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«Regional Innovation Systems as Public Goods UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION Regional Innovation Systems as Public Goods By Phil ...»

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Benchmarking innovation performance against comparator countries and regions must be undertaken. RIS policy fine-tuning must be practised by sub-national development agencies to better integrate system interaction and improved knowledge flows.

While a positive climate for investment in spinout firms, whether from public-good organizations or private companies, is reinforced by government regulatory, taxation and incentivization policies at the level of the nation-State, every region is distinctive economically. Thus, the regional or provincial level becomes an active integrator of multilevel public and private investment pools for seed-funding and subsequent VC opportunities. Israel did this successfully as a small country. Other examples reveal successful and less successful VC vehicles with public status (as in Wales) or privatized though formerly public (as in Scotland). It is also possible to have such vehicles as private sector with a public presence in the investment syndicates (Northern Ireland). The regional system, if well integrated, is the appropriate lead partner, interacting vertically and laterally with key stakeholders in building knowledge entrepreneurship.

Knowledge transfer centres can be public,co-funded, or private

Knowledge transfer centres should be public when estimates of market strength suggest private solutions are inappropriate. But to ensure regional and national commitment instruments like seed capital funds co-funded by public-private partnerships are a suitable way to proceed. Where services are successfully provided and as firms improve profitability, privatization should not be ruled out. Centre managers should have such an aim as a central part of their job description where appropriate. Fundamentally, RIS must be public entities where there is market failure in the supply of innovation services, although the firms that use them in the system are presumed to be private. Thus, systems should be more or less pure public-goods with some joint private element at the outset, if feasible. Thereafter, profitable elements may evolve into jointly funded public-private entities. One well-established alternative for system elements like knowledge-transfer centres is for there to be a membership subscription arrangement, which turns the service into more of an associative or club form of goods. Judgements on a regional and national level with UNIDO analysis and advice should determine which approach is adopted.

Talent formation is crucial

–  –  –

which served the industry well in global markets and may well be extremely important in restructuring to face mounting competition from China. Spain’s ceramics cluster, by contrast, has deficiencies in this aspect but strengths in the science of ceramics. This suggests that a forum and consensus approach towards change in complex and unstable competitive environments is a constructed advantage of considerable value, in this case in getting the skills mix from the labour market in the correct balance.

The role of business and industry associations

Finally, this draws attention to the important intermediary role played by business and industry associations. They can serve their overall membership better when they are confederated or consolidated with one voice than when they are fragmented. In the case of successful real services units or centres, tailored to meet customers’ and members’ needs, the absence of basic scientific research in the cluster may not be a problem if it can be bought as needed from elsewhere. These are usually regional- and local-level interactions rather than national or international, although pilot projects to establish such support vehicles in clusters can help the aims of collective entrepreneurship by the supply of common business services, networking opportunities, and representation at overseas trade fairs and exhibitions, to name a few. Thereafter, emulation of good practice is mainly a function for the RIS itself interacting with business cluster associations, municipalities and labour market agencies at the local level.

The creation of RIS disbursing resources of a public-goods nature is desirable in developmental terms. It also fits modern economic growth theory with its stress on global trade, increasing returns to agglomeration and the key role of public goods like ideas and knowledge. Finally, the RIS approach is seen fully to engage with distinctive responsibilities at all economic governance levels. UNIDO and other MEAOs can act as initiators, securers of national support, advisers and co-funders of pilot projects. The national level takes the lead in policy formation and reform. For innovation this means funding and co-funding packages among science, industry and employment ministries to ensure that the transformation of research cultures towards market opportunities is done in a thoughtful and well-planned way. Infrastructural and pump-priming (earlystage stimulation of action by seed-funding to get initiatives going) policy-related funding is also key. Financing for incubation and seed-funding incubatee firms is best conducted at the regional level with local fine-tuning covering talent and skills formation and the building of strong multilevel associative interactions. Regional funding of specific initiatives as regards venture capital, entrepreneurship and skills adaptation is also appropriate, as is co-funding of such activities with the private sector wherever possible References Best, M. (1990), The New Competition (Cambridge: Polity).

Best, M. (2001), The New Competitive Advantage (Oxford: Oxford University Press).

Braczyk, H., P. Cooke and M. Heidenreich (eds.) (1998), Regional Innovation Systems (London: UCL Press).

Capra, F. (2002), The Hidden Connections (London: Harper Collins).

Chairatana, P. and B. Sinh (2003), “Strategising ASEAN Innovation System: The Case of Thailand and Vietnam”, paper presented at the First Globelics Conference, Innovation Systems and Development Strategies for the Third Millennium, Rio de Janeiro, 2-6 November.

Cooke, P. (1992), “Regional Innovation Systems: Competitive Regulation in the New Europe”, Geoforum, 23, pp. 365-382.

Cooke, P., P. Boekholt and F. Tödtling (2000), The Governance of Innovation in Europe (London: Pinter).

Cooke, P., C. Davies and R. Wilson (2002), “Innovation Advantages of Cities: From Knowledge to Equity in Five Basic Steps”, European Planning Studies, 10, pp. 233-250.

Cooke, P., M. Heidenreich and H.J. Braczyk (eds.) (2004), Regional Innovation Systems, 2nd edition (London: Routledge).

Cooke, P. and K. Morgan (1998), The Associational Economy (Oxford: Oxford University Press).

Edquist, C. and M. McKelvey (1997), “High-tech R&D Intensity without High-tech Products: A Swedish Paradox”, in N. Klaus and J. Bjorne (eds.), Institutions & Economic Change: New Perspectives on Markets, Firms & Technology (Cheltenham: Edward Elgar).


Etzkowitz, H., J. Mello and M. Almeida (2005), “Towards “Meta-Innovation” in Brazil:

The Evolution of the Incubator and the Emergence of a “Triple Helix” ”, Research Policy, 34, pp. 411-424.

Florida, R. (2002), The Rise of the Creative Class (New York: Basic Books).

Fontes, M. (forthcoming), “Knowledge Access at Distance: Strategies and Practices of New Biotechnology Firms in Emerging Locations”, in P. Cooke and A. Piccaluga (eds.), Regional Development in the Knowledge Economy (London: Routledge).

Foray, D. and C. Freeman (1993), Technology & the Wealth of Nations: The Dynamics of Constructed Advantage (London: Pinter).

Gabaldón-Estevan, D., I. Fernandez de Lucio and E. Tortajada-Esparza (2005), “Industrial Districts and Chances for Innovation”, paper presented at the 5th Triple Helix Conference, The Capitalisation of Knowledge, Turin, 18-21 May.

Geertz, C. (1973), The Interpretation of Cultures (New York: Basic Books).

Hall, P. and D. Soskice (eds.) (2001), Varieties of Capitalism: The Institutional Foundations of Comparative Advantage (Oxford: Oxford University Press).

Iammarino, S. (2005), “An Evolutionary Integrated View of Regional Systems of Innovation: Concepts, Measures and Historical Perspectives”, European Planning Studies, 13, pp. 497-520.

Kay, J. (2003), The Truth About Markets (London: Allen Lane).

Machlup, F. (1962), The Production and Distribution of Knowledge in the United States (Princeton NJ: Princeton University Press).

Metcalfe, S. (1997), “Technology Systems and Technology Policy in an Evolutionary Framework”, in D. Archibugi and J. Michie (eds.), Technology, Globalisation & Economic Performance (Cambridge: Cambridge University Press).

OECD (1999), S&T Indicators: Benchmarking the Knowledge-Based Economy (Paris:


OECD (2004), OECD Science, Technology & Industry Outlook 2004 (Paris: OECD).

OECD (2005), OECD Economic Outlook No. 78 (Paris: OECD).

Orlikowski, W. (2002), “Knowing in Practice: Enacting a Collective Capability in Distributed Organising”, Organisation Science, 13, pp. 249-273.

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Späth, L. (1985), Wende in die Zukunft (Reinbek: Rowohlt Taschenbuch Verlag).

Van der Linde, C. (2003), “The Demography of Clusters: Findings from the Cluster Meta-Study”, in J. Bröcker, D. Dohse and R. Soltwedel (eds.), Innovation Clusters & Interregional Competition (Berlin: Springer).

Versino, M.and U. Hoeser (2005), “The Incubation of Knowledge-Intensive Firms in Argentina”, paper presented at the 5th Triple Helix Conference, The Capitalisation of Knowledge, Turin, 18-21 May.

Zouain, D. and W. De Sousa (2005), “Development of a Culture Based on Strategic Knowledge Management of a Brazilian Public Research Institute: The Case of IPEN”, paper presented at the 5th Triple Helix Conference, The Capitalisation of Knowledge, Turin, 18-21 May.

Printed in Austria V.05-91444—May 2006—600


Vienna International Centre, P.O. Box 300, 1400 Vienna, Austria Telephone: (+43-1) 26026-0, Fax: (+43-1) 26926-69 E-mail: unido@unido.org, Internet: http://www.unido.org

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