Policy analysis – ESF/ECRP project ’Constructing Regional Advantage: Towards State-of-the-art Regional Innovation System Policy in Europé’ Professor Bjørn Asheim, Deputy Director, CIRCLE (Centre for Innovation, Research and Competence in the Learning Economy), Lund University, Sweden Presentation, ESF/ECRP project meeting Utrecht, February 2008

Bjørn Asheim, 2007 The key points to remember Knowledge creation and innovation are strongly shaped by specific knowledge base(s), but take place in all kind of industries VoC argues that different national institutional frameworks (LMEs vs. CMEs) support different forms of economic activities due to different types of institutional complementarities No optimal or best way to promote innovation in different industries in a globalising knowledge economy. Innovation policies must be adaptive and context sensitive (customized and fine-tuned)

Bjørn Asheim, 2007 Policy challenges: Peripheral and old industrial regions Less innovative in comparison to more agglomerated regions Less R&D intensity and innovation A less developed knowledge infrastructure (universities and R&D institutions) Suffering from institutional thinness Overspecialised in mature industries experiencing decline Few R&D activities, mature technological trajectories, cognitive lock-in University and public research oriented at traditional industries / technologies Source: Tödtling & Trippl (2005)

Bjørn Asheim, 2007 Policy challenges: Fragmented metropolitan and innovative regions Many and diverse industries/ business services Lack of dynamic clusters of (local) innovative firms and knowledge spill-overs R&D departments and headquarters of large firms Many and high quality universities and public research organisation but weak industry-university links Regions with cutting edge technologies and a high level of R&D Exposed to new challenges and competition from emergent economies Diversify into new but related industries New ways of continuous innovation support (Constructing Regional Advantage - CRA) Source: Tödtling & Trippl (2005)

Bjørn Asheim, 2007 From competitive to constructed advantage: Regional Policy Challenges Imitation and adaptation is not any longer a sufficient strategy for regions. Unique advantages have to be actively constructed Industrial renewal takes place in-between and beyond existing sectors – need for transcending traditional sector policies (platform policy) Innovation through combining existing knowledge, technologies and competencies with new generic technologies (IT, biotech (green and white)) How to shape conditions for constructing regional advantage (CRA)?

Bjørn Asheim, 2007 From comparative to constructed advantage Comparative advantage: criticized for dismissing the role of technological change and innovation Competitive advantage: too narrowly institutional oriented by focusing on the creation of endogenous capacity of regions to learn and innovate by a combination of markets and networks Constructed advantage: acknowledges more the important interplay between industrial dynamics (knowledge bases) and institutional dynamics (i.e. different knowledge bases need different kinds of institutional support) as well as private-public complementarities in policy making by a stronger focus on actors, agencies and governance forms (addressing system failure).

Bjørn Asheim, 2007 Need for new typologies In the globalising knowledge economy knowledge creation and innovation processes have become increasingly complex, diverse and interdependent in recent years. Thus, there is a need to go beyond simple taxonomies and dichotomies: Pavitt’s taxonomy (1984): - behaviour of innovating firms - sources for innovation Low tech vs. high tech (OECD’s classification of R&D intensity) Codified – tacit knowledge

Bjørn Asheim, 2007 Content of policies for Constructing Regional Advantage Proactive and trans-sectoral, platform oriented policies (transcending traditional industry specific policies): 1. Related variety (spillover effects) 2. Differentiated knowledge bases (synthetic, analytical and symbolic) 3. Distributed knowledge networks

Bjørn Asheim, 2007 Platform policies – Japan’s new cluster policy: Ex: Strengthening policies for advanced component/materials industries

Bjørn Asheim, 2007 Principles of policies Types of Policy Indirect, general (framework cond.) Direct, general Direct, specific Science policy Basic research in universities and research institutes/ (T-H) - IPR policy Technology policy Specific ‘strategic’ technologies and sectors - public procurement policy Innovation policy SkatteFUNN (tax relief) - Norway Vinnväxt (T-H)/ VINNOVA – Sweden (CRA) TYPOLOGY OF POLICIES

Bjørn Asheim, 2007 Regional Innovation Policy: A Typology Support: Financial and technical Behavioural change: Learning to innovate Financial supportMobility schemes Firm-focusedBrokersLearning work organisations TechnologyRegional System-focusedcentresinnovation systems

Bjørn Asheim, 2007 What is Regional Innovation Systems (RIS) – narrow definition (human capital strategic): A RIS is constituted by two sub-systems and the systemic interaction between them (and with non- local actors and agencies): The knowledge exploration and diffusing sub-system (universities, technical colleges, R&D institutes, technology transfer agencies, business associations and finance institutions) The knowledge exploitation sub-system (firms in regional clusters as well as their support industries (customers and suppliers))

Bjørn Asheim, 2007 What is a RIS - broad defintion (social capital strategic): A system of organisations and institutions supporting learning and organisational innovation, and their interactions with local firms (learning regions): Developmental (creative) learning: competence building – learning work organisation Reproductive (adaptive) learning: interactive learning (user-producer relationships) – inter-firm networks A market/demand/user driven system mostly generating incremental innovations

Bjørn Asheim, 2007 Different modes of innovation and forms of work organisation and learning ’How Europe’s Economies Learn. Coordinating Competing Models’ : Different modes of innovation and forms of work organisation 1. STI (Science, Technology, Innovation) – high-tech (science push/supply driven) - LME 2. DUI (Doing, Using, Interacting) – Competence building and organisational innovations (learning work organisation) – market/demand/user driven - CME Different forms of learning 1. Developmental (creative) learning – the ’logic’ of knowledge exploration – learning work organisation 2. Reproductive (adaptive) learning – the ’logic’ of knowledge exploitation

Bjørn Asheim, 2007 Type of knowledge Type of RIS Analytical/ science based Synthetic/ engineering based Symbolic/ artistic based Territorially embedded (grassroots RIS) IDs in Emilia- Romagna (machinery) ’Advertising village’ – Soho (London) Networked (network RIS) Regional clusters – regional university (wireless in Aalborg) Regional clusters – regional technical university (mechanical in Baden-Württemberg) Barcelona as the design city Regionalised national (dirigiste RIS) Science parks/ technopolis (biotech, IT) Large industrial complex (Norwegian oil and gas related industry) RIS TYPOLOGY