Regional Innovation Policy and Innovative Behaviour: Looking for Additional Effects

This paper aims to evaluate the additionality of innovation policy in terms of innovative behaviours at the regional level. Innovative behaviours are identified both within and across firm and regional boundaries. The role of policy is evaluated for a sample of firms in the Italian region of Emilia–Romagna (ER), exploiting an original, survey-based data set. Propensity score matching is applied to investigate the effects of an innovation subsidy. Funded firms are found to be more likely to upgrade their competencies, compared with similar non-subsidized firms. On the other hand, in most cases, innovation cooperation with other business partners within or outside the region is not significantly affected by policy. Ultimately, the investigated innovation policy in the ER region seems to show what might be termed “cognitive capacity additionality”, rather than “network additionality”.     

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.     

Combined Innovation Policy: Linking Scientific and Practical Knowledge in Innovation Systems

New research indicates that firms combining the science-based STI (Science, Technology, Innovation) and the experience-based DUI (Doing, Using, Interacting) modes of innovation are more efficient when it comes to improving innovation capacity and competitiveness. With regard to innovation policy, the STI mode calls for a supply-driven policy, typically aimed to commercialize research results. The DUI mode suggests a demand-driven policy approach, such as supporting the development of new products or services to specific markets. This article analyses how the two types of innovation policies and the two innovation modes can be combined in regional innovation systems (RISs). The analysis builds on studies of the food industry and related knowledge organizations in two counties, Rogaland County (Norway) and Skåne County (Sweden), and two policy initiatives (NCE Culinology and Skåne Food Innovation Network) aimed at strengthening the innovative capability of the RISs. The analysis indicates that policies aimed to link science- and user-driven innovation activity should focus on building absorptive capacity of DUI firms (e.g. through increased scientific competence) and implementation capacity of STI firms (e.g. through increased market and process competence).     

Innovations, Competitiveness and Local Embeddedness: A Study of Machinery Producers in Sweden

This paper is about technological relations and firm performance in the Swedish machinery industry. Taking its point of departure in the proliferating literature on the localized nature of learning and innovation processes, the paper sets out to answer three empirical questions: To what extent are firms integrated in localized production systems based on buyer-supplier relations? At what geographical level–local/regional, national or international–are the most important technological relations found? Is there a correlation between localized technological relations and the technological performance of firms? The results indicate that few firms display localized buyer-supplier relations. Rather, the industry is highly internationalized, with the most important customers and competitors located outside Sweden. In terms of technologically important relations, the domestic arena seems to be more important. The majority of the most important technological relations link the machinery producers to other actors in Sweden. Three out of four firms may be classified as predominantly local/regional or national in their technological relations, or technology profile. This survey therefore supports the notion that there exists both local/regional and national innovation systems. Finally, however, despite the fact that most firms are fairly locally embedded in their technology relations, there is no evidence that such embeddedness shows up as superior firm performance, in terms of technology level or innovative capacity.     

Intra- and inter-regional knowledge spillovers: Evidence from European regions

Is the knowledge creation process linear or characterized by feedback relations among actors involved in the regional innovation system? How can the innovation process of ‘lagging’ regions be strengthened? What is the role and extent of inter-regional knowledge spillovers? The paper aims at providing satisfactory answers in investigating a knowledge production function framework adapted to the specific questions and which is tested on an extended sample of European regions. On the basis of the results, concrete policy measures are derived aiming at upgrading the knowledge creation capacity of European regions.     

SMEs and Their Peripheral Innovation Environment: Reflections from a Finnish Case

As it has now been widely argued, innovation is ever more seldom the product of isolated firms but usually requires a combination of multiple technologies, skills and competences, part of which have to be acquired from outside the boundaries of the innovating firm. As the literature on regional systems of innovation and other territorial innovation models suggests, the region is the most appropriate spatial level for investigating and understanding the nature of firms’ external knowledge acquisition in their innovation processes, as well as for identifying the critical actors and factors contributing to them. Unlike the majority of studies focusing on the innovation activities of firms at the regional level, this paper focuses not on the actual importance of different location factors, but on the perceptions of small- and medium-sized firms entrepreneurs of the quality of different factors in their regional innovation environment. By identifying differences between the perceptions of innovative and less-innovative firms, this study contributes to the literature on innovation as a regional-level phenomenon, and also tentatively puts forward some managerial and policy implications, as well as suggestions for further research.     

Governance,Policy Innovation,and Local Economic Development in North Carolina

This article examines the extent to which local governments in North Carolina embrace innovation in their economic development activities. The study makes a distinctive theoretical contribution by examining the relationship between innovation in how economic development policies are administered and implemented (using concepts associated with governance and NPM), and innovation in what is substantively done (policy innovation). An analysis of the results from a statewide survey of local governments in North Carolina finds that certain governance/management variables are significant determinants of economic development policy innovation. An implication of this finding is that new ways of doing economic development may go hand‐in‐hand with new ways of governing and managing. Many of the governance/management variables are also positively associated with the use of a greater number of traditional economic development strategies and tools. This suggests that local governments may find it helpful to be innovative in how they implement economic development irrespective of the substantive policy orientation of particular strategies and tools.     

The Creative Industries,Creative Occupations and Innovation in London

London is a global hub of the creative industries. These industries are seen as both innovative in themselves and an input in innovation processes in other sectors. Yet few studies have tested these relationships. This article investigates these issues using large-scale survey data for London. Using four measures of product and process innovation, we find no evidence that London's creative industries are more innovative than other sectors. Yet, individuals doing creative occupations in other sectors are a robust driver of product innovation in London's firms. The results suggest that occupations performed in London may be an important driver of product innovation in the city, and firms in other sectors may use creative occupations to develop new products in the capital. This finding is supportive of policies attempting to stimulate the creative industries by integrating creative occupations into firms across the whole economy.     

Oslo: In What Way an Innovative City?

The article analyses to which extent and in what way the Oslo region may be considered as an innovative and dynamic city in the Norwegian context. Although the European Union Community Innovation Survey (CIS II) concludes that the Oslo region has the same share of innovative firms as the national average, other data sources convincingly demonstrate that Oslo is an innovative city in the Norwegian context, having for example comparatively many 'radically' innovative firms and a high rate of new firm formation. However, knowledge organizations in Oslo do not function as hubs in wider innovation systems to any large degree. The empirical results may most fruitfully be explained with reference to a 'bottom-up' theoretical approach, that considers specific local and regional resources, relations and routines as important sources of innovation.     

Mapping the Geography of R&D: What Can We Learn for Regional Innovation Policy in the Czech Republic and Beyond?

Administrative regions do not necessarily correspond to areas that are homogenous in terms of innovation intensity. Although this has been recognized in the literature, quantitative evidence that explicitly considers this problem is rare. Using spatial exploratory analysis on detailed regional data derived from a census of R&D performers in the Czech Republic, we identify local spatial clusters of R&D activities and assess the extent of their (mis)match with administrative borders. Overall, the results support the arguments for regionalization of innovation policy. However, the existing policy units do not appear well suited for this purpose. On one hand, there is a need for policy coordination between multiple administrative regions. On the other hand, however, there are diverse patterns within them. Similar problems are likely to haunt the regionalization process in many other countries, which is alarming, as the regional accent of innovation policies becomes ever more vehement over time.     

Innovation,knowledge and relations – on the role of clusters for firms’ innovativeness

ABSTRACT

For more than two decades, theories on regional clusters have inspired economic and structural policies at the European, national and regional levels. Based on the assumption that clusters generate innovation, policy-makers at all levels of governance have adopted instruments and mechanisms to stimulate, resource and sustain clusters. Despite the considerable attention paid to the clustering phenomenon, empirical evidence on to what extent firms’ innovation activities benefit from operating in clusters is scarce and inconclusive. This paper contributes to the micro-foundation of clustering effects by examining the characteristics and activities of cluster firms in relation to their innovativeness. Bridging innovation, management and cluster theories, it is argued that structural and relational embeddedness, relational capital and absorptive capacity influence clustered firms' innovativeness. Partial least-squares structural equation modelling of data from 104 firms in two software and information technology service sector clusters reveals that firms’ structural embeddedness (i.e. frequency of interactions) in clusters and external networks facilitates innovation cooperation. Firms’ absorptive capacity reinforces this positive effect of cluster-internal interactions on innovation cooperation. Results also suggest a substitution effect of trust as relational control mechanisms for formal control mechanisms within the cluster. However, the study finds no significant impact of firms’ innovation cooperation within the cluster (i.e. relational embeddedness) on their innovation success.     

Anchoring of Firms in the Neighbourhood: Does Local Social and Physical Order Affect Local Firms' Investment Strategies?

An increasing number of small- and medium-sized firms, whose low relocation propensity seems to point to strong local anchors, have moved to residential neighbourhoods. On the one hand, the neighbourhood context, an attractive production milieu with rich social network potential, may enable entrepreneurs to increase investments in either human capital (personnel) or physical capital (premises, production goods). These investments further anchor firms in a neighbourhood, where they contribute to a thriving local economy. On the other hand, high crime rates, a deteriorated physical environment and a lack of social capital can discourage entrepreneurs from investing locally. In this study, we conducted a multilevel analysis on the relative contribution of neighbourhood characteristics to entrepreneurial investment strategies and controlled for firm and entrepreneur characteristics. We found that neighbourhood cohesiveness and liveability—but not local market characteristics—make a small but significant contribution to explaining local entrepreneurs' investments. This contribution is even stronger for the smallest firms. Therefore, a spatially targeted policy aimed at improving social cohesion and safety is likely to benefit both residents and small local firms.     

Policing the near abroad: Russian foreign policy in the South Caucasus

This article tries to understand Russia's policies towards the South Caucasus and answer the question of whether there is a tension between Russia's interests and policies. An attempt is made to identify Russia's strategic interests in the region and the crucial factors that shape Russian policies. Based on the assumption that today's Russia gives de facto support to the secessionist regimes in Georgia, the author attempts to explain what the Kremlin's motives are in supporting the secessionist regimes. The author investigates whether Russian support for the separatist regimes in the South Caucasus is a reaction to the foreign policy orientation of the parent states or a part of Russia's security political interests. On the one hand, supporting instability in the South Caucasus cannot be a part of the Kremlin's strategic interests, because that can pose a threat to the North Caucasus. On the other hand, however, Russian policies are not designed to achieve long-term stability in the South Caucasus, and controlled instability seems to suit the Kremlin. Why Russia vies for coercive hegemony and supports secessionism are the central questions of this article.     

How Noninstitutionalized Policy Innovation Is Justified: A Rhetorical Perspective

The premise of this article is that developing persuasive justification is fundamental to the construction and emergence of policy innovation. Nevertheless, given that policy innovation has been typically treated as given, existing public policy research on innovation says little about the process through which the rationales for innovative policies are established. A rhetorical approach is introduced as a new perspective to illustrate this process. In particular, I focus on the case of happiness indices, which is selected because it represents a noninstitutionalized idea which challenges the incumbent way of measuring social progress by GDP-related indicators. Rhetorical analysis is then applied to a body of documents advocating this ambitious innovation, through which I reveal five distinct types of legitimation strategies (i.e., logos, authorization, cosmology, scientization, and teleology). These rhetorical strategies are used in a supplementary manner to describe a policy idea—utopian in many people's eyes—as appropriate and desirable. The concluding discussion section highlights the wider implications of the empirical findings.     

The Role of Regional Policies in Promoting Networking and Innovative Activity: Evidence from Small Finnish High-tech Firms

The success of high-technology firms is strongly dependent on their innovation capacity and network relationships. There is a growing recognition that few firms are able to innovate in isolation. Cooperation can provide access to a complementary knowledge base and resources, and speed up the innovation process of firms. Regional developers are criticized for their inadequate ability to integrate themselves into the regional networks and innovation processes of firms and their ability to determine firms' needs for innovation and networking. The research topic of this study concentrates on the possibilities of regional developers of influencing the operational environment of high-tech firms through the development of networks and innovation activity of firms. Of particular interest are the micro-level policies and concrete actions by regional developers for meeting the needs of firms. The data used are based on interviews addressed to high-tech firms located in Jyväskylä Science Park in Finland.     

SPID: A New Database for Inferring Public Policy Innovativeness and Diffusion Networks

Despite its rich tradition, there are key limitations to researchers' ability to make generalizable inferences about state policy innovation and diffusion. This paper introduces new data and methods to move from empirical analyses of single policies to the analysis of comprehensive populations of policies and rigorously inferred diffusion networks. We have gathered policy adoption data appropriate for estimating policy innovativeness and tracing diffusion ties in a targeted manner (e.g., by policy domain, time period, or policy type) and extended the development of methods necessary to accurately and efficiently infer those ties. Our state policy innovation and diffusion (SPID) database includes 728 different policies coded by topic area. We provide an overview of this new dataset and illustrate two key uses: (i) static and dynamic innovativeness measures and (ii) latent diffusion networks that capture common pathways of diffusion between states across policies. The scope of the data allows us to compare patterns in both across policy topic areas. We conclude that these new resources will enable researchers to empirically investigate classes of questions that were difficult or impossible to study previously, but whose roots go back to the origins of the political science policy innovation and diffusion literature.     

Evolution of Innovation Policy in Emilia-Romagna and Valencia: Similar Reality,Similar Results?

This paper examines the evolution of regional innovation policy in Emilia-Romagna and Valencia, two regions with similar economic features that implemented close innovation policies in the 1970s and 1980s. We investigate whether their similarities have led to parallel targets, policy tools and governance developments. We show that innovation policy in both regions suffered from the effects of privatization, budget constraints and changes to manufacturing during the 1990s and we highlight the consequences. Although Emilia-Romagna experienced deeper changes to its innovation policy, privatizations and/or the replacement of public funds promoted commercial approaches and induced market failures in both regions. The worst effects of these policies were the implementation of less-risky innovation projects, the shift towards extra-regional projects and markets, and the favouring of large firms.     

Firm Performance,Innovation Modes and Territorial Embeddedness

This paper seeks to identify different innovation modes and their territorial embeddedness, relating them to firms’ innovative and economic performance. We also analyse the relationship between the different innovation modes and the economic impact of the crisis on firms’ performance. These relationships are tested by regression and latent class models for the Portuguese population of firms, using a sample of 397 firms classified according to technological intensity, size and region. Our results show three different innovation modes: a DUI (Doing, Using and Interacting) mode, an STI (Science, Technology and Innovation) mode and a TEI (Territorial Embeddedness Innovation) mode in which territory plays a key role. These innovative modes are related in different ways to firms’ economic and innovative performance and also have marked distinctions in terms of resilience to the economic crisis. These findings lead to a reflection on regional innovation policy in the European context.     

Promoting Innovative Clusters through the Regional Research Centre (RRC) Policy Programme in Korea

This article deals with government policies to promote innovative clusters in which firms and related supporting institutes closely interact and stimulate the innovation process. It argues that the Korean government has taken various types of policies in the process of developing clusters. The Regional Research Centre (RRC) policy programme and the Semiconductor Equipment Research Centre (SERC) of Hoseo University are case studies. The RRC programme aims to establish a regional research network among research agents having a common interest in regionally specialized technologies, and to strengthen their technological capability. The SERC, established in 1996 as one of the RRCs, has played a successful role as the government intended. The local business environment wherein user firms and suppliers were scattered and fragmented was greatly improved as the result of the active role of the SERC.     

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'.