Dr. Shahram Yazdani
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Innovation System Dr. Shahram Yazdani
Shahid Beheshti University of Medical Sciences School of Medical Education
Strategic Policy Sessions: 06
Industrial vs. Knowledge-Base Economies
Dr. Shahram Yazdani
Since the beginning of the 1970s, the most advanced economies in the world have been undergoing structural change, turning them from industrialized economies based on labor, tangible capital and material resources into economies based more and more on the creation, diffusion and exploitation of new knowledge. One of the fundamental characteristics of this shift is the structural intensification of research activities.
Knowledge as a Strategic Asset
Dr. Shahram Yazdani
In the emerging ‘knowledge-based economy’, also called ‘learning’ economy, economic growth depends more directly on investment in knowledge, which increases productive capacity, than on traditional factors of production (Lundvall and Johnson, 1994). In other words, knowledge raises the returns on and the accumulation of other types of investment (Nelson and Romer, 1996).
Definitions of Knowledge-Based Economy
APEC: a KBE is an economy in which the production, distribution and use of knowledge are the main drivers of growth, wealth and employment across all industries. OECD: where investment in knowledge is defined as public and private spending on higher education, expenditure in R&D and investment in software.
Dr. Shahram Yazdani
Timing of Adoption
It often takes a long time for Technology to move from lab. to commercial value:
Freon refrigerants - 1 year Zipper - 27 years Mechanical cotton picker - 53 years Fluorescent lamp - 79 years
Dr. Shahram Yazdani
Shortening of cycles of late innovations: Spread of successive technologies in the US automobile industry
Percentage of output incorporating the innovation
Dr. Shahram Yazdani
The Geographic Outspreading of Technologies as They Mature
Dr. Shahram Yazdani
The Importance of Systems
Dr. Shahram Yazdani
Despite similarly large investments in R&D by various industrialized and semiindustrialized countries starting in the 1950’s and 60’s “evidence accumulated that the rate of technical change and of economic growth depended more on efficient diffusion than on being first in the world with radical innovations and as much on social innovations as on technical innovations” (Freeman, 1995).
Tacit vs. Codified knowledge
Codified scientific and technological information, are disembodied knowledge (in articles, blueprints, patents, software and databases), a so-called “nonrival public good” Tacit knowledge (skills, competencies, routines) is acquired through experience (learning, producing, researching) and consists of the accumulation of human skills and techniques.
Dr. Shahram Yazdani
Propositional and Prescriptive Knowledge
Dr. Shahram Yazdani
Knowledge that catalogues natural phenomena and regularities (“knowledge of what”), which is called propositional knowledge. Knowledge that prescribes certain actions that constitute the manipulation of natural phenomena for human material needs (“production”) and which is called prescriptive knowledge.
Discovery vs. Invention
Dr. Shahram Yazdani
When an addition is made to the base of propositional knowledge, it is typically called discovery. When an addition is made to the base of prescriptive knowledge, it is typically called invention. When prescriptive knowledge is carried out, it is termed production. In prescriptive knowledge, there is always a tacit component.
Technology
Technology is the know-how on how to apply scientific knowledge. As such it belongs to a larger group of activities which embrace the creation and use of artifacts, crafts and items of knowledge as well as various forms of social organization (Grupp, 1998). It is important to distinguish between technological change and scientific advance.
Dr. Shahram Yazdani
Science and Technology
Dr. Shahram Yazdani
Science includes processes of knowledge creation and diffusion. Technology on the other hand focuses on the application or usage of the created knowledge. The research process is of major importance for building and using knowledge for the materialization of innovations.
Basic Research
Basic research or fundamental research refers to experimental or theoretical work geared ‘primarily’ to the acquisition of new knowledge about the basic origin of phenomena and observable events without targeting a particular application of use.
Dr. Shahram Yazdani
Applied Research
Dr. Shahram Yazdani
Applied research is biased towards specific and practical purposes or objectives. It also includes a new knowledge generation process but always in regard of the practical application. The results of applied research are intended to be valid for a limited range of products of processes.
Experimental Development
Experimental development is systematic work structured on existing knowledge which is directed towards production of new materials, products, equipment or the installation of new processes, systems or services.
Dr. Shahram Yazdani
Academic vs. Industrial Research
Dr. Shahram Yazdani
The largest part of academic research is concentrated in basic research, although applied research efforts are also undertaken to a considerable extent in many academic departments Industrial research and development is mainly concerned with the design and development of artifacts, directed at the more practical application.
Academic vs. Industrial Research
Dr. Shahram Yazdani
Over the years, this distinction has become more and more obsolete. Applied R&D activities are also performed by academic researchers, while industry is involved in basic research to a greater extent. Furthermore, there is a strong interaction between academic and industrial research, reinforcing each other's capacity to solve complex problems.
Definition of Innovation
Innovation is the ability to manage knowledge creatively in response to market-articulated demands and other social needs.
Dr. Shahram Yazdani
Definition of Innovation
Innovation results from complex interactions between research, design, production and marketing that take place in a web of interactive learning within and among firms and other knowledge organisations.
Dr. Shahram Yazdani
Definition of Innovation
“New combinations“ of previously not connected ideas, knowledge, technologies or markets.
Dr. Shahram Yazdani
Innovation as a matching engine
Dr. Shahram Yazdani
The Innovation Process Basic Research
Discovery
Propositional Knowledge
Dr. Shahram Yazdani
The Innovation Process Basic Research
Discovery
Propositional Knowledge
Applied Research
Invention
Prescriptive Knowledge (Technology)
Dr. Shahram Yazdani
The Innovation Process Basic Research
Discovery
Propositional Knowledge
Applied Research
Invention
Prescriptive Knowledge (Technology)
Design & Development
Patenting
Product & Process
Dr. Shahram Yazdani
The Innovation Process Basic Research
Discovery
Propositional Knowledge
Applied Research
Invention
Prescriptive Knowledge (Technology)
Design & Development
Patenting
Product & Process
Dr. Shahram Yazdani
Marketing
Usage & Application
The Definition
Dr. Shahram Yazdani
The phrase “system of innovation” is used for describing the many interactions among many participating institutions, organisations and firms, most of which “formally” operate independently of each other.
The Goal of an Innovation System
The goal of an innovation system is to develop, diffuse and utilize innovations.
Dr. Shahram Yazdani
Elements of Innovation System
Policy Bodies
Regulatory Bodies
Ethics bodies, Registration, and patent offices
Research and Development Institutes
Dr. Shahram Yazdani
Central policy and financing agencies Relevant Parliamentary or Governmental Committees Government agencies for technology diffusion and incubation Economic development agencies in government
Government Research institutes Private non-profit Research Organizations Corporate R&Ds R&D Performing Firms
Business Enterprises
Large local corporations SMEs Business associations
Elements of Innovation System
Education and Training institutions
Non-financial Support Organizations
Public Technology Transfer Agencies Public Innovation Advisory Agencies Science and Technology Parks Technology Incubators
Financial Support Organizations
Universities Technical Colleges Primary and secondary schools
Commercial Banks Venture capitalists
Organized Civil Society
Dr. Shahram Yazdani
Labour unions, especially those dealing with technical change NGOs delivering technical services Policy advisory bodies interested in technical change Professional and Academic Societies
Types of systems of innovation
Over the nearly two decades since the emergence of the national innovation systems paradigm, a number of other system level analyses have emerged. The different systems frameworks can be defined as follows:
Dr. Shahram Yazdani
National innovation systems Regional innovation systems Clusters Sectoral innovation systems Technological systems of innovation
Definition of NIS (Freeman, 1987)
“The network of institutions in the publicand private-sectors whose activities and interactions initiate, import, modify and diffuse new technologies”
Dr. Shahram Yazdani
Definition of NIS (Lundvall, 1992)
“The elements and relationships which interact in the production, diffusion and use of new, and economically useful knowledge... and are either located within or rooted inside the borders of a nation state”
Dr. Shahram Yazdani
Key objectives of an innovation policy:
Building an innovation culture Enhancing technology diffusion Promoting networking and clustering Leveraging research and development Responding to globalization
Dr. Shahram Yazdani
Functions of NIS (Galli and Teubal 1997)
Hard functions 1. 2.
R&D activities (public) and the supply of scientific and technical services to third parties (business sector and public administration).
Soft functions: 1. 2. 3. 4. 5.
diffusion of information, knowledge and technology; Policy making; design and implementation of institutions concerning patents, laws, standards, etc.; diffusion of scientific culture, and professional coordination.
Dr. Shahram Yazdani
Functions of NIS (Rickne, 2000)
Dr. Shahram Yazdani
to create human capital; to create and diffuse technological opportunities; to create and diffuse products; to incubate in order to provide facilities, equipment, and administrative support, to facilitate regulation for technologies, materials, and products that may enlarge the market and enhance market access; to legitimize technology and firms; to create markets and diffuse market knowledge; to enhance networking; to direct technology, market, and partner research; to facilitate financing; and to create a labor market that [can be utilized].
Functions of NIS (Johnson 2001)
Dr. Shahram Yazdani
Supply incentives for companies to engage in innovative work Supply resources (capital + competence) Guide the direction of search (influence the direction in which actors deploy resources) Recognize the potential for growth (identifying technological possibilities and economic viability) Facilitate the exchange of information and knowledge Stimulate / create markets Reduce social uncertainty (i.e. uncertainty about how others will act and react) Counteract the resistance to change that may arise in society when an innovation is introduced (provide legitimacy for the innovation)
Silicon Valley
Dr. Shahram Yazdani
In sixty years, the 50 mile strip from San Francisco-Berkeley to San Jose, California has grown to over 7,000 electronics and software companies with a market value of $ 450 billion. Its 300,000 top scientists include some onethird born abroad. A dozen new firms (and dozens of new millionaires through IPOs) are created each week.
Hubs of Technological Innovation
Dr. Shahram Yazdani
Analysis of the foci of various systems of innovation frameworks More specific Innovation Clusters
Regional Innovation System
Place
National Innovation System
Sectoral Innovation System
Dr. Shahram Yazdani
Technological Systems of Innovation
Less specific Less specific
More specific
System Actors / Agent
Definition of Clusters
Dr. Shahram Yazdani
a concentration of competing, collaborating and interdependent companies and institutions which are connected by a system of market and non-market links. customers, suppliers, competitors and other supporting institutions such as universities, colleges, research bodies, financial institutions and the utilities
Analysis of the foci of various systems of innovation frameworks More specific Innovation Clusters
Regional Innovation System
Place
National Innovation System
Sectoral Innovation System
Dr. Shahram Yazdani
Technological Systems of Innovation
Less specific Less specific
More specific
System Actors / Agent
Definition of regional innovation system
A set of interacting private and public interests, formal institutions and other organizations that function according to organizational and institutional arrangements and relationships conducive to the generation, use and dissemination of knowledge.
Dr. Shahram Yazdani
Definition of regional innovation system
Dr. Shahram Yazdani
This set of actors produce pervasive and systemic effects that encourage firms within the region to develop specific forms of capital that is derived from social relations, norms, values and interaction within the community in order to reinforce regional innovative capability and competitiveness.
Analysis of the foci of various systems of innovation frameworks More specific Innovation Clusters
Regional Innovation System
Place
National Innovation System
Sectoral Innovation System
Dr. Shahram Yazdani
Technological Systems of Innovation
Less specific Less specific
More specific
System Actors / Agent
Technology-specific Innovation System
This concept implies that there are many technology specific innovation systems within a country and that each technological system is unique in its ability to develop and diffuse new technology.
Dr. Shahram Yazdani
(Jacobsson and Johnson 2000)
Boundary relations between National, Sectoral, and Technology Specific Innovation Systems National Innovation System
Dr. Shahram Yazdani
Boundary relations between National, Sectoral, and Technology Specific Innovation Systems National Innovation System Sectoral Innovation System Sectoral Innovation System
Sectoral Innovation System
Sectoral Innovation System
Sectoral Innovation System
Dr. Shahram Yazdani
Boundary relations between National, Sectoral, and Technology Specific Innovation Systems National Innovation System Sectoral Innovation System Sectoral Technology Specific Innovation System Sectoral Innovation Innovation System System
Sectoral Innovation System
Technology Specific Innovation System
Sectoral Innovation System
Dr. Shahram Yazdani
Dynamics of technology specific innovation systems
In the case of technology specific innovation systems, the number of actors, networks and relevant institutions is much smaller than in a NSI, which reduces the complexity.
Dr. Shahram Yazdani
The Changing Scientific Roots of Innovation
Dr. Shahram Yazdani
Larger Developed NISs
Developed NISs
High Tech Smaller NISs Services Oriented NISs
NISs
Natural Resources Based NISs Catching Up NISs Structuring NISs
Developing NISs
Emerging NISs Unformed NISs
Dr. Shahram Yazdani
Larger Developed NISs
Developed NISs
High Tech Smaller NISs Services Oriented NISs
NISs
Natural Resources Based NISs Catching Up NISs Structuring NISs
Developing NISs
Emerging NISs Unformed NISs
Dr. Shahram Yazdani
Larger Developed NISs
Developed NISs
High Tech Smaller NISs Services Oriented NISs
NISs
Natural Resources Based NISs Catching Up NISs Structuring NISs
Developing NISs
Emerging NISs Unformed NISs
Dr. Shahram Yazdani
Larger OECD economies. These NISs are doing relatively better on innovation than in diffusion. Scale effect might be present in explaining a relatively high performance on innovation.
Larger Developed NISs
Developed NISs
High Tech Smaller NISs Services Oriented NISs
NISs
Natural Resources Based NISs Catching Up NISs Structuring NISs
Developing NISs
Emerging NISs Unformed NISs
Dr. Shahram Yazdani
France, Germany, Italy, Japan, Korea, Taiwan, UK, US
Larger Developed NISs
Developed NISs
High Tech Smaller NISs Services Oriented NISs
NISs
Natural Resources Based NISs Catching Up NISs Structuring NISs
Developing NISs
Emerging NISs Unformed NISs
Dr. Shahram Yazdani
They are small open economies with a high degree of specialization, and are much more concentrated on high tech manufactures. Moreover they are doing very well in both innovation, diffusion and intangible accumulation.
Larger Developed NISs
Developed NISs
High Tech Smaller NISs Services Oriented NISs
NISs
Natural Resources Based NISs Catching Up NISs Structuring NISs
Developing NISs
Emerging NISs Unformed NISs
Dr. Shahram Yazdani
Finland, Ireland, Netherlands, Singapore, Sweden, Switzerland
Larger Developed NISs
Developed NISs
High Tech Smaller NISs Services Oriented NISs
NISs
Natural Resources Based NISs Catching Up NISs Structuring NISs
Developing NISs
Emerging NISs Unformed NISs
Dr. Shahram Yazdani
Economies tend to be very specialized in quite different types of production, ranging from low to high tech, and their services sectors play a very significant role in their international specialization.
Larger Developed NISs
Developed NISs
High Tech Smaller NISs Services Oriented NISs
NISs
Natural Resources Based NISs Catching Up NISs Structuring NISs
Developing NISs
Emerging NISs Unformed NISs
Dr. Shahram Yazdani
Denmark, Belgium, Luxembourg, Hong Kong
Larger Developed NISs
Developed NISs
High Tech Smaller NISs Services Oriented NISs
NISs
Natural Resources Based NISs Catching Up NISs Structuring NISs
Developing NISs
Emerging NISs Unformed NISs
Dr. Shahram Yazdani
Economies characterized by good natural resources endowments (grazing land, oil and other minerals,...) and which display an international specialization reflecting that fact. When comparing with other developed NISs, these systems tend not to perform very well both on innovation and diffusion.
Larger Developed NISs
Developed NISs
High Tech Smaller NISs Services Oriented NISs
NISs
Natural Resources Based NISs Catching Up NISs Structuring NISs
Developing NISs
Emerging NISs Unformed NISs
Dr. Shahram Yazdani
Australia, New Zealand, Norway, Austria, Canada, Spain
Larger Developed NISs
Developed NISs
High Tech Smaller NISs Services Oriented NISs
NISs
Natural Resources Based NISs Catching Up NISs Structuring NISs
Developing NISs
Emerging NISs Unformed NISs
Dr. Shahram Yazdani
Larger Developed NISs
Developed NISs
High Tech Smaller NISs Services Oriented NISs
NISs
Natural Resources Based NISs Catching Up NISs Structuring NISs
Developing NISs
Emerging NISs Unformed NISs
Dr. Shahram Yazdani
Larger Developed NISs
Developed NISs
High Tech Smaller NISs Services Oriented NISs
NISs
Natural Resources Based NISs Catching Up NISs Structuring NISs
Developing NISs
Emerging NISs Unformed NISs
Dr. Shahram Yazdani
Hungary, Czech Republic, Malaysia, Malta, Slovenia, Slovak Republic, Estonia, Greece, Lithuania, Latvia, Poland, Portugal, Ukraine
Larger Developed NISs
Developed NISs
High Tech Smaller NISs Services Oriented NISs
NISs
Natural Resources Based NISs Catching Up NISs Structuring NISs
Developing NISs
Emerging NISs Unformed NISs
Dr. Shahram Yazdani
Argentina, Brazil, Bulgaria, Chile, China, Columbia, Cyprus, Egypt, India, Indonesia, Mexico, Peru, Philippines, Russia, South Africa, Romania, Thailand, Turkey, Venezuela
Larger Developed NISs
Developed NISs
High Tech Smaller NISs Services Oriented NISs
NISs
Natural Resources Based NISs Catching Up NISs Structuring NISs
Developing NISs
Emerging NISs Unformed NISs
Dr. Shahram Yazdani
Larger Developed NISs
Developed NISs
High Tech Smaller NISs Services Oriented NISs
NISs
Natural Resources Based NISs Catching Up NISs Structuring NISs
Developing NISs
Emerging NISs Unformed NISs
Dr. Shahram Yazdani
Algeria, Bangladesh, Congo, Ethiopia, Iran, Kenya, Sudan, Myanmar, Nigeria, Pakistan, Tanzania, Viet Nam, Colombia,
Basic Research
Applied Research
Product Design & The Activity Development
Manufacturing
Dr. Shahram Yazdani
Propositional Prescriptive Knowledge Knowledge Basic Research
Applied Research
Engineering Prototype
Pre-production The Outcome Prototype
Product Design & The Activity Development
Product
Manufacturing
Dr. Shahram Yazdani
Business Plan Propositional Prescriptive Knowledge Knowledge Basic Research
Applied Research
Engineering Prototype
New Firm
Pre-production The Outcome Prototype
Product Design & The Activity Development
Mature SME The Firm
Large Company
Product
Manufacturing
Dr. Shahram Yazdani
Researcher
Inventor
Entrepreneur Business Plan
Propositional Prescriptive Knowledge Knowledge Basic Research
Applied Research
Engineering Prototype
The Role New Firm
Pre-production The Outcome Prototype
Product Design & The Activity Development
Businessman Mature SME The Firm
Large Company
Product
Manufacturing
Dr. Shahram Yazdani
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