching. Moreover, it is important that the leadership competences of research leaders are constantly improved through targeted leadership development programs.

The conference brought about a lot of food for thought for the future development of universities in Denmark, and especially for the new government.

The European Commission has proposed in February 2011 some general guidelines for a new Common Strategic Framework for research and innovation in the EU. The Member States and European Parliament will have the final word in the near future. In the meanwhile the debate has reached cruiser altitude and is actively mobilizing the multiple interests and ideas about the future of research and innovation inEurope.

There is a lot at stake inEurope. The severe economic crisis and the increased knowledge-based market competition at global level have brought to the fore the need of a serious re-thinking of how the EU supports advanced knowledge-creation and its economic-industrial implications. Besides, the severe public budget retrenchments everywhere inEuropecall for a more efficient use of public spending.

It is therefore of paramount importance that the current political window of opportunity for a major recasting of EUs research and innovation policy is not missed. It is true that it takes time to change the course of a super-tank and that profound organizational change is indeed rare and risky. ButEuropecan no longer afford piecemeal tinkering in this fundamental policy area.

With this in mind, I would like to focus on the 7 most pressing problems of current EU research and innovation policy, and suggest some courses for action:

Problem number one in the EU is the high level of administrative burdens of EU research and innovation policy administration. A long-lasting culture of micro-management has negative consequences in terms of researchers and innovators’ wasted time. The EU needs a much higher level of ambition than suggested in the green book on this particular item. It needs to create a true culture of ‘user-friendly’ grant application and management procedures, it needs to reduce ‘time to contract’ dramatically, and it needs to create one single set of rules across programs.

A second problem in the EU is what can be called a “research and innovation program jungle”: multiple programs and policy instruments with little critical mass to make a difference inEurope, some of them openly overlapping each other. The future Common Strategic Framework should not just be ‘old wine in new bottles’ where new tags and clusters of instruments end up changing nothing. On the contrary, this is a unique opportunity to make a serious effort to implement the moratorium on new instruments that was suggested by the panel evaluating FP7, and, if necessary, to take decided steps to reduce the number of existing ones.

The third problem in the EU (and at national level too) is an unhealthy obsession with measuring effects and controlling outputs. To be true, tax-payers money must be administered sensibly particularly in these days of scarcity and retrenchments. Having said that however, one might consider whether the pendulum has swing too far when it comes to measuring ‘deliverables’ and ‘milestones’ on their own face value, rather than on the scientific achievements of the projects. It is worth reminding here that a risk-aversion culture is opposed to any sort of scientific and innovative spirit. We need to keep on repeating ourselves that deliverables are not goals on their own right. Instead, the ability to produce ‘ground breaking’ knowledge and its application are the true added-value of scientific projects, even at the expenses of some few scientific fiascos.

The fourth problem is that since the 1980s there has been an insurmountable separation at the EU-level between research programs on the one hand and innovation-oriented policy initiatives on the other. This has not only been a mere administrative separation, but two differentiated states of mind. This adds up to the relative difficulties encountered when thinking ‘systemically’ when considering the EU supra-national level and the cross- national level.  This calls for a re-thinking about the laudable efforts towards a European Research Area put forward in the year 2000. Perhaps it is about time to think about a European Research and Innovation Area. The recent plans for a “Innovation Union”, which includes goals like a single community patent, or EU-level technical standards, are steps into the right direction. Yet they need to be better integrated strategically into a ERIA notion.

The fifth problem is that some programs and instruments at the EU level have become ‘catching-all’ activities, and have for quite some time lacked a clear focus. The portfolio of policy instruments and programs at EU level is ample enough. Yet, this portfolio might need to sharpen its overall profile by examining whether there is the right balance between two fundamental dimensions, namely, the curiosity-driven research and the close-to-the market innovation support; and between diffusion-oriented measures and mission-oriented strategic activities. It is worth mentioning that the fashionable focus on ‘lead markets’ and in ‘grand challenges’ are very suggestive. But this should not be at the expenses of the other fundamental aspects like diffusion-oriented measures (like demonstration or pilot-testing) which even if less visible politically, they entail substantial benefits to the innovation process.

A sixth problem is how to address the eternal tension between internal-external dimension. The EU is a crucial and nodal point for research and innovation inEuropein a supra-national dimension, but it does not work in isolation. European inter-governmental organizations like EMBO, CERN, ESO or ESF are fundamental elements in the European system. The EU has strengthened its links with some of them, particularlyEUREKAand ESA. Yet, when re-casting the EU Common Strategic Framework this European dimension must be a pivotal aspect, searching for synergies but also reducing overlap.

The seventh problem is how to strike the balance between research/innovation excellence and competence-building. There is great diversity, both geographically and organizationaly, about levels of excellence and capability inEurope. One crucial aspect that deserves more attention is research education and training. Whereas leveling out European research and innovation capabilities is a very long-term goal, building competences in the younger generations is a crucial and indispensable step into the right direction. For that reason creating trans-European doctoral schools and addressing the severely oversubscribed Initial Training Networks program (People) deserve serious political attention.