Empirical implementation of the concept of National System of Innovation

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Empirical implementation of the concept of
National System of Innovation

• Professor Sunil Mani
• Planning Commission Chair Professor in
  Development Economics
• Centre for Development Studies
• Trivandrum, Kerala, India
• E-mail Mani_at_cds.ac.in

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Outline

• Main purpose of this exercise
• Measuring the distance which developing countries
  have to travel from the technology frontier
• The systemic perspective
• Empirical implementation of the systems
  perspective
• Defining the core of the system
• Gathering data on the innovative activities of
  the core
• Four critical issues in empirical implementation

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• Purpose of the exercise is
• to explore the possibility of using the National
  Systems of Innovation (NSI) perspective for
  designing innovation policy instruments
• Assumption Adoption of an NSI perspective to
  the generation and diffusion of innovations, can
  enhance innovation, learning and technological
  dynamism of developing countries

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How distant are the developing from the
technology frontier ? Case of agricultural
research
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How distant are the developing countries from the
technology frontier ? Case of Industrial research
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The systemic perspective

• Research on national systems of innovation
  emerged at the end of the 1980s when Christopher
  Freeman Richard Nelson, Bengt-Ake Lundvall
  collaboratively researched into the existence of
  and nuances across various systems
• The consensus is that the term NSI has been
  coined by the research work by Christopher
  Freeman (1987)
• The systemic perspective focuses on the
  collection of institutions and instruments that
  together interact to generate and diffuse new
  products and processes within a nations economy
  
• By applying this framework, policy makers could
  identify systemic failures that arise due to lack
  of concordance between various economic agents
  that leads to reduction of innovations within an
  economy. This can then be corrected by applying
  appropriate public policy instruments
• So the utility of this framework, crucially,
  depends on its empirical implementation.
  Otherwise the application of this framework will
  only describe the institutions and instruments
  that contribute to innovations in an economy and

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Critical issues in empirical implementation

• Following Lundvall (2007), it is very essential
  to delineate the core of an NSI
• The core consist of business enterprises
• So to design appropriate policy instruments for
  enhancing the innovative activities of business
  enterprises require detailed information about
  what is going on within it from the innovation
  point of view.
• This is really hard to come by especially in the
  context of developing countries .

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Empirical implementation of NSI

• The following steps are required
• Step 1 Identify the core of an NSI
• Step 2 Find out what goes on within the core in
  terms of innovative activity
• Step 3 Identify those key innovation activities
  and expenditures and
• Step 4 Design public innovation policy
  instruments to stimulate those innovation
  generating activities.

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Structure of performance of RD in select
developing countries as a proxy for identifying
the core of an NSI
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In specific terms we require answers to at least
three questions

• Routes through which business enterprises
  innovate especially the non-RD routes
• Source of information on innovation to the
  innovating business enterprise
• Factors constraining or hampering innovative
  activity within enterprises
• The answers to these questions are available in
  innovation surveys

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Diffusion of innovation surveys across developing
countries
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Three developing country experiences wrt
innovation surveys
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The Four Critical Issues wrt Innovation Surveys
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What have learnt from innovations surveys done in
a number of countries ?

• From the innovations surveys done in Europe and
  in Brazil, it is seen that intramural RD is
  still very important as a form of innovation
  expenditure, acquisition of capital goods is
  another important conduit
• Innovating business enterprises obtain
  information on innovation from within the
  enterprise itself or from clients and suppliers
• Availability of finance is one of the important
  factors hampering innovations although only a
  small proportion of the innovating firms have
  received financial support of any kind from the
  government.

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Conclusions

• To use the systems of innovation perspective
  requires detailed information about the nature of
  innovation that goes on within business
  enterprises
• Innovation surveys is one possible way of
  securing these data- that too in an
  internationally compliant way.
• However innovation surveys does confront us with
  some practical difficulties
• There is need to increase response rates to at
  least 50 per cent. Combining the innovation
  survey as part of other mandatory surveys may do
  the trick as in the case of France, Norway and
  Portugal for instance
• Care needs to be placed while tabulating and
  interpreting the data on innovation activity
  expenditures. Age of the unit need to be taken
  explicitly into account
• Results of innovation surveys must feed into
  public policy making. Systemic failures must be
  detected and
• Time series data on innovation activity and
  expenditure must be developed.

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References

• Freeman, C (1987), Technology and Economic
  Performance Lessons from Japan, London Pinter
• Lundvall, Bengt-Ake (2007), Innovation System
  Research , Where it came from and where it might
  go, Globelics Working Paper Series 1,
  http//dcsh.xoc.uam.mx/eii/globelicswp/wpg0701.pdf
  

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• Thank You