1. Program on Globalization and Regional Innovation Systems Community Participation and Emerging Forms of Governance in Economic Development Strategy David A. Wolfe Program on Globalization and Regional Innovation Systems Centre for International Studies University of Toronto Paper Presented to the Annual Meeting of the Canadian Political Science Association UWO, London, June 2, 2005

2. Program on Globalization and Regional Innovation Systems Learning in the Knowledge-based Economy As innovation becomes the order of the day –Harnessing knowledge is key to organizational success KBE/S places a premium on the ability to acquire, absorb and diffuse knowledge –Learning is central to process of adaptation Learning is fundamentally an interactive process –requires networks with users and producers External linkages of firms become critical –Systems of innovation –Regional innovation systems –Clusters

3. Program on Globalization and Regional Innovation Systems Role of Regions in Innovation Innovation is a ‘social’ process –Networks and relationships facilitate the translation of new ideas, ie. research into commercial products Innovation is ‘place-based’ –Occurs in an institutional, political and social context –Spatial proximity facilitates sharing of knowledge and capacity for localized learning –Localized learning is facilitated by common set of regional institutions Generates untraded interdependencies - technological spillovers –Knowledge and practices transferred between firms –Tacit dimension –Transferred through networks

4. Program on Globalization and Regional Innovation Systems Cluster Characteristics Defined as: –“ a geographically proximate group of interconnected companies and associated institutions in a particular field linked by commonalities and complementarities” (Porter) Beneficial outcomes of cluster collaboration: –Creates trust linkages among firms –Facilitates specialization Focus on core competence Builds critical mass Improved marketing Enhanced resources for the cluster specialized financing, education, policy supports Attracts customers, new investment, skilled talent Growth of a ‘thick’ labour market

5. Program on Globalization and Regional Innovation Systems Spatial Scales National –Industry structure - Corporate organization and governance –Legal/regulatory framework –Fiscal (taxation) and macroeconomic environment –Framework of industrial relations and labour training –Financial system –Government policy Regional –Regional areas of specialization –Research infrastructure – higher education sector –Specialized training institutions –Industrial attraction and retention –Government policy/support Local /Cluster –Physical infrastructure – transportation and communications –K-12 educational system –Civic governance –Lifestyle assets

6. Program on Globalization and Regional Innovation Systems Conceptions of Social Capital Features of social organization of a region that facilitate coordination and cooperation among economic actors –Capital refers to asset –Social connotes that it is attained through community Social capital - shared norms and trust (Morgan) –Trust is a unique asset – it has value, but no price –Earned by discharging obligations to your partners –Facilitates cooperation among firms and sectors –Expedites learning and speeds the flow of knowledge

7. Program on Globalization and Regional Innovation Systems Governance Structures in the New Paradigm Three dimensions: –Associative governance –Multilevel governance –Joined-up governance Recognizes the importance of community actors as important sources of local knowledge Helps overcomes policy silos and improve coordination across different levels of government Allows for economic development to be addressed holistically (e.g.. Transportation)

8. Program on Globalization and Regional Innovation Systems Making Multilevel Governance Work: The Role of Institutional Learning Challenge is to structure knowledge in social ways –establish effective mechanisms for local social knowledge management Requires higher order of learning –By institutions engaged in critical /reflexive self-monitoring ‘learning by learning’ –Three learning dynamics Civic learning Administrative learning Policy learning Changing role of the state –Associative governance –Public sector as facilitator –Key role is coordinating and consensus building

9. Program on Globalization and Regional Innovation Systems Role of Collaborative Institutions Formal and information organizations that: –Facilitate exchange of information and technology –Foster cooperation and coordination Enhance social capital and improve competitiveness by: –Creating relationships and establishing trust –Creating collective institutions –Identifying common strengths and developing common agenda Strategic planning exercises draw upon social capital created by these institutions –Generate trust by engaging key social partners in ‘talk’ – builds set of shared understandings and expectations

10. Program on Globalization and Regional Innovation Systems Creating Collaborative Institutions “The presence of collaborative institutions and organizations, such as cluster organizations, professional networks, research-industry consortia and entrepreneurial support networks, greatly facilitates this environment. These alliances, networks and other relationship-building mechanisms create connections and linkages vital to economic development in a technology-driven world.... many regions fortunate enough to have university research assets underuse these knowledge economy resources, precisely because relationships have not been established to connect the university and local industry... Relationships matter.” (Montana et al. 2001)

11. Program on Globalization and Regional Innovation Systems Business Attraction Strategies in the New Paradigm First wave (1950s – 1970s) –Firm attraction based on cost subsidies –“Smoke-stack chasing” Second Wave (1980s) –Expand research infrastructure –Upgrade training and education capacity –Fill gaps in financing, support for SME’s, tech transfer Third Wave (1990s - ) –Builds on principles of associative and joined-up governance –Responds to demand from private or joint public/private initiatives –Leverages resources and recruits non-public sources of knowledge

12. Program on Globalization and Regional Innovation Systems Strategic Planning at the Community Level Innovation-based strategic planning –Promotes innovative ideas in all aspects of regional economy –Facilitate relationship-building Strategic assessment of local/regional assets –Workforce skills –Knowledge assets and R&D –Creative elements –Infrastructure –Quality of place –Collaborative institutions –Entrepreneurial networks and clusters Key Role of Community Leadership –Civic entrepreneurs bring civic interests together to collaborate Create broad buy-in across all sectors of community

13. Program on Globalization and Regional Innovation Systems Best Practices Made in Ontario examples –Sector strategies, 1992-1996 –Office of Urban Economic Development Toronto, Ottawa cluster studies –Ontario Competitive City Regions initiative –Biotechnology Cluster Innovation Program (BCIP) –Regional Innovation Networks Lessons for Policy –Adopts principle of ‘joined-up’ governance –Focuses on alignment of strategic assets and resources –Associative and reflexive Brings the community back-in