Jir

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Regional innovation strategies - implications of
European experience for new and future member
states Zagreb, June 2008

• Jirí Blažek
• Dept. of Social Geography and Regional
  Development,
• Faculty of Science,
• Charles University in Prague,
• e-mail blazek_at_natur.cuni.cz

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Structure of presentation

• 1) Analysis of current situation in the sphere of
  innovation policies
• a) on European level
• b) on a national level (Czech Republic)
• c) on a regional level (case of city-region of
  Prague and its RIS)
• 2) Possible implications of Constructing Regional
  Advantage project
• 3) Conclusions and possible solutions

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European context for innovation

• The failure of Lisbon strategy to catch up with
  the US in innovation and technology creation is
  well known the gap between USA and EU even
  widened
• Five priority objectives were proposed for public
  action to encourage an effective, pan-European
  innovation system
• (a) coherent innovation policies
• (b) a regulatory framework conducive to
  innovation
• (c) encouragement for the creation and growth of
  innovative enterprises
• (d) improvement of key interfaces in the
  innovation system
• (e) a society open to innovation

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Main activities on the EU level supporting
innovations

• linking the EU cohesion policy and Lisbon
  strategy (allocation of at least 60 of fin.
  resources in programming period 2007-2013 on
  Lisbon priorities compulsory for EU-15,
  recommended for EU-10)
• 2) doubling of financial resources on EU ST in
  new financial perspective

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Main EU activities supporting innovations on
regional level

• Creation of innovation extremely regionally
  concentrated (share of Czech Rep. on patents in
  EPO just 0,07!)
• Therefore, EC supports
• 1) increase RD expenditure in less successful
  regions
• 2) creation of regional innovation systems
• Initiatives European Research Area, Innovating
  Regions of Europe , Regions of Knowledge, etc.
  and cooperation of regions in this sphere
• Inspiration for particular projects
  http//cordis.europa.eu/era/regions.htm

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Regional context for innovation

• M. Porter (2000) What matters is not the
  industrial structure, but the position of the
  firms in the region within the particular
  industrial branch, i.e. low-road vs high road
  strategy of competitiveness (e.g. production of
  shoes and textile in Bavaria)
• In current global economy more and more important
  are local/regional factors of competitiveness as
  globalisation eliminates advantages gained from
  mobile sources
• 2 types of knowledge are distinguished codified
  and tacit difficult to transfer and/or imitate
• Tacit knowledge is the key source of
  competitiveness in current world

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Regional context for innovation

• Local/regional factors of competitiveness
  local know-how, particular relations to suppliers
  and customers, knowledge of regional market,
  level of trust, access to local technologies,
  flexibility given by existence of a key supplier,
  cultural context and atmosphere within the
  region

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Regional innovation systems

• Aim identification and stimulation of
  cooperation of key relevant actors, reflecting
  tradition, regional resources, problems,
  opportunities and designing a regional innovation
  strategy
• Several different types of regional innovation
  systems
• (grassroots, dirigiste, .)
• regional innovation strategy identification of
  barriers and of a potential (personalities,
  research teams), clear commitment to specific
  tasks and time schedule

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National context for innovations in the Czech
Republic (1)

• The overall lagging of NMSs in innovation
  creation and implementation is well known
• The current unsatisfactory situation is a result
  of several key factors
• Fundamental among them was the separation of RD
  in communist countries from the democratic world
  which lasted for 4 decades
• But also many other factors like a strict
  separation of basic research pursued in
  Institutes of the Czech Academy of Sciences and
  in Universities which were not expected to come
  up with the results that would be commercialized

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National context for innovations in the Czech
Republic (2)

• The Czech Government has started to deal with
  innovations only recently, also due to European
  pressure connected to Lisbon strategy
• Therefore, recently, several governmental
  materials dealing more or less explicitly with
  innovations were elaborated
• Especially The National Innovation Policy was
  adopted by the Czech Government in July 2005
• Consequently, on the basis of preparation of
  several strategic documents there is a growing
  agreement among experts and decision-makers on
  key weaknesses of Czech innovation system

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Key weaknesses of the Czech innovation system (1)

• insufficient links between public research
  institutes and businesses, poor opportunities for
  mobility between industry and academia and even
  insufficient mutual awareness (large RD foreign
  investor in Brno with whom could we cooperate
  in the region???)
• overcomplicated and improper general legislative
  framework (including tax system) plus poor law
  enforcement
• low share of university educated people (only 60
  of EU average), low share of RD employees (ca.
  half of EU avg.), low share of GDP allocated to
  RD by public and private sector

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Key weaknesses of the Czech innovation system (2)

• insufficient evaluation of results of public RD
  institutions with clear implications for their
  financing
• missing financial instruments conductive to
  innovations (venture capital funds etc.)
• unclear competence over innovation policy among
  governmental bodies (20 bodies involved)
• insufficient marketing of both options opened by
  the existing governmental and EU support
  programmes for innovative actors and of the
  results of innovative processes (innovations,
  patents)
• Insufficient evaluation of results of RD
  institutions and projects with clear implications
  for future financing (completely new system of
  financing of science including universities as of
  2010).

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Bohemian Regional Innovation Strategy (BRIS) -
developed for the City of Prague

• Profile of the city
• - 1,2 mil. inhabitants, 156 European avg. of
  GDP per capita, unemployment rate 2
• - The city is relatively attractive for foreign
  investors (new arrivals DHL, Accenture,
  Siemens).
• - Prague has a highly skilled workforce. The
  share of the total population holding a
  university degree is almost 20 (twice the
  national average)
• - In Prague, there are about 80,000 university
  students, 40 Institutes of the Academy of
  Sciences and 50 other research institutes
• Consequently, about a half of the
  scientific and research potential of the Czech
  Republic is concentrated in Prague

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Bohemian RIS

• The BRIS has been elaborated on the initiative of
  Technology Centre of Czech Academy of Science
  which wanted to use the opportunity offered by
  the EU funding available for elaboration of
  regional innovation strategies
• Therefore, its clearly product driven, not
  demand driven
• In order to identify the requirements and
  specific features of Prague, an extensive
  field-study at 490 enterprises and at 60 research
  organizations in the field of innovation
  generation was conducted

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Key priorities/problems to be addressed from the
city (regional) level

• Strengthening the links between public research
  institutions, private firms and other actors
  relevant for innovations (bottom up approach)
• Establishment of links among research branches of
  MNCs located in Prague with the endogenous firms
  as up to 60 of RD private expenditures are
  provided by foreign firms in the Czech Rep.
• Marketing of both BRIS and innovations created in
  Prague

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Key weaknesses of BRIS (1)

• Not sufficiently developed analytical part, there
  is no serious attempt to identify the sectors
  with the largest innovation potential
• Missing clear priorities, the strategy is to
  improve everything
• Completely missing link to budget of City of
  Prague
• Excessive focus on SMEs despite the fact that
  most relevant innovative actors are (research)
  branches of large foreign firms

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Key weaknesses of BRIS (2)

• Unjustified focus was put on building of a new
  innovation infrastructure (to establish Prague
  RDA, centres of excellence, science and
  technology park, incubators for new enterprises)
  instead of forcing the existing institutions to
  fulfil their role more effectively
• Improper selection of priority areas for support
  (for example, among the priority projects is
  support to Pragues educational gastronomic
  cluster which potential role in innovations is
  rather dubious)
• Missing clear responsibility (and time-schedule)
  for implementation of actions and for monitoring

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Key concepts of Constructing Regional Advantage
project (1)

• Current thinking on approaches towards
  stimulation of innovative potential of the
  regions has been recently elaborated by CRA
  project (DG Research)
• Key concepts of CRA project
• 1) regional advantage can be actively
  constructed/designed which implies a new and more
  dynamic role for public sector (including
  universities)
• 2) region is a proper platform for mobilising
  innovation creation as its invention is a highly
  localised process, but local buzz should be
  complemented by non-local connections
• 3) innovation, talent formation attraction and
  entrepreneurship are the key components to
  construct regional advantage (P.Cooke)

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Key concepts of CRA project (2)

• 4) the 4 key dimensions for assessing the regions
  are (P. Laredo)
• - institutional - governance capabilities,
  policy path dependency,
• - economic - infrastructure, activity/sector mix
• - reg. knowledge base higher education,
  research institutes, firms capabilities
• -connectivity- collaborative patterns,
  intermediating structures, mobility of LF,
  spin-offs)
• 5) away from one size fits all to provision of
  methodologies instead of recipes (A. Piccaluga),
  as copying of best practices is impossible when
  it concerns regional-specific assets that are
  soft and result of long histories (R. Boschma).
  Therefore, approaches and tools might and should
  differ for different regions

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Some implications of CRA project for BRIS
(Prague) (1)

• Analytical part of BRIS is rather of traditional
  nature without focusing on softer issues related
  to connectivity dimension
• i.e. missing analysis of interactions among the
  key actors, missing identification of potential
  leaders, no answer why some of existing
  institutions are not functioning properly, what
  are the routines that prevent standard support
  mechanisms to operate effectively, etc.
• Summarising in other words focus "not only on
  benchmarking but also on better knowing and
  understanding ourselves including the question
  where are right people?
• Moreover, issues like development of talents and
  development of entrepreneurship capabilities and
  talent retention or even talent attraction were
  either not elaborated at all or only partially

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CRA implications (2)

• Using the 4 criteria outlined above
  (institutional, economic, reg. knowledge base,
  and connectivity) it seems from the before
  mentioned facts that Pragues main weakness is
  the lack of connectivity among relevant actors
• Therefore, from this point of view, perhaps the
  largest merit of elaboration of BRIS is
  initiation of a mutual communication among
  relevant partners and putting the issue of
  innovations on the agenda
• In this context one has to regret, that the main
  part of the BRIS survey among Prague's innovative
  firms and research institutes has been outsourced
  
• so a unique opportunity for using this as an
  instrument for building a consensus and
  developing a partnership with key players and
  esp. with the business community was missed

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CRA implications (3)

• A need to shift the focus of public support from
  the institutions to the projects aiming at
  delivering the desirable changes
• (as in the Czech Republic, public support is
  often oriented to institutions with correct
  name like Science and Technology Park or SMEs
  incubator instead of on support of desirable
  activities leading to measurable changes)
• In addition, a clear need for instruments that
  would help the firms to acquire new routines, and
  esp. enhancement of their capability to
  articulate their need for innovation (B. Asheim)

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3) Conclusions (1)

• Relatively modern conception of National
  Innovation Policy and of BRIS versus real
  implementation
• Many problems of systemic nature (improper
  legislative framework but also soft factors like
  inclination towards economic individualism or
  even egocentrism (P. Cooke) reflecting low
  level of trust and of mutual respect among key
  actors and in society in general
• Positive development is a plan of Prague
  authorities to integrate BRIS into the city
  Strategic Plan which would guarantee that issues
  related to innovations would be put into the
  mainstream policy and as such regularly monitored
  
• Another positive feature of BRIS is the fact that
  this document is coherent with Programming
  Documents financed by EU SFs

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Conclusions (2)

• For example, with the support from SFs, Charles
  University established its Centre for Transfer
  of Technologies and Knowledge which was among
  the priority projects identified by BRIS
• Moreover, there is continuing enthusiasm of key
  personnel of Technology Centre of Academy of
  Science which resulted in obtaining the support
  (within the EU 6. FP) for follow up project
  Evaluation of impacts of regional innovation
  strategy
• This helps to keep the BRIS on the agenda of
  decision-makers as well as of other relevant
  actors
• Another significant contribution of BRIS is the
  fact that it helped to stimulate and inspire the
  debate about innovation policy on a national
  level
• Therefore, BRIS is a learning exercise aiming at
  enhancement of institutional capacity to cope
  with change

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Possible solutions (1)

• In principle, there are just 2 basic types of
  positive solutions for regions lagging in
  innovation creation
• 1) to enhance innovation creation (highly
  demanding both financially and for human
  resources, in many spheres unrealistic, requires
  high concentration of resources within the given
  state)
• 2) to enhance the capacity for creation of less
  demanding innovations and esp. strengthening the
  capacity for dealing with already developed
  innovations
• In both cases the concept of Triple Helix might
  be useful

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Government/public administration
Triple Helix (B.Asheim, 2006)
Universities
Firms
Innovation system
Narrow definition of RD system
Broader definition Human and social capital,
clients
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Possible solutions (2)

• Each of the actors is having its role
• Jointly they should create suitable conditions
• - Quality human resources (qualification,
  motivation)
• - Legislation
• - Infrastructure (not only transport but also
  access to information, databases,
  libraries).
• - Financial instruments for innovations
• - And atmosphere in the region (Cambridge x
  ..) requires respected leader, personalities