Regional Innovation Support Systems: Recent Trends in Germany and East Asia

Since the beginning of the 1990s, one can observe a clear shift in the aims of regional policy in industrialized countries from reducing regional inequalities to developing endogenous small and medium-sized enterprises (SMEs) and innovation in regions through regional innovation support systems. Innovation support systems are defined as a group of actively cooperating organizations that support the innovativeness of SMEs. An innovation support system consists of all agencies found in three support stages, namely the provision of general information, technological advice and joint R&D projects, between firms (of which technology-following SMEs are the main group), higher education institutes (HEIs) and public research establishments (PREs). Agencies found in these stages try to help to solve innovation problems mainly of technology-following SMEs by either giving them advice themselves or by referring them to other agencies in a further stage of support. The agencies can be mainly supra-nationally, nationally or regionally initiated. This paper aims at comparing these regional innovation support systems in Germany and East Asia, that is Japan and South Korea, both concerning the instruments used, their impact on regional economic development, their level of organizational embeddedness in regions and the ability of regions to coordinate innovation support policies. The main conclusions of the paper are that there are similarities between the regional innovation support systems found in the countries when it comes to policy instruments, but that the countries differ concerning their level of regional embeddedness and the abilities of regions to coordinate innovation support policies. The paper also tentatively concludes that in countries where regions have the ability to coordinate policies into integrative innovation support systems, the impact on regional economic development tend to be larger than in countries where these abilities are lacking, that is where dirigiste and grassroots support systems prevail. One important explanation for the different coordinating abilities lies in the different political-administrative systems found in the studied countries (centralized in South Korea versus federal in Germany). Other factors explaining differences are: a time lag of development policies between countries, differences between the history of supporting SMEs in regions, supra-national support frameworks, the commitment of the political leaders in regions, collective trust and the size of countries.     

New Approaches to Innovation Policy: Some Norwegian Examples

The paper describes and assesses three Norwegian innovation policy tools. The tools cover three different models of strengthening firms' innovation capability, i.e. direct financial support, broker and advisory systems and technology or knowledge centres. The tools include some new elements in innovation policy design, and thus, some elements of good practice. Guidelines for good practice includes an interactive perspective on innovation support, a focus on innovation systems, context sensitivity and a regional focus, learning in the support system and receiver-oriented and proactive working methods.     

Small is not Necessarily Beautiful: An Evaluation of Policy Support for Small and Medium-sized Enterprises in Australia

One of the key strategies of the current Commonwealth government in Australia is to promote a dynamic entrepreneurial culture by improving the business environment for small and medium-sized enterprises (SMEs). This paper evaluates the contribution of SMEs to innovation and employment in Australia and reviews the international evidence on the value of SMEs. It concludes that a very small percentage of SMEs are responsible for most of the employment generation and innovation in the small-firm sector. The policy implication is that general deregulatory measures designed to support SMEs as a generic class are likely to create an environment within which low-quality, low-wage employment is generated in SMEs with little future. Instead, the sectoral composition of industrial activity and the social structures and relationships within which firms are embedded require greater policy attention.     

Creating Critical Mass of Research Excellence in the Region: The Case of Scottish Research Pooling Initiatives

This article examines the recent development of, and policy rationale for “research pooling” initiatives in Scotland. Research pooling initiatives have been started with financial support from the Scottish Funding Council in order to form inter-organizational “international critical mass” of research excellence at universities at the regional level. This article examines the development of university cooperations at the regional level as vehicles for obtaining “strategic resources”. Then the “multi-level governance” structure of research pooling is explored in light of the future development of a Scottish regional innovation system (RIS). Particular attention is drawn to challenges concerning knowledge transfer, which is critical in integrating research pooling initiatives in the development of RIS in Scotland.     

Renewable Energy Innovation and Governance in Wales: A Regional Innovation System Approach

This paper draws on research commissioned to investigate the regional innovation system of Wales on green innovation, focusing on the renewable energy sub-sectors of wind, solar and biomass. It shows how many innovative firms operate within regional networks, cooperating and interacting not only with other firms such as suppliers, customers and competitors, but also with research and technology resource organizations, innovation support agencies, venture capital funds, and local and regional government bodies. The paper argues that within the region there is the presence of various renewable energy production platforms, usually based on core technologies (wind, solar, biomass, marine, etc.) at different levels of development. They involve a mix of established energy utilities and new sustainable energy businesses that are positioned at different levels within the renewable energy supply chain. The research shows that the regional government is playing an important role in supporting the renewable energy industry; nevertheless, more needs to be done to facilitate planning control, provide skills and create new demands for renewable energy that will further foster business growth and further strengthen the existing manufacturing base and innovation in Wales. The paper identifies some weaknesses in the Welsh energy innovation system, not least that energy is not a devolved responsibility and it argues that there is some scope for the Welsh Assembly Government to further investigate gaps within the green innovation supply chain and act on strengthening regional capabilities within the industry but also to support and investigate further opportunities for inward investment.     

Extra-regional linkages through MNCs in organizationally thick and specialized RISs: a source of new path development?

ABSTRACT

This paper explores how global innovation networks (GIN) within multinational companies (MNCs) act as extra-regional sources for path development in a regional innovation system (RIS) specializing in the oil and gas sector. We combine the literature on intra-firm knowledge dynamics in MNCs’ GIN with the literature on RISs to better understand their interrelatedness and their dynamics. Based on interviews with 15 MNCs located in the south-west of Norway, we find that firms are highly dependent on competence throughout the MNCs’ entire networks, as well as interaction with the overall RIS. The findings expose that MNCs’ GINs can act as extra-regional sources for path ‘extension’ in thick and specialized RISs through intra-firm mobility, observation and sharing of routines and best practice, mainly resulting in incremental innovations. We find some signs of potential path ‘renewal’, including radical innovation ideas. However, there are hampering factors linked to strong internal competition for innovation projects, pressure for local profitability and ownership motivation. At the level of RISs, new initiatives going beyond existing cluster initiatives and specializations need support.     

Putting Porter into Practice? Practices of Regional Cluster Building: Evidence from Sweden

In the last decade there has been an increased interest in the cluster approach as a tool for boosting regional competitiveness. In this article practices and processes of regional cluster building in Sweden are examined in order to better understand the key traits that seem to be common to successful regional cluster initiatives. It is argued that regional cluster building may be formed through long running policy processes that are crucially constituted by public and private actors' collective vision of what cluster policy involves and what a cluster can look like. Results from a study of 13 cluster initiatives in Sweden are presented. Out of these, four key examples are presented in detail to illustrate four distinct 'models' of cluster approaches that emerged: (a) industry-led initiatives to build competitiveness and competence within an existing base; (b) top-down public policy exercises in brand-building; (c) visionary projects to produce an industry cluster from 'thin air'; (d) small scale, geographically dispersed, natural resource based, temporal clusters that link or dip into global rather than national systems, sources of innovation and competitive advantage. The article closes with the presentation of a checklist of some common elements that successful cluster initiatives in Sweden have shared. It is hoped that they may trigger further research or be useful to policy-makers working in the area. It is concluded that though many questions and problems persist over the use of the cluster-approach it can be a useful tool for regional development.     

Innovative Activity in SMEs and Rural Economic Development: Some Evidence from England

Recent writings on the factors influencing the competitiveness of regional and local economies have emphasized the importance of innovation in SMEs. This paper discusses the findings of a study of the innovation process in a sample of SMEs located in rural environments. Adopting a broad, evolutionary view of the innovation process, the study highlights important sectoral variations using a multidimensional index of innovation. The way in which innovation is achieved is found to be shaped by various aspects of the rural environment, but relatively few firms are constrained by their rural location. Nor does the lack of local networking opportunities appear to hold back innovation in the more active SMEs. In conclusion, the most innovative firms are shown to make an important contribution to rural economies in terms of external income generation and employment generation.     

Regional technology policy and factors shaping local innovation networks in small German cities1

Local innovation networks are considered to be important to innovation and technological change and to growth prospects of regions and cities in Germany. When analysing the local (or regional) innovation system, one should consequently not only investigate horizontal and vertical relations among firms but also the contacts with universities and other research institutions. Furthermore, the role of government agencies and interest groups that provide financial support as well as commercial and technical information should also be taken into account. However, the review of relevant theoretical and empirical investigations related to the German experience shows that such innovation and R&D cooperation networks appear to be less significant than expected. In general various regional technology policy measures adopted in German states (the provision of research infrastructure, establishment of technology centres, innovative small and medium sized enterprises support programmes, etc.) have been more successful in economically better-off large cities than in the rural areas. Apart from offering a critical review of relevant theoretical and empirical research, this study introduces the present regional technology and R&D promotion policies in German states and examines the local innovation systems, taking Landshut as an example.     

Technology transfer agencies and regional economic development

Many regions in Western Europe have set up technology transfer agencies in order to support endogenous potential by encouraging the diffusion of new technologies from universities and large firms to small and medium‐sized enterprises (SMEs). However, many studies have shown that business partners such as customers and suppliers are the most important partners for the stimulation of the innovativeness of SMEs. Universities and transfer agencies are given a very low rank in these studies. These results have led to doubts about the usefulness of these institutions for regional economic development. In order to increase transparency, streamlining of the agencies involved is necessary so that there are fewer actors and more cooperation between them. To be able to reach technology‐following SMEs, at least one transfer organization in every region should employ senior engineers with extensive business experience to visit firms frequently (proactive) to help them come up with some technological issues (demand‐oriented). These agencies need long‐term financial backing so as to provide free advice to technology‐following SMEs.     

When regional innovation policies meet policy rationales and evidence: a plea for policy analysis

In spite of recent advancements regarding regional innovation policy rationales and evidence, there are few analyses about the actual features of existing regional innovation policies. Nevertheless, a policy analysis perspective is important in order to recognize their distinctive patterns across regions, and to understand how rationales and evidence can be translated into policy-making. To this purpose, this paper develops a framework to study the extent to which regional innovation policies have changed during the past few years. Since the mid-2000s, there has been an important development of innovation policy rationales, advocating for more specialization; likewise, greater data availability at the regional level has allowed more sophisticated assessment of innovation performance. Finally, the crisis since 2008 has had ravaging effects in some regions, with job losses and severe economic sluggishness. Therefore, it is reasonable to expect transforming dynamics in regional innovation policies. Against this backdrop, the paper compares the institutional frameworks and budgetary priorities of four Spanish regions during the period 2001–2014: Catalonia, the Basque Country, Galicia and Andalusia. In so doing, it aims at studying the extent to which regional governments have readily addressed past and new challenges related to their regional innovation system, and if so, how.     

The Emilian model: Institutional challenges

The paper reviews recent developments in the industrial districts of Emilia‐Romagna in Italy. It notes the key question as to whether the enterprise support system for SMEs, that has proved of such value to local and global competitiveness, continues to work as well as it did in the past. This is important because the nature of competition has changed, placing an even greater stress on innovation and learning. Of particular interest is whether the Emilian model enables networks of firms to shift their trajectories from established to new industrial objectwes. New initiatives, originating from the hitherto less successful parts of the Emilian economy are described and conclusions drawn.     

Determinants of the Uneven Regional Participation of Firms in European Technology Programmes. The 'Low R&D Trap'

Technology is of key importance to the growth of regional firms and economies. Research has shown the association between low technology development or take-up and regional disparities. Hence technology policy is moving closer to the heart of regional policies. European innovation programmes are intended to involve firms, large and small, in international technology research and development networks. The paper focuses on the involvement of Spanish firms in such programmes. Participation tends to be low if business R&D, presence of large firms, and the development of regional innovation systems are also low. Creation of R&D infrastructure through the Structural Funds has now to be prioritized at EU level and also define a new scheme of sectoral priorities in order to support R&D innovation activities in fields diverse from high-tech, if regions are to escape the 'low R&D trap'.     

Finnish Mosaic of Regional Innovation System—Assessment of Thematic Regional Innovation Platforms Based on Related Variety

The emphasis of Finnish innovation policy has very much been on promoting actions that can be labelled as science–technology–innovation mode of innovation, which is based on the production and use of codified scientific and technical knowledge. However, recent research has emphasized also the importance of more experienced-based mode of learning and innovation, which can be labelled as doing–using–interacting mode of innovation. This study is an attempt to shed light on the current development phase of Finnish innovation system facing the new paradigm. The Finnish innovation system is seen as a mosaic of regional innovation systems. The regional innovation systems are analysed through a developed framework including elements of theories of innovation systems and cluster theories as well as two recent national-level strategy documents. One of the main concepts of the study is related variety in regional innovation platforms. This study also aims at creating a pragmatic framework for describing related variety at the regional level by combining aspects from two theoretical frameworks. The empirical data were gathered in a series of workshops in all the Finnish regions during the year 2008. The result maps Finnish thematic regional innovation platforms fuelled by related variety.     

Innovation,R&D and Technology Transfer: Policies towards a Regional Innovation System. The Case of Lombardy

The evolution of Lombardy's economic structure and international position led the regional government to build up a network of public and private stakeholders in the effort of promoting the creation of new knowledge and supporting innovation at local level. In this article a technology picture of the region and the main policy actions undertaken in recent years in Lombardy to promote a nest of linkages within actors, moving along the approach of regional innovation systems are presented.     

European coherence and regional policy? A Finnish perspective on the observed and reported territorial impacts of EU research and development policies

The present article focuses on recent analysis on the regional impacts of research and development (R&D) actions within the European Union (EU). Focus will be on exploring a report produced by the European Spatial Observation Network (ESPON), and essential viewpoints of the report will be studied from the Finnish perspective. The operating framework is based on social scientific methodology. The conclusions are based on the current evolution of the Finnish innovation and technology policy. Also thematic areas for further research programming and information needs are proposed.     

Canada's Ocean Supercluster initiative: A national policy in regional clothing?

Since the late 1980s, there has been no explicit regional policy in Canada. Indirectly, though, equalization payments, industrial policies, as well as regional agencies encouraging the adoption of federal industrial and innovation policies, impact regional economies. In 2017, the federal government appeared to alter its approach: the Supercluster initiative was announced, drawing upon the idea that localized networks of interrelated firms can generate innovation and local development. In this paper, we discuss the mechanisms through which spatially focused industrial innovation policy can lead to regional development. We then focus on Canada's Ocean Supercluster initiative. The question we address is as follows: to what extent can this initiative (and, more widely, Canada's Supercluster policy) be understood as a regional development strategy driven by a coherent rationale for regional intervention? Apart from the fact that each Supercluster focuses on a pre-existing core of firms located within a region, there is little evidence that the Supercluster initiative has regional development objectives or impacts.     

Regional networks of small and medium sized enterprises: evidence from the Metropolitan Area of Ottawa in Canada1

Innovation is currently seen as a process which results from various interactions among different actors. Recent theories of innovation emphasize clusters and geographical proximity as loci of knowledge, development and exchange, critical to higher levels of innovation and regional growth. As a consequence, there is a territorial dimension to innovation. This article investigates the innovation activities and networking of 53 small and medium sized enterprises (SMEs) in Ottawa, Canada. Taking its point of departure from the proliferating literature on the localized nature of innovation processes, the article sets out to answer three empirical questions: How intensively are SMEs engaging in innovation activities? To what extent do they interact during innovation process activities? What is the relevance of spatial proximity in networking, and what is the relative importance of localized cooperation as compared to non‐localized cooperation. The results revealed SMEs rely as much on external networks of customers and suppliers, as they do on ones based in their own region, and that these are considerably more important, than other potential sources of ideas, to the innovation process within the firm.     

Piloting Regional Innovation or Much Ado about Nothing?—Evaluating the R&D Policy Initiative of Nordland,Norway

This article evaluates the results of almost a decade of experience with regional R&D development and implementation for enhanced innovation in the county of Nordland, Norway. Following a 2002 national devolution initiative, the county of Nordland was the first among Norwegian counties to coin and implement a distinct R&D policy for business-related innovation and development. This was done by setting up a broad regional partnership, framing a regional strategy and by coordinating substantial budgetary resources to implement the strategy. The evaluation describes the results of this process as ambiguous. This article looks at the process from three perspectives. First, we look at the organizational side of how the policy formation and implementation processes have performed. Second, we evaluate the business community response to the policy initiative to see whether any signs of altered behaviour can be found. Third, we look at how the partnership dynamic can explain policy outcomes. Theoretically and policy-wise we then discuss how our findings contribute to new insights in the field of analysing and generating regional innovation policy.     

Balancing Competitiveness and Cohesion in Regional Innovation Policy: The Case of Finland

This article sheds light on the relationship and tension between competitiveness and cohesion as undercurrents and continuous causes of controversies in the regional innovation policy. The in-built problems in regional innovation policy that emerge because this policy is essentially a synthesis of different policies with different rationales are contemplated. Empirically, this article outlines the main phases of evolution and drivers of development in the Finnish regional innovation policy. It also discusses the recent developments from the perspective of regional (and national) competitiveness and cohesion nexus. These empirical outlines are then used to feed the views back into the discussion on a more theoretical level.