Emerging value clusters in the New Member States: the role of networks of collaborative innovation

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Emerging value clusters in the New Member States
the role of networks of collaborative innovation

• Growth and Jobs Conference Budapest, 6-7 April,
  2006
• Session Technological Changes RD and ICT
• Hans Schaffers
• Telematica Instituut
• http//www.telin.nl/
• hans.schaffers_at_telin.nl

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COMIST project FP6-2004-IST-3 Specific Support
Action

• Stimulate NMS research organisations and SMEs to
  participate to EU research in the IST priority
  area
• Focus on strengthening the position of NMS in
  innovation networks in the area of new work
  business environments
• Build strong integrative networking relations
  with the current and future IST programme,
  through AMI_at_Work communities (www.ami-communities.
  net)
• Explore opportunities of collaborative innovation
  to strengthen emerging value clusters in NMS
  (e.g. logistics, manufacturing, agri-food sectors)

ZRS-RAS
http//www.ami-communities.net/wiki/COMIST
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Key points

• New ways of collaborative innovation enable new
  member states to exploit the opportunities of
  critically important economic clusters
• New work and business environments and new
  business concepts support networks of
  collaborative innovation
• Strengthening NMS innovation systems in the area
  of new work and business and building strong
  integrative networking relations with IST
  provides necessary instruments

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Example

• Cooperation for Innovation between
• COSPACES Integrated project
• PANAC Automotive Cluster
• COMIST project
• VARINEX
• To establish Automotive Living Lab in Györ
• Memorandum signed 5th April 2006

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Trends in new ways of working

• Work environment in transition from fixed
  location to multi-location and virtual work
  emergence of global working
• Increasing importance of collaboration across
  organizational units and organizations, and of
  ad-hoc networks of knowledge workers
  (professionals)
• People are involved in different projects,
  communities, groups, requiring the availability
  of cooperative workplaces in different
  situations, locations, places, time-zones
• Implications
• Users currently drowned in many different and
  non-interoperable tools, hindering a quick
  set-up of ad-hoc cross-organizational
  collaboration when needed
• New organizational and human issues emerge
  flexibilization work-life balance leadership
  and management in distributed settings,
  collaborative culture

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Business relevance of new ways of working

• Enabling seamless adaptation to market dynamics
• Quick set-up of required business networks /
  project spaces / for instant cooperation
• Seamless integration of separate work practices
  in a common workspace
• Simplifying collaborative work business
  processes
• Create virtual, ad-hoc and temporary teams /
  organisations
• Independent of place and time -gt enabling global
  working in different time-zones
• Enables collaboration in distributed teams
• Managing workflows in distributed networks
  (multiple time-zones)
• Empowerment of individual knowledge workers
• Responsibility, self-organisation capabilities
• Employability (including disabled, ageing people)

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Business value

• Apparent business need
• Decentralized working is spreading fast, e.g. in
  RD, or global value networks, and the need for
  improving dispersed collaboration, knowledge
  management and coordination has become visible
• Proven value creation potential
• Workplace innovation contributes to considerable
  share of productivity growth (30 of output
  growth, 89 of multifactor productivity
• Potential reduction of management overhead is
  considerable (20 30 )
• Documented examples of how collaborative
  technologies create value (Toyota, Airbus, ).
  Construction sector 28 of costs caused by
  wastage these costs can be reduced considerably.
  Manufacturing integration of design, production,
  marketing leads to increasing time-to-market and
  better quality.
• Clear market signals
• Gartner has started a new programme
  High-Performance Workplace in 2005 -gt reflects
  FWS as priority area
• Microsoft New World of Work emphasizes
  decentralised forms of collaboration of knowledge
  workers -gt sign of strong industry relevance
• European Commission DG INFSO has allocated one of
  two largest strategic priorities to the area of
  collaborative working environments.

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Business areas

• Globalisation of business domain increasing
  competition, requiring decreasing TTM and cost
  leadership
• Distributed cooperative activities (e.g.
  multi-nationals, global presence) and diminishing
  importance of location and distance
• Complexity of products and processes
  (information-intensive, intelligent, connected in
  networks, (global maintenance and repair)
• Dependency on multiple partners, often
  temporarily cooperating in ad-hoc value networks.
• Process industry cooperative plant design
  construction, supervision, maintenance
• Manufacturing (automotive, aerospace,
  electronics) cooperative design engineering,
  multi-partner product life-cycle management
• Building construction distributed cooperation
  in constructing offshore facilities in
  designing, building, maintaining construction
  works (architect, facilities management,
  subcontractors, consultants, clients)

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Multiple, changing locations
1. Full MobilityOn the move, nomadic
Journalists, multi-site managers, regional
global sales persons, service engineers.
Multi-time shift work patterns. Individual and
team workplace
4. Networked Workplace Work is distributed over
many sites. Sites may change. Work is carried
out collaboratively. E.g. 24h software
development, complex design and engineering
tasks
Work locations
2. Site Mobility On site context-sensitive locati
ons, kiosks, encounter designs, hospitals.
Co-located but mobile and collaborative teams
e.g. researchers and construction site workers
3. Multi-location Workplace Fixed locations and
ad-hoc mobility buildings on campus, field
engineers, home work. Also permanent co-located
teams (office workers)
Fixed location
Low
High
Continuous
Frequency of Changing Worker Location
www.mosaic-network.org
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Ad-hoc networks of mobile professionals
supported by ubiquitous collaboration services
Efficiency,Effectiveness, Experience of
mobilework
Multi-locationworkers supported byservice-based
mobileworkplaces
Mobile workerssupported bysmart devices
Landing places for new ways of working
2014
2008
2006
2010
2012
MOSAIC project www.mosaic-network.org
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Roadmap for collaborative working(MOSAIC, 2006)
MOSAIC project www.mosaic-network.org
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Deployment?
Source Gartner (2005)
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Key business strategic factors for regional
networks of SMEs
Take advantage of cost reduction opportunities
Resource sharing Optimisation of procurement
and co-development processes
Introduce Innovation within the whole Value
Network Meet the challenges of the innovation
needs of the network customers Acquire network
competitive advantage, by leading innovation
developments in the network relevant industries
Human potential and creativity deployment

• Improve effectiveness and efficiency of
  collaborative operations among the SMEs within
  the network
• Improve collaboration capability of all the
  Network SMEs
• Intensify and expand use of collaborative working
  
• Full utilisation of the ICT means potential

• Manage the network Knowledge
• Capability of managing, within the network
  distributed environment, the knowledge associated
  to the typical products offered by the SME
  network.
• Development and retention of network core
  competences
• Enable network knowledge workers Lifelong
  learning

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New emerging business entities

• Emerging Entities
• Virtual Enterprise Networks
• Professional Communities
• Living Labs

• Key strategic elements for socio-economic
  development
• Human potential and creativity deployment
• Extensive use of collaborative working
• Innovation mechanism based on new human
  interaction patterns freed from organisational
  constraint
• Fully deploy the potential of ICT

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Inclusion of ten new member states raises new
challenges

• Evolution towards ER(I)A
• Strengthen position of NMS in innovation networks
  and create new value clusters
• New economic relations (companies, regions,
  countries)
• New initiatives focusing on promising clusters
• Poland aviation
• Lithuania ICT services
• Estonia software
• Hungary automotive
• Improve viability of clusters through mechanisms
  of collaborative innovation

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We know a lot about cluster building and
alignment of NMS

• OECD LEED programme promoting enterprise in
  central and Eastern Europe policies, good
  practice
• Cluster mapping, public private partnerships,
  local development, national strategies to embed
  FDI
• IPTS-led studies development of the IS and
  outlook for NMS FISTE
• Country studies and benchmark (Gáspár)
• Potential of ICT for development and economic
  restructuring NMS (Piatkowski)
• Regional and national factors determing IS
  development, tiger conditions (Bogdanowicz)
• European Trend Chart on Innovation country
  studies
• Scientific literature e.g. Slavo Radosevic
  industrial architecture of wider Europe
• Weakest node national network, local firms

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Alignment of NMS to EU-15INSEAD study for SAP
(2004)

• Aligment of new member states competitiveness of
  new member states in the ICT domain
• Using an eEurope index 1. Internet indicators,
  2. Modern on-line public services, 3. Dynamic
  e-business environment, 4. Secure information
  infrastructure, 5. Broadband deployment
• Malta, Estonia are leading NMS and totally
  aligned
• Somewhat aligned Slovenia, Czech rep., Poland,
  Cyprus, Slovak rep., Latvia ( Portugal, Greece)
• Needing to make progress Lithuania, Hungary,
  Romania, Bulgaria
• Indicator Dynamic e-Business Infrastructure
  Malta and Estonia are top ranked NMS
• gt Study did not cover e-work apart from some
  telework indicators, nor economic sectors

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ICT and social cohesion challengesStudy of
Empirica (2004)

• Social cohesion income distribution, labour
  market inclusion, educational opportunities
• Analysing ICT infrastructure on basis of
  indicators
• Social cohesion Poland, Slovakia, Baltic states
  appear to have the largest gaps to close
• Also Czech Rep., Hungary, Slovenia face
  challenges
• IT use Estonia, Slovenia take the lead, followed
  by Czech rep.
• ICT skills seem to have positive relation with
  employability risk of new generational divide
• In particular middle ages and elderly are
  affected by digital divide
• Except Estonia, social divide digital divide
• gt No information about sectors

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Signs of dynamic developmenteBusiness Watch
(2005)

• Studied EU-7 (DE, UK, FR, ES, CZ, PL, IT)
• Indicators
• A. Basic ICT (Internet access, LAN, VPN etc)
• B. Internal processes (Intranet, ERP, ..)
• C. Supply side activities (buying, procurement,
  SCM ..)
• D. Customer-facing activities (CMS, CRM, ..)
• E. Usage of electronic standards (e.g. XML)
• Total Index (national industry structure affects
  results)
• DE 100
• UK 98
• FR 86
• ES 84
• CZ 69
• PL 67
• IT 65
• Dynamic development in Poland, e.g. strong in
  using standards

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Trends in re-location and e-workingEmergence
project (2004)

• Aim of Emergence (www.emergence.nu) to map and
  measure the rapid expansion of eWork work
  carried out by means of ICTs, enabling to locate
  work anywhere in the world where workers with
  right skills and infrastructures are available
• Introduction of ICTs causes shifts in location of
  employment within and between regions
• Not just a matter of zero-sum re-location, but
  part of expensionary process
• eReadiness indicators telecom infrastructure,
  human resources
• eOutsourcing more widely used in Hungary, Poland,
  Czech rep. than in EU-15 weakness or strength?
• See also JANUS project (www.janus-eu.org) about
  knowledge society development paths
• gt Emergence does not adress the use of eWork and
  ebusiness in particular sectors

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Knowledge Society Development Paths (JANUS)

• Turn diversity into competitiveness.
• Different country profiles demand diverse
  strategies
• Building innovative regions
• The champion led model
• The Diaspora model
• The integrated local public sector push model.
• Success factors in common for most regional
  approaches include strong public policy support
  for investment, solid education systems and
  conductive regulatory frameworks as well as
  particular regional strengths, such as human
  capital skills and industrial structures.
• Developing an appropriate regional strategy
  requires a more nuanced, subtle and bottom-up
  approach than that suggested by the standard
  Information Society model of regional
  development. To create the conditions for
  competitive knowledge creation and innovation,
  regions must find the right balance between order
  and chaos.

Source JANUS
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We know less about how to establish successful
collaborative innovation

• What are the conditions for success for
  developing strong value clusters, and how to work
  with them
• What can we learn from current examples, from
  insight to policy and action
• How could networks of collaborative innovation
  strengthen emerging value clusters, and which
  policies and strategies could help in developing
  such networks
• What is the role of new work and business
  environments to enable and implement the
  concept of collaborative value creation
• How to develop public-private partnerships and
  collaborative agreements (IPR, licensing) for
  effective collaborative innovation
• How to establish a situation of open
  innovation, exploiting innovations across the
  boundaries of a particular form or institute

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Collaborative innovation, two complementary
perspectives
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New economic relationships in the enlarged Europe

• Largely based on direct foreign investment
  establishing local presence, or on outsourcing
  (or nearsourcing) and creation of global supply
  chains
• Local presence because of cost advantage, or
  because of being near an emerging market and
  scarce talent
• Both may contribute to establishing strong value
  clusters, but not neccesarily
• Importance of embedding in local and regional
  economy, establishing dynamic hotspots
• Economic conditions can change, and companies can
  move easily
• Importance of collaborative innovation (e.g.
  research-industry collaboration) to attract
  talent and create and strengthen regional
  hotspots (successful models like TEKES - Finland,
  or INTERREG)

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Case of Nokia-Komárom

• Nokia is investing 200 Million Euro in Komárom
  Industrial park (doubling its mobile phone
  production)
• Key reasons geography, test field status,
  advanced ICT infrastructure, logistics situation
  Komárom, skilled labour force
• Key suppliers are located near, to shorten time
  of delivery and decrease invested capital
• Strong connections between active players
• Economic conditions are changing, strong
  competition China and India
• Worry about local embedding and viability /
  sustainability of the cluster

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Analysing cluster development in a few NMS

• Lithuania a fragile ICT cluster
• Poland an aviation cluster in development
  (Rzeszow)
• Slovenia a strong Transport Logistics Cluster
• Hungary a strong automotive cluster (PANAC)

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Lithuania and the Information Society

• No clear general innovation strategy
• Evidence of increasing popularity of eWork
  especially between SMEs
• E-banking gaining increasing popularity
• In 2004, computers were used in daily business of
  90 of processing manufacture and services sector
  companies
• Slow uptake of electronic transactions among
  households
• Very limited spending on RD, lacking policies to
  guide innovation
• Promising efforts to build networks of supporting
  companies and innovation, lack of angel networks

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ICT, a fragile Lithuanian cluster

• Fast growing ICT market (9.2 in 2005), Baltics
  are second fastest growing ICT market after
  Poland
• Industry dominance of a few large companies,
  large majority of ICT companies is small,
  difficult to speak of an ICT industry
• Consequently, no industrial research
• Linkages universities-companies are missing
• Tendency to keep specialized services within the
  company
• Outsource2Lithuania aimed at uniting Lithuanias
  ICT sector, providing outsourcing services
• Concusion Modest potential to form a cluster

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Poland and the Information Society

• E-Polska general strategy and action plan for
  information society development of Poland
• Regional innovation policies
• Initial industry clusters furniture,
  construction, biopharmaceuticals, electronics and
  IT not yet good examples of IST facilitating
  cooperation among organisations in industry
  clusters
• Aerospace cluster near Rzeszow, attracting
  companies, universities SMEs, co-funded from
  national, EU, US grants
• eWork in initial stages, teleworking not popular
• Priorities access to Internet, industry-academia
  relations building, RD culture, education on
  ICTs
• Large industries are dominant in innovation,
  small companies fighting for survival, dont have
  resources for innovation
• Few good examples of industry-research
  collaboration e.g. IBM/Motorola closely working
  with local universities in Cracow and Gdansk

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Aviation cluster in Poland

• Started 2003, representing 23 companies within
  the region
• Ambition to grow to 100 members
• Research-industry cooperation, also foreign
• Objective to transform the region into one of
  Europes leading aerospace regions
• Conscious effort to establish a Network of
  innovation

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Hungary and the Information Society

• Hungarian Information Society Strategy and action
  plan
• Emphasis on infrastructure and electronic access
  to information, as well as to e-government
• Still very limited uptake of e-work, mainly due
  to availability of infrastructure, data
  protection issues, and attitudes of employers and
  managers
• Active industrial cluster building policy
  supported by government and business
• Pannon automotive cluster
• Pannon wood and furniture cluster
• Promising opportunities for e-work related value
  clusters
• Foreign direct investment in ICT-related markets
  Nokia (mobile telephone), T-Mobile (3G testbed)
  etc

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Automotive cluster in Hungary (PANAC)

• Founded 2000, 67 members, geographic
  concentration in Györ region
• Key automotive companies supporting (Audi, Opel,
  Suzuki, LuK Savaria, Rába etc)
• Government industry collaboration
• Subcontractors visibility, quality requirements
• Automotive Supply Chain management
• Automotive Living Lab

Picture Sandor Móricz)
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Example of collaborative innovationengineering
living lab automotive cluster

• Automotive Living lab Györ
• Related to COSPACES Integrated project (2006
  2009), design engineering workspaces
• Global virtual engineering concept
• Memorandum of Understanding (PANAC COSPACES
  Ministry of Economics)

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CollaborativeInnovation _at_ work

• Cooperation for Innovation between
• COSPACES Integrated project
• PANAC Automotive Cluster
• COMIST project
• VARINEX
• To establish Automotive Living Lab in Györ
• Memorandum signed 5th April 2006

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CORELABS European network of Living Labs

• The overall objective of the CoreLabs CA is to
  achieve a coordination of activities towards the
  establishment of co-creative Living Labs as the
  foundation of a Common European Innovation System
  on several levels.
• To identify, coordinate and share best practices
  in the validation approach of ongoing initiatives
• To measure the impact of Living Lab approach
  within the identified initiatives
• To establish a Living Labs Certificate and
  develop a Roadmap and policy recommendations for
  the widespread adoption of the Living Labs
  concept
• To launch the European Network of Living Labs,
  under the Finnish Presidency of the European Unin
  on 20 November 2006

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Concluding remarks

• Viability and sustainability of value clusters
• Role of collaborative innovation to strengthen
  the cluster
• Creating active linkages within the region,
  rooting in regional business ecosystem
• Open innovation concept
• Promising examples of collaborative innovation
• Collaborative work and business environments
  enable collaborative innovation
• Emerging concept of Living Labs