Regional Innovation Systems: General Findings and Some New Evidence from Biotechnology Clusters

This paper focuses on interactive innovation. It starts by operationalising Regional Innovation in the context of multi-level governance. It shows how regional and external innovation interaction among firms and other innovation organizations is important for regional innovation potential. The ability to access and use funding for innovation support for regional firms and organizations is crucial for regional innovation promotion. Equity investment funding is more important than public funding, which tends to be cautious and otherwise risk avoiding, except in circumstances of market arrest or failure to develop. Regional systems of innovation are broader than single sectors or clusters but some of these will be strategically privileged recipients of policy support because of their growth performance or potential, rather than, as in the past, their uncompetitiveness. The paper devotes space to exploring biotechnology clustering from a regional innovation systems viewpoint, as an instance of rather strong sectoral, regional innovation systems capabilities, though integrated also to global knowledge supply and markets. Illustration is provided of the way such sectoral innovation systems work at local regional level by reference to cases from Cambridge, Massachusetts and Cambridge, England.     

The nature of innovation in emerging industries in China: an exploratory study

In China, traditional manufacturing industries have been world leaders in low-cost manufacturing for overseas multinationals. It is well-known that these “traditional industries” depend on overseas parent firms for innovation. In recent decades, China’s desire is to encourage and promote innovation-based emerging industries within its borders. By definition, “emerging industries” are composed of domestic Chinese firms without an overseas parent firm. We know very little about the innovation practices in these emerging Chinese industries; we hypothesize that the innovation practices in these firms are quite different from traditional Chinese industries with overseas parents. The Kunshan region in China has attracted both traditional and emerging industries that have contributed to unparalleled economic growth in the region. This is a significantly large region with a population of 1.65 million with a regional GDP of USD 32 billion (2010). In this study, we use survey data from companies in this thriving region to compare R&D and innovation practices of the firms in the traditional and emerging industries in this region. We do not know enough about the innovation practices of emerging industrial firms in China, who may have a profound influence on the industrial China of the future much like South Korean firms such as KIA, Hyundai, Samsung, etc. The findings of this exploratory study based on data collected from the Kunshan region enables us to recommend avenues for future research.     

Business incubators and the networks of technology-based firms

This paper looks to broaden understanding about the networks of firms located in Business Incubators (BIs). To achieve this objective, a framework for understanding the networks of incubator firms was constructed. We argue that networks at incubators can be seen in two dimensions. In the first dimension, we define incubator firm networking activities in terms of resource type, i.e. tangible and intangible resources. In the second dimension, we define networks of incubator firms as external and internal. Internal networks refer to the relationship among tenants while external networks refer to the firm’s relationship with other institutions such as a university and/or research centre. Networks of firms located at the Daresbury Science and Innovation Campus in the United Kingdom were investigated using a tenant survey. Findings show that incubator firms develop more networks to access intangible resources than tangible resources. The analysis explored and compared types of networks for highly innovative firms and medium to low innovative firms and found differences in their networking activity. With regards to policy recommendations, this study shows network support for incubator firms can be improved. It also shows that those concerned with developing BI policy need to recognize and appreciate that not all incubator firms have the same needs. This should be taken into account when developing network support.     

Will firms consider a European optional instrument in contract law?

The diversity of contract laws is said by the Commission to discourage cross-border trade and hinder the development by SMEs of a pan-European commercial policy. An optional instrument containing both facilitative general contract rules and mandatory consumer protection rules, one of the solutions proposed by the Commission, is gaining rapid support from key stakeholders. Drawing from firms?? own views on the problems of legal diversity, and insights from organisational science, this article sets out the circumstances in which firms will likely consider a European optional code. Results are mixed: some firms may consider it, while others may ignore it. Much depends the firm??s aspirations (i.e. SMEs cannot be assumed as-yet to have pan-European aspirations), how the firm perceives the problems of legal diversity, and how it searches for and decides upon solutions. It would appear that a European optional instrument may not be as useful or widely considered as its proponents would like to believe.     

Structured uncertainty: a pilot study on innovation in China’s mobile phone handset industry

This paper explains why many small and medium-sized (SME) private high-technology Chinese manufacturing firms survive and thrive within an institutional and political system arrayed against them. We use the mobile phone handset industry as an illustrative case of the vitality and capabilities of Chinese SMEs. We argue that in capitalizing on the advantages offered by the global fragmentation of production, while also being constrained by an institutional climate of structured uncertainty, Chinese non-state firms have chosen a pattern of incremental innovation in their search for competitive advantage. Despite falling outside central government innovation plans and engaging in practices inimical to nurturing novel product innovation capabilities, these firms have a sustainable business model based on niche tailoring, rapid product introduction and utilization of standardized components.     

Business Development Support and Knowledge-Based Businesses

Knowledge-based businesses are vital to the economic development and revitalization of many regions, especially areas that have experienced a decline in traditional industries. Notwithstanding the importance of KBBs to areas with marginal economies, little is known about the business development support requirements of these firms and the extent to which their support needs are being met. Through the use of a telephone survey, this empirical study investigates the demand-side perspectives and experiences of entrepreneurs in a peripheral region of Canada to determine the types and sources of support used at various stages of business development, and to identify potential support gaps. Findings indicate support used by KBBs differs from more traditional firms and that support needs change as firms move through the life cycle. There appears to be a low level of awareness among firms in the study region of available support services and a perception that support beyond the start-up stage is generally lacking. These findings have important implications for researches and for agencies with a business development support mandate.     

中小企业关系型贷款定价行为研究--以江苏省某国有银行县级支行为例

本文运用关系型贷款理论,以江苏省某国有银行县级支行为例,对基层地区中小企业贷款定价的影响因素进行了实证分析.主要结论有:第一,在地方信贷市场上,关系对贷款定价具有明显的影响,且关系越久,贷款利率越高;第二,企业的其他贷款行越多,贷款利率就越高;第三,企业年龄、资产规模、速动比率以及抵押方式等对贷款定价均存在一定影响.在垄断性信贷市场上,与银行关系长久的企业可能遭遇较高的贷款利率.应积极促进地方信贷市场上的银行业竞争,并将国有银行地方分支机构的信贷决策权下放,以更好地服务于地方中小企业.     

Innovation and internationalization: the case of Italy

The aim of this paper is to analyze the impact of international activities on knowledge output. For this purpose, we employ a dataset containing exclusively qualitative information about a sample of small and medium Italian manufacturing firms. In the econometric analysis, a probit model is used. The results of the estimations highlight that firms active in international markets generate more knowledge than their counterparts which sell in the national market only. There are two possible explanations of this result. First, globally engaged firms employ more knowledge inputs, such as higher innovation expenditures. Second, international firms are more innovative because they can access to a larger flow of ideas from external sources.     

R&;D productivity and the organization of cluster policy: an empirical evaluation of the Industrial Cluster Project in Japan

Industrial clusters have attracted increasing attention as important locations of innovation. Therefore, several countries have started promotion policies for industrial clusters. However, there are few empirical studies on cluster policies. This paper examines the effects of the “Industrial Cluster Project” (ICP) in Japan on the R&D productivity of participants, using a unique dataset of 229 small firms, and discusses the conditions necessary for the effective organization of cluster policies. Different from former policy approaches, the ICP aims at building collaborative networks between universities and industries and supports the autonomous development of existing regional industries without direct intervention in the clustering process. Thus far, the ICP is similar to indirect support systems adopted by successful European clusters. Our estimation results suggest that participation in the cluster project alone does not affect R&D productivity. Moreover, research collaboration with a partner in the same cluster region decreases R&D productivity both in terms of the quantity and quality of patents. Therefore, in order to improve the R&D efficiency of local firms, it is also important to construct wide-range collaborative networks within and beyond the clusters, although most clusters focus on the network at a narrowly defined local level. However, cluster participants apply for more patents than others without reducing patent quality when they collaborate with national universities in the same cluster region.     

Evaluating quality or lowest price: consequences for small and medium-sized enterprises in public procurement

This study investigates the effect of evaluating the most economically advantageous tender (MEAT) in public procurement rather than lowest price. According to the European Union (EU), evaluations based on MEAT, rather than lowest price, give an advantage to small and medium-sized enterprises (SMEs) in winning public procurement contracts because such firms are viewed as sources of innovation. Thus, MEAT as an evaluation criterion is recommended throughout the EU. Using procurement data from Sweden, I find no significant effect on SME participation in procurement calls for tender as a result of the use of MEAT in firm evaluations. However, large firms significantly increase their participation when MEAT is evaluated. Even more importantly, micro, small and medium-sized firms’ probability of winning procurement contracts significantly decreases when MEAT rather than lowest price is used as an evaluative criterion. Thus, evaluation in terms of MEAT increases large firms’ bids and success rates; hence, this policy is counterproductive. The reasons SMEs are disadvantaged as a result of evaluations based on MEAT are, however, not examined in this paper and require further research.     

Never mind the quality feel the width: University–industry links and government financial support for innovation in small high-technology businesses in the UK and the USA

In this paper we use a size and industry matched sample of over 1,900 UK and US businesses for the period 2004–05 in the manufacturing and business services sectors to analyse the relative “strength” of the university–industry ecosystems in which these firms operate in the two economies. Our analysis shows that in both countries universities per se play a quantitatively smaller role as a source of knowledge for business innovation than either the business sector itself or a variety of organisations intermediating between the university and business sectors. Our analysis reveals a much more diffuse university–industry ecosystem in the UK in which a higher proportion of businesses claim links external to themselves in their pursuit of knowledge for innovation and a higher proportion report directly connecting with universities. US firms are more likely to access knowledge through a combination of business and intermediary sources and are less likely to have established formal collaborative or partnership agreements in the 3 years prior to the survey. We also find, however, that a higher proportion of US firms place a very high value on the connections they have with universities and are much more likely to commit resources to support such innovation related university interactions. A similar pattern of diffuse but weaker links characterise the supply of public sector financial assistance for innovation in our sample firms. UK firms are more likely to be in receipt of assistance, but receive far less per firm in absolute terms and relative to their R&D expenditures. It appears that the UK university–industry ecosystem is characterised by a greater width than quality of interaction.     

Firms’ rationales for interaction with research universities and the principles for public co-funding

R&D managers at 50 firms who have formal relations with two research universities in Stockholm are interviewed about their rationales for collaboration. Drawing on this material, a distinctive typology of rationales for establishing cooperative relations is presented. While the typology demonstrates a considerable breadth of interaction rationales, rationales related to innovation, in terms of invented or improved products or processes, are found to be the main drivers for interaction. Based on this framework, we analyse which rationales for interaction are consistent with public rationales for supporting university-industry relationships. Public co-funding that allow firms to influence (part of) the academic agenda is identified as a particularly interesting case that requires further theoretical attention.     

Regional Innovation Systems: The Integration of Local ‘Sticky’ and Global ‘Ubiquitous’ Knowledge

The paper examines how firms in three regional clusters in Norway dominated by shipbuilding, mechanical engineering and electronics industry, respectively exploit both place-specific local resources as well as external, world-class knowledge to strengthen their competitiveness. From these case-studies we make four points: (1) Ideal-typical regional innovation systems, i.e., regional clusters surrounded by supporting local organisations, is rather uncommon in Norway. (2) External contacts, outside of the local industrial milieu, are crucial in innovation processes also in many SMEs. (3) Innovation processes may nevertheless be regarded as regional phenomena in regional clusters, as regional resources and collaborative networks often have decisive significance for firms' innovation activity. (4) Regional resources include in particular place-specific, contextual knowledge of both tacit and codified nature, that, in combination, is rather geographically immobile.     

Contextualising Regional Innovation Systems in a Globalising Learning Economy: On Knowledge Bases and Institutional Frameworks

In order to advance the understanding of which types of regional innovation system represent effective innovation support for what kinds of industry in different regions analyses must be contextualized by reference to the actual knowledge base of various industries as well as to the regional and national institutional framework, which strongly shape the innovation processes of firms. Of special importance is the linkage between the larger institutional frameworks of the national innovation and business systems, and the character of regional innovation systems. In making the arguments about a general correspondence between the macro-institutional characteristics of the economy and the dominant form and character of its regional innovation systems a link is provided to the literature on ‘varieties of capitalism’ and national business systems.     

The Techno-Economic: Perspectives for Analysis and Intervention

This paper compares the macro- and micro- analyses of techno-economic change. Arguing for perspectives which are sensitive to the local flexibility of innovation but which can also provide suggestions for policy and intervention, it describes and reviews the two major contributions: work on Techno-Economic Networks, and on Techno-Economic Paradigms. It is argued that the former has greater depth of analytical sensitivity, whilst the latter is more policy-relevant. Whilst there are approaches, such as Constructive Technology Assessment, which attempt to combine the two perspectives, these are seen as failing to retain sensitivity to the power differentials between key actors such as firms, experts, governing agencies or citizens' groups. The paper concludes by advocating attention to the ‘meso-level techno-economic’—the networks of institutions and actors at work in: geographically bounded systems of innovation; scientific and technological disciplines; firms, their strategies and linkages; and the nexus between production and consumption.     

Innovation capacity and economic development: China and India

Decomposing the GDP growth from 1981 to 2004, this paper finds that innovation capacity has contributed significantly to the economic growth of China and India, especially in the 1990 s. Outputs of the national innovation system, measured by patents and high-tech/service exports, demonstrate the considerable progress China and India have made in innovation capacity. The enhanced innovation capacity of China and India is primarily due to their heavy investment in the inputs of innovation system, i.e., R&D expenditure and R&D personnel, in recent decades. This paper emphasizes the role that the governments have played in promoting innovation capacity and their contribution to economic development. Both governments have transformed their national innovation systems through linking the science sector with the business sector, providing incentives for innovation activities, and balancing import of technology and indigenous R&D effort. Using case studies of domestic biotech firms in China and India, this paper also offers micro-level insights on innovation capacity and economic development: (1) innovation capacity has become essential for domestic firms?? market success and (2) global institutional factors and national government policies on innovation have considerable influence on the choice of innovation at the firm level, i.e., to conduct indigenous R&D or to import foreign technology.     

COMPETITION POLICY IN CHINA AND ITS RELEVANCE TO SMES

Competition policy has great relevance to all the firms in any economy. Even though it is unlikely that small and medium-sized enterprises (SMEs) have enough market power to constrain competition through a misuse of such power, they may still face prosecution if they are involved in a boycott of competitors or suppliers, price-fixing, output-restriction and other monopoly agreements. This article discusses antitrust issues pertaining to SMEs with a focus on China’s Anti-Monopoly Law (AML) and its implementation rules. Contrary to the popular view that SMEs benefit from competition laws, evidence shows that they are reluctant to get involved in antitrust litigation against large firms partly because of the high legal costs involved. There is an urgent need to promote an awareness of antitrust compliance in China and to educate SMEs about the need to avoid breaching the new antitrust law and its associated regulations. In the meantime, SMEs should take full advantage of the antitrust laws to fight against the abuse of market dominance directed at them, and to gain equal opportunities to market access.     

Innovation capacity in the healthcare sector and historical anchors: examples from the UK,Switzerland and the US

Innovation is an integral part of economic development in developed economies. In the post 2008 period, a key policy agenda is that of sustainable development, which calls for innovation in all aspects of value-chains. In this paper, we focus on innovation from the biotech—pharma perspective to see whether or not this will lead to a sustainable future for the regions where there are clusters of firms in this sector. We examine data from a recently completed European Union study of innovation in the Healthcare sector from the UK and Switzerland, countries with an historical base in pharma, to understand how innovation pathways vary at the regional level in the broader life sciences, which incorporate biotech and more. Innovation in the healthcare sector in two regions, Oxfordshire in the UK and Zurich in Switzerland are compared. We contextualize our discussion by drawing on studies that focus on the sector in the US, specifically Boston. The analytical framework comprises three elements: innovation systems and national and regional economic development theories are the first two, followed by approaches which consider organizational or institutional activity. This framework is used to help explain and understand the complexity of how innovation is organized at the sub-national level. The overall context is that it is increasing becoming a condition for government financing of research that it has more immediate application in industry or have the possibility of commercialisation (e.g., translational research).     

Networking and Knowledge Transfer Between Research and Industry in Transition Countries: Empirical Evidence from the Slovenian Innovation System

Using empirical data from an innovation survey carried out in the Republic of Slovenia in 1997/1998, the paper analyses the innovation-relevant co-operation pattern between different kinds of research institutes and industry. The hypothesis is made that system transformation is not yet accomplished in Slovenia, and that the innovation system is still fragmented. While there is intense co-operation between Slovenian research institutes and companies, the level of co-operation between university institutes and industrial firms remains below the average of all Slovenian research institutes, although one focal point in the co-operation activities of university institutes is the support of firms in market introduction. Mainly larger institutes co-operate with larger firms, whereas small institutes hardly co-operate. Consequently, the challenge of innovation policy is to integrate all participants of the Slovenian innovation system in a structure of mutual knowledge and information exchange.     

Industrialization of hybrid electric vehicle technology: identifying critical resource dimensions

The purpose of this study is to identify critical resource dimensions for the industrialization of hybrid electric vehicle technology. This study focuses on small- and medium-sized technology-based firms in Sweden that employ between 1 and 500 employees and that could be potential suppliers of hybrid electric vehicle technology. The empirical data were collected using a survey (questionnaire) and it covers 40 technology-based firms in eight industrial branches in Sweden. We have included 18 variables in order to identify critical resources regarding Business and R&D networks in three dimensions: ideas and advice, production, and R&D. Two regression models developed for battery systems and battery cells have significant findings. Networks with universities and consultants are especially important. One operative way is building strategic alliances with other firms. The main contributions of this study are empirical support that network resources are necessary and important in battery systems and battery cells and, more broadly, networks are necessary systems for technology shifts in the hybrid electric vehicle industry.