MCRI Theme I: Social Nature of the Innovation Process SNIP

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MCRI Theme I Social Nature of the Innovation
Process (SNIP)

• Charles H. Davis, Ph.D.
• Faculty of Communication DesignRogers
  Communications Centre
• Ryerson University, Toronto
• Innovation Systems Research Network
• 4 May, 2006

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• Review
• Main hypothesis and research question
• Our starting points regarding the social nature
  of the innovation process
• Challenges and opportunities
• Theory
• Analytical Method
• Practice
• An overview of the SNIP Interview Guide 1.1

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Main hypothesis and research question

• The social characteristics of a city-region have
  now become its principal economic assets
• How do the social characteristics and processes
  of city-regions determine their economic dynamism
  and vitality as centres of innovation and
  creativity?

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Starting points social nature of the innovation
process 1

• Knowledge and learning are central features in
  the process of creation of economic value
• Innovation is social organized and interactive
• The meso-level (region) is the key site of
  innovation because of the importance of proximity
  in exchanges of tacit knowledge

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Starting points social nature of the innovation
process 2

• Institutions shape flows of knowledge
• Institutions may be national (or international,
  regional, or local)
• Local agglomerations have global knowledge
  pipelines
• City-regions are advantaged by their diversity
  and size

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Challenges opportunities SNIP theory 1

• Marshall or Jacobs?
• Marshallian geographical specialization
• Localization economies increase with the number
  of co-located firms
• Proximity favors intra-industry knowledge flows
• Prevailing models such as the Porter Diamond seek
  to describe the structure of geographically
  specialized clusters
• Co-location of suppliers, principals, customers,
  rivals, and supporting institutions favors
  interactive learning and flows of knowledge
• Geographically specialized industry, by
  definition, services external markets

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Challenges opportunities SNIP theory 2

• Marshall or Jacobs?
• Jacobs says that diversity, not specialization,
  provides the critical externality
• Empirical evidence for urbanization economies is
  inconclusive
• But industries cannot trade indiscriminately with
  other industries
• The keys to urbanization economies may be ICTs,
  services, and cultural industries

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Challenges opportunities SNIP theory 3

• Marshall or Jacobs?
• ICTs are general purpose technologies and they
  service all sectors
• Current wave of ICT-enablement is in the service
  and cultural industries, which are highly
  concentrated in urban regions
• Financial services, government, healthcare, media
  and other creative industries

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Challenges opportunities SNIP theory 4

• Marshall or Jacobs?
• Note the importance of localized inter-sectoral
  value creation processes in the Jacobs model
• However, service industries and creative
  industries are also highly concentrated,
  suggesting that Marshallian dynamics and Jacobean
  dynamics may be at play.

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Challenges opportunities SNIP theory 4

• Marshall or Jacobs?
• What are the social processes of innovation in
  the Jacobs model?
• creative industries have particular
  characteristics that may presage coming
  organizational forms in other industries
• Customer experience is the goal (utility is not
  the only value)
• Constant innovation at high risk
• Constant challenge to integrate business and
  creative knowledge
• Cult of youth and cult of the celebrity

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Challenges opportunities SNIP theory 5

• creative industries have particular
  characteristics that may presage coming
  organizational forms in other industries
• Highly concentrated industry and a vast sea of
  contingent labour and micro-enterprises
• Portfolio careers
• Turmoil due to disruption of business models and
  distribution channels by ICTs
• High levels of uncertainty
• Haphazard innovation support system

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Challenges opportunities SNIP theory 6

• The functional specialization hypothesis
  (Duranton Puga)
• ICTs enable business functions to be coordinated
  remotely
• Functions can be located wherever it makes
  business sense to locate them
• Customer service and back office functions are
  located where labor is inexpensive
• Production is located where the economics of
  supply, transportation, and markets dictate
• Executive functions located in major metropolitan
  areas
• Where to locate creative RD functions?
• ICT-mediated linkages can interpreted in terms of
  institutional, cultural, cognitive, or other
  kinds of proximity
• Note dispersed business functions CANNOT be
  tracked via NAICS codes

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Challenges opportunities analytical methods

• How to operationalize these key concepts
• Knowledge and knowledge flows
• Learning
• Creativity
• Maybe also
• Spillover
• Untraded interdependencies

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Challenges opportunities analytical methods

• How to extend our analytical toolkit
• Qualitative research -gt grounded theory?
• Survey research -gt economic performance as the
  dependent variable?
• Social network analysis?
• Other methods (ethnography, cognitive mapping?)

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Challenges opportunities practice

• How can our research help to improve these key
  innovation practices?
• Public innovation support
• Policy planning and coordination
• Education
• Firm-level innovation practices
• Strategy
• Product innovation
• Business development marketing

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Overview of the SNIP interview guide

• This interview guide has 3 sections
• 1) firm-level innovation
• 2) Appendix A firm fact sheet
• 3) Appendix B RD linkages with universities or
  public research organizations

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1) firms

• Location and contact information
• What are the firms main products or services?
• Workforce
• Characteristics of manager
• Characteristics of employees
• Directors, supervisors, professional/technical
  workers, creative workers, administrative
  workers, unskilled workers
• of employees, with university degrees,
  hired in past 3 years, who were recruited from
  outside the city in past 3 years

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1) firms

• Innovation
• revenues from recent products or services
• Challenges faced by most recent product or
  service introduction
• Estimate of expenditures devoted to various
  innovation activities list
• Sources of most advanced technology used by the
  firm
• IP practices
• Licenses from public institutions

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1) firms

• 5. Customers and competition
• location of important customers?
• Sources of competitive advantage top three from
  list of 21 describe what firm has done
• Location of major competitors?
• Intensity of competition locally, nationally,
  internationally?

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1) firms

• 6. Knowledge flows
• 6.1 script please think about 3 firms or other
  innovation players with which your company has
  regular relationships about important matters
  during the past three years
• Of these three, select the one with the MOST
  FREQUENT contacts
• Are the contacts mainly formal or mainly informal
  (describe)
• What is most frequently discussed (from list)
• What type of information is generally exchanged?
  (from mainly unwritten to mainly written
  information)
• Repeat procedure with firms 2 and 3

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1) firms

• Interactions with public RD institutions
• How does partnering fit into firms RD strategy?
• Has the firm worked on any projects with public
  institutions or universities? (If yes, go to
  appendix B)

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Appendix A firm fact sheet

• employment change (3 years)
• Ownership residing in Canada
• 2005 revenues of business unit
• revenue growth (3 years)
• Projected revenue growth, next 3 years
• Market distribution of sales in province,
  Canada, US, other international

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Appendix B RD linkages with universities or
public research organizations

• What types of interaction?
• Who interacts?
• What kinds of exchanges?
• What are most successful methods for transferring
  knowledge and technology to firms?
• Table of benefits to industry partner and to the
  university (list of about 15 possible benefits)

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The end.

• Thank you!
• Questions or comments?