NIS from the point of
Institutional angle
Ebru BAŞAK AKÖZ
Outline
•Development and diffusion of the concept NIS
•Definitions of NIS
•Narrow vs. Broad NIS
•Systemic approach to i...
Introduction
The concept of institution-used in a very comprehensive sense-plays a
key role in all definitions of Innovati...
Development and diffusion of the concept NIS
• Historical roots (Friedrich List,1841) - ’national systems of production’ -...
From Linear Model of Innovation to Systems
Approach
One of the first frameworks developed for understa...
From Linear Model of Innovation to Systems
Approach
In reality, this translation doesn’t follow a ‘linear’...
Theoretical perspective on innovation and learning:
(Lundvall, 2003)
• Innovation is a process that ...
Innovation System
Innovation System - a system for
generating and diffusing new
technologies - every country ha...
Definitions of NIS
‘the network of institutions in the public and private sectors whose
activities and interactions ini...
Definitions of NIS
“That set of distinct institutions which jointly and
individually contribute to the development and
...
Definitions of NIS
C.Edquist (1997) - includes “all important economic, social,
political, organizational, institutiona...
Narrow vs. Broad NIS
An analytical distinction has been made between a “narrow” NIS concept, which
includes the institutio...
Narrow vs. Broad NIS
The broad definition of NIS includes, in addition to the components
within the narrow NIS, all econom...
Systemic approach to innovation
According to Ingelstam (2002):
1. a system consists of two kinds of constituents: there ar...
A changing framework for innovation policy :
National System of Innovation (Nauwelaers, 2003)
• Increased awareness of...
Innovation processes are path-dependent
• Evolutionary characteristics - we do not know
whether the potentially best or...
Figure 1: Indicative Issues, Actors and Activities
in a Simple Science, Technology and Innovation System
...
National System of Innovation
M a c ro e c o n ...
Dimensions of Systems Approach
• System boundaries
• Organizations
• Institutions
• Knowledge
• Dynamics
• Ou...
Institutions(Edquist and Johnson 1997)
• The term ‘institution’ is used in at least
two main senses in the literature a...
Elements in the system of innovation
Organizations (Players or actors): firms (normally
considered to be the most impor...
Institutions & Organizations(Edquist and Johnson 1997)
• Institutions are sets of common habits, routines,
establishe...
What Institutions do for ?
• acquire, diffuse, assimilate and utilize new technologies
• improve existing products, and de...
The Functions of Institutions in relation to Innovation
Provide information Manage conflicts and
and reduce un...
Provide information and reduce uncertainty
• The most basic and the same time general function of
institutions
• Reduce...
Manage conflicts and cooperation
• Institutions control and regulate conflicts and cooperation
between individuals and ...
Provide Incentives
• To specify and implement the sticks and carrots of
economic life.
• Pecuniary Incentives: Salary a...
Channel resources to innovation activities
• Some resources are allocated by institutions or at least
affected by insti...
Institutions as obstacles to innovation
• Institutions may introduce stability, even rigidity into the
economy
• May ac...
Activities in the system of innovation
proposed by Chaminade, Edquist, 2005
I. Provision of knowledge inputs to the...
Activities in the system of innovation
proposed by Chaminade, Edquist, 2005
III. Provision of constituents for IS...
Activities in the system of innovation
proposed by Chaminade, Edquist, 2005
IV. Support services for innovation fir...
Institutional Policies
Provide an insight into what governmental priorities are and
how governments attempt to dictat...
Institutional Policies
Such policies:
stress the role of joint research activities and other technical
collaboration a...
Systemic problems mentioned in the literature include :
• infrastructure provision and investment, including the physica...
Conclusions-1
• Effectiveness of innovation systems depends on balanced
combination of 3 capacities :
– creation of k...
Conclusions-2
• Danger of fragmentation of innovation policy : need
for intra-government policy coordination
• More eff...
Conclusions-3
•Institutions reflect characteristics of the innovation process:
“… the institutional form which chara...
Turkish National Innovation System
Comments/Suggestions?
Main developments in our understanding of innovation
• From individual entrepreneur to corporate innovator
• From laissez...
Main developments in our understanding of innovation
• From neo-classical to evolutionary economics
• From optimising f...
References
Edquist, C. (1997). Systems of Innovation: Technologies, Institutions and Organizations. London: Pinter.
Edquis...
National Innovation Systems & Institutions
National Innovation Systems & Institutions
of 45

National Innovation Systems & Institutions

National Innovation Systems & Institutions
Published on: Mar 3, 2016
Published in: Technology      
Source: www.slideshare.net


Transcripts - National Innovation Systems & Institutions

  • 1. NIS from the point of Institutional angle Ebru BAŞAK AKÖZ
  • 2. Outline •Development and diffusion of the concept NIS •Definitions of NIS •Narrow vs. Broad NIS •Systemic approach to innovation •Elements in the system of innovation •The Functions of Institutions •Provide information and reduce uncertainty •Manage conflicts and cooperation •Provide Incentives •Channel resources to innovation activities •Institutions as obstacles to innovation •Activities in the system of innovation •Conclusion
  • 3. Introduction The concept of institution-used in a very comprehensive sense-plays a key role in all definitions of Innovation Systems. The main purpose of this study is to address the main elements of National Innovation Systems from an Institutional framework. The main components of the NIS, how the organizations and institutions are defined, and what functions do they have, and why a NIS differs on the structure and setting of these components are the questions aimed to be answered. Therefore a brief explanation of the definition, concept and emergence of NIS were conducted. The main objective of this analysis is to understand how and why the institutional settings and organizational structures explain the main characteristics of NIS.
  • 4. Development and diffusion of the concept NIS • Historical roots (Friedrich List,1841) - ’national systems of production’ - a wide set of national institutions including those engaged in education and training as well as infrastructures such as networks for the transport of people and commodities • Freeman 1982 and Lundvall 1985 – National Innovation System • innovation process should be treated in a systematic manner - need for systemic approach, which integrates institutions to create, store, and transfer the knowledge, skills and artefacts. (OECD,1999) • understanding innovation as a complex interactive learning process • learning is important => key element in both the dynamics of the system and as a key agent in binding the whole system together. • comparative - could not be an ideal NIS, which fits different nations with their specific socio-economic, political and cultural background.
  • 5. From Linear Model of Innovation to Systems Approach One of the first frameworks developed for understanding S&T and its relation to economy has been the “linear model of innovation” Model postulates that innovation starts with basic research, then adds applied research and development, and ends with production and Marketing.
  • 6. From Linear Model of Innovation to Systems Approach In reality, this translation doesn’t follow a ‘linear’ path from basic to applied R&D and implementation. Instead, it is characterized by complicated feedback mechanisms and interactive relations involving science, technology, learning, production, policy and demand. Continuous interactivity between; • Industry, • Universities, • Public Research Centres, • Government • Suppliers, • Clients, • Standard setting bodies, • Banks • and other critical social and economic actors.
  • 7. Theoretical perspective on innovation and learning: (Lundvall, 2003) • Innovation is a process that is: – Cumulative – Nonlinear – Path dependent – Context dependent – Continuous – Interactive – Firms do seldom innovate alone – Innovation and learning • You learn from what you do – Innovation as joint production of innovation and competence – Learning is a socially embedded process – social capital is important
  • 8. Innovation System Innovation System - a system for generating and diffusing new technologies - every country has such a system, even if it is weak or low in capacity.
  • 9. Definitions of NIS ‘the network of institutions in the public and private sectors whose activities and interactions initiate, import, modify and diffuse new technologies’. (C. Freeman 1987, p. 1) “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” (Lundvall, 1992; p.12) “A set of institutions whose interactions determine the innovative performance of national firms” (Nelson, Rosenberg, 1993; p.5) “The national institutions, their incentive structures and their competencies, that determine the rate and direction of technological learning (or the volume and composition of change- generating activities) in a country” (Patel and Pavitt, 1994; p.12)
  • 10. Definitions of NIS “That set of distinct institutions which jointly and individually contribute to the development and diffusion of new technologies and which provides the framework within which governments form and implement policies to influence the innovation process. As such it is a system of interconnected institutions to create, store and transfer the knowledge, skills and artifacts which define new technologies” (Metcalfe, 1995;p.462-463)
  • 11. Definitions of NIS C.Edquist (1997) - includes “all important economic, social, political, organizational, institutional and other factors that influence the development, diffusion and use of innovations” Galli, Teubel (1997)- “a historically grown subsystem of the national economy in which various organizations and institutions interact and influence each other in the carrying out of innovative activity”. NIS as the set of organizations, institutions, and linkages for the generation, diffusion, and application of scientific and technological knowledge operating in a specific country .
  • 12. Narrow vs. Broad NIS An analytical distinction has been made between a “narrow” NIS concept, which includes the institutions and policies directly involved in scientific and technological innovation, and a “broad” NIS perspective, which takes into account the social, cultural, and political environment of the country being examined. Narrow context, can be divided into five main categories: • Governments (local, regional, national and international, with different weights by country) that play the key role in setting broad policy directions; • Bridging institutions, such as research councils and research associations, which act as intermediaries between governments and the performers of research; • Private enterprises and the research institutes they finance; • Universities and related institutions that provide key knowledge and skills; • Other public and private organizations that play a role in the national innovation system (public laboratories, technology transfer organizations, joint research institutes, patent offices, training organizations and so on). (OECD 1999)
  • 13. Narrow vs. Broad NIS The broad definition of NIS includes, in addition to the components within the narrow NIS, all economic, political and other social institutions affecting learning, searching and exploring activities: a nation’s financial system its monetary policies the internal organization of private firms the pre-university educational system labor markets Regulatory policies and institutions
  • 14. Systemic approach to innovation According to Ingelstam (2002): 1. a system consists of two kinds of constituents: there are firstly, some kinds of components and secondly, there are relations among them. The components and relations should form a coherent whole (which has properties different from the properties of the constituents); 2. the system has a function – that is, it is performing or achieving something; 3. it must be possible to discriminate between the system and the rest of the world; that is, it must be possible to identify the boundaries of the system. If we, for example, want to make empirical studies of specific systems, we must, of course, know their extension.
  • 15. A changing framework for innovation policy : National System of Innovation (Nauwelaers, 2003) • Increased awareness of the role of innovation as crucial ingredient for economic development • Interactive view of innovation: innovation differs from R&D • System-based approach to innovation, emphasis on learning and diffusion / absorption of knowledge • Mobility of tacit knowledge embedded in humans becomes a key performance factor • Glocalisation : localised nature of (tacit) knowledge spillovers - importance of global connections .
  • 16. Innovation processes are path-dependent • Evolutionary characteristics - we do not know whether the potentially best or optimal path is being exploited. • The system never achieves equilibrium, and the notion of optimality is irrelevant in an innovation context. We cannot specify an ideal or optimal innovation system • Comparisons between an existing system and an ideal or optimal system are not possible, instead comparison with the other countries is available. • Instead of market failure the term systemic problems or systemic failures are used.
  • 17. Figure 1: Indicative Issues, Actors and Activities in a Simple Science, Technology and Innovation System Social and Absorptive Capacity Human Capital ‘Follower’ firms; Knowledge Intermediate and Users Universities S&T Training End Consumers and and Education Professional Users Market for Goods and Services Research Capacity Technology and Knowledge Universities; Govt Innovation Creators Laboratories Performance Basic Scientific ‘Creative’ Firms Research Applied RTD and Product /Process Development Public Private Sector Sector
  • 18. National System of Innovation M a c ro e c o n o m ic a n d re g u la to ry c o n te x t E d u c a tio n a n d C o m m u n ic a tio n tra in in g s y s te m in fra s tru ctu re s G lo b a l in n o v a tio n n e tw o rk s K n o w le d g e g e n e ra tio n , d iffu s io n & u s e Clusters of industries innovatoin systems F irm s ’ c a p a b ilitie s Regional & n e tw o rk s O th e r S c ie n c e re s e a rc h s y s te m b o d ie s S u p p o rtin g in s titu tio n s N a tio n a l in n o v a tio n s y s te m C o rp o ra te g o v e rn a n c e P ro d u ct a n d fa c to r a n d fin a n c e m a rke t c o n d itio n s N a tio n a l in n o v a tio n c a p a city COUNTRY PERFORM ANCE G ro w th , jo b c re a tio n , c o m p e titiv e n e s s
  • 19. Dimensions of Systems Approach • System boundaries • Organizations • Institutions • Knowledge • Dynamics • Outcome / performance • Methodology
  • 20. Institutions(Edquist and Johnson 1997) • The term ‘institution’ is used in at least two main senses in the literature and these senses are often also confused in the literature. – For Nelson and Rosenberg , institutions are basically different kinds of organisations – Lundvall means the rules of the game by the term institution
  • 21. Elements in the system of innovation Organizations (Players or actors): firms (normally considered to be the most important organizations in SI’s), universities, venture capital organizations and public agencies responsible for innovation policy etc. Institutions(Rules of the game): are “sets of common habits, norms, routines, established practices, rules or laws that regulate the relations and interactions between individuals, groups and organizations,” (Edquist & Johnson, 1997).
  • 22. Institutions & Organizations(Edquist and Johnson 1997) • Institutions are sets of common habits, routines, established practices, rules, or laws that regulate the relations and interactions between individuals, groups and organisations. They are the rules of the game. Examples of important institutions in SIs are patent laws and norms influencing the relations between universities and Firms. • Organizations are formal structures with an explicit purpose and they are consciously created. They are players or actors. Some important organisations in SIs are companies (which can be suppliers, customers or competitors in relation to other companies), universities, venture capital organisations and public innovation policy agencies.
  • 23. What Institutions do for ? • acquire, diffuse, assimilate and utilize new technologies • improve existing products, and design new ones • design and produce the means of production or capital goods required by the improved or newly designed production processes • maintain technological R&D activity that feeds the mentioned improvement, design and production processes; and ability to conduct scientific research -i.e. basic research- that is the source of those technologies • improve existing organization methods [soft technologies] arranging the relations within and between research, development, design, production (manufacturing), and marketing compartments and reproducing those relations at a technologically higher level. To : • survive the vividness of national economy, • sustain economic growth, • upgrade the living standards • achieve international competitive advantage
  • 24. The Functions of Institutions in relation to Innovation Provide information Manage conflicts and and reduce uncertainty cooperation Institutions Channel resources to Provide Incentives innovation activities Institutions as obstacles to innovation
  • 25. Provide information and reduce uncertainty • The most basic and the same time general function of institutions • Reduce uncertainity about the behaviour of other people by providing information or reducing the amount of information needed • Act as signposts and reduce the informational and computational burden • Technological service systems reduce uncertainity about technical solutions • Patent laws and other intellectuel property rights reduce uncertainity about appropriation possibilities
  • 26. Manage conflicts and cooperation • Institutions control and regulate conflicts and cooperation between individuals and groups. • An institutional set-up that effectively redistributes the costs of change and compensates the victims also supports fast rates of innovation. • Social security arrangements, education and retraining rights, labor market arrangements and other institutions shape the character and seriousness of such conflicts and resistance to change
  • 27. Provide Incentives • To specify and implement the sticks and carrots of economic life. • Pecuniary Incentives: Salary and wage schemes, income taxes, tax allowances and inheritance rules affect innovative effort • Property rights to knowledge and ideas (laws and rules concerning patents, copyrights,trademarks,etc) are also important as incentives since they permit appropriation of temporary technological rents and affect the diffusion of knowledge • Non-Pecuniary Incentives: norms of cooperation, practices for acquiring intellectual prestige, access to publication, status norms
  • 28. Channel resources to innovation activities • Some resources are allocated by institutions or at least affected by institutions • R&D may be supported by formal institutions like tax rules and government subsidies • Governments and industry organizations make long term commitments in terms of agreement to finance technological service systems • Governments are also committed through informal norms and traditions to allocate resources to universities, Research Institutes, libraries and other organisations involved in learning and innovation.
  • 29. Institutions as obstacles to innovation • Institutions may introduce stability, even rigidity into the economy • May act as innovation brakes rather than accelerators • Institutional change is often supposed to be slow and lag behind technological change • This may cause mismatch problems which prevent the full realization of the productivity potantials of technical innovations. • Forestall the reallocation of resources and efforts from mature to emerging technologies
  • 30. Activities in the system of innovation proposed by Chaminade, Edquist, 2005 I. Provision of knowledge inputs to the innovation process 1. Provision of R&D - creating new knowledge, primarily in engineering, medicine and the natural sciences. 2. Competence-building (provision of education and training, creation of human capital, production and reproduction of skills, individual learning) in the labor force to be used in innovation and R&D activities. II. Provision of markets – demand-side factors 3. Formation of new product markets. 4. Articulation of quality requirements emanating from the demand side with regard to new products
  • 31. Activities in the system of innovation proposed by Chaminade, Edquist, 2005 III. Provision of constituents for IS 5. Creating and changing organizations for the development of new fields of innovation (e.g.enhancing entrepreneurship to create new firms and intrapreneurship to diversify existing firms, creating new research organizations, policy agencies, etc.) 6. Provision (creation, change, abolition) of institutions (e.g. IPR laws, tax laws, environment and safety regulations, R&D investment routines, etc) - influencing innovating organizations and innovation processes by providing incentives or obstacles to innovation. 7. Networking via markets and other mechanisms, incl. interactive learning between organizations (potentially) involved in the innovation processes. Integrating new knowledge elements developed in different spheres of the SI and coming from outside with elements already available in the innovating firms.
  • 32. Activities in the system of innovation proposed by Chaminade, Edquist, 2005 IV. Support services for innovation firms 8. Incubating activities (e.g. providing access to facilities, administrative support, etc. for new innovating efforts). 9. Financing of innovation processes and other activities that can facilitate commercialization of knowledge and its adoption. 10. Provision of consultancy services of relevance for innovation processes, for example, technology transfer, commercial information and legal advice.
  • 33. Institutional Policies Provide an insight into what governmental priorities are and how governments attempt to dictate institutional behavior to guide the system. For policy-makers, an understanding of the national innovation system can help identify leverage points for enhancing innovative performance and overall competitiveness. seek to improve networking among the actors and institutions in the system Policies directed to networking and improving firm absorptive capacities are needed to address systemic failures
  • 34. Institutional Policies Such policies: stress the role of joint research activities and other technical collaboration among enterprises and with public sector institutions; schemes to promote research and advanced technology partnerships with government give prominence to high levels of co-patenting, co-publication and personnel mobility, and implement intellectual property rules, labor market policies and exchange programmes to facilitate such collaboration. recognize the importance of informal flows of knowledge and access to technical networks; supportive information technology policies and infrastructures seek to augment innovation networks and to design these flows, linkages and partnerships in the most efficient manner. Enhance the innovative capacity of firms
  • 35. Systemic problems mentioned in the literature include : • infrastructure provision and investment, including the physical (IT, telecom, transport) and scientific infrastructure (universities, labs) • transition problems – the difficulties that might arise when firms and other actors face technological problems or changes in the prevailing technological paradigms that exceed their current capabilities • lock-in problems, derived from the socio-technological inertia, that might hamper the emergence and dissemination of more efficient technologies • hard and soft institutional problems, linked to formal rules (regulations, laws) or no formal (such as social and political culture) • network problems, derived from linkages too weak or too strong (blindness to what happens outside the network) in the NIS; • capability problems, linked to the transition problems, referring to the limited capabilities of firms, specially SMEs, their capacity to adopt or produce new technologies over time. Smith, 2000; Woolthuis, Lankhuizen et al., 2005
  • 36. Conclusions-1 • Effectiveness of innovation systems depends on balanced combination of 3 capacities : – creation of knowledge – diffusion of knowledge – absorption of knowledge – Utilization of knowledge • Government’s role shifts from investor to facilitator - promotion of public/private partnerships and interface management • Growing importance of framework conditions – entrepreneurship – competition rules – labour market conditions – social capital, ...
  • 37. Conclusions-2 • Danger of fragmentation of innovation policy : need for intra-government policy coordination • More efficiency through “Policy packages” rather than isolated instruments • Need for more policy intelligence – monitoring and evaluation of policies – sound analyses of innovation systems – « intelligent » benchmarking practices – long term views – inclusive policy design processes
  • 38. Conclusions-3 •Institutions reflect characteristics of the innovation process: “… the institutional form which characterizes these relationships – and, especially, the elements of organization in these markets – reflects the characteristics of the process of innovation” •The institutional set-up, once established, will affect the rate and direction of innovation •Production system and the institutional set-up define a system of innovation: production structure, and the institutional set-up jointly define a system of innovation and at the same time provide an understanding of the micro-foundation of ‘national systems of innovation’” B.-Å. Lundvall (1992), National Systems of Innovation. Towards a Theory of Innovation and Interactive Learning
  • 39. Turkish National Innovation System
  • 40. Comments/Suggestions?
  • 41. Main developments in our understanding of innovation • From individual entrepreneur to corporate innovator • From laissez faire to government programmes • From single division to multidivisional efforts • From science push to demand pull? • From single factor to multi-factor explanations of innovation • From static to dynamic model of innovation • From linear model to interactive ‘chain-link’ model • From one innovation process to several sectoral- specific types
  • 42. Main developments in our understanding of innovation • From neo-classical to evolutionary economics • From optimising firm to resource based view of the firm • From individual actors to systems of innovation • From market failure to system failure • From one to ‘two faces’ of R&D • From single-technology to multitechnology firms • From closed to open innovation • From national to multi-level systems of innovation • From R&D management to innovation leadership
  • 43. References Edquist, C. (1997). Systems of Innovation: Technologies, Institutions and Organizations. London: Pinter. Edquist, C., & Johnson, B. (2000). Systems of Innovation: Growth, Competitiveness and Employment, Volume 2, Chapter 8, pp. 165–187. Cheltenham: Elgar Publishing. Freeman, C. (1987). Technology and Economic Performance: Lessons from Japan. London: Pinter. Freeman, C. (1995). The national innovation systems in historical perspective. Cambridge Journal of Economics , 19 (1), 5-24. Godin, B. (2007). National Innovation System: The System Approach in Historical Perspective. Montreal: Project on the History and Sociology of STI Statistics, Working Paper No. 36. Godin, B. (2005). The Linear Model of Innovation: the Historical Construction of an Analytical Framework. Montreal: Project on the History and Sociology of STI Statistics, Working Paper No. 30. Johnson, B., & Gregersen, B. (1994). System of innovation and economic integration. Journal of Industry Studies , 2, 1–18. Lundvall, B.-Å. (2000). 'Introduction', in Edquist, C. and McKelvey, M. (eds) Systems of Innovation: Growth, Competitiveness and Employment, An Elgar Reference Collection. Cheltenham: Edward Elgar. Lundvall, B.-Å. (1992). National Innovation Systems: Towards a Theory of Innovation and Interactive Learning. London: Pinter. Lundvall, B.-Å., Johnson, B., Andersen, E. S., & Dalum, B. (2002). National systems of production, innovation and competence building. Research Policy , 31, 213-231. Metcalfe, S. (1995). "The Economic Foundations of Technology Policy: Equilibrium and Evolutionary Perspectives", in P. Stoneman (ed.) Handbook of the Economics of Innovation and Technological Change. Oxford (UK)/Cambridge (US): Blackwell Publishers. Nelson, R. R. (1993). National Innovation Systems. A Comparative Analysis. New York/Oxford: Oxford University Press. OECD. (1999). Managing National Systems of Innovation. Paris: OECD. OECD. (1997). National Innovation Systems. Paris. Patel, P., & Pavitt, K. (1994). The Nature and Economic Importance of National Innovation Systems. Paris: STI Review, OECD. Woolthuis, R. K., Lankhuizen, M., & Gilsing, V. (2005). A system failure framework for innovation policy design. Technovation , 25, 609–619. Freeman, C. (1987) Technology Policy And Economic Performance: Lessons From Japan (London: Pinter). Groenewegen, J., Van der Steen, M (2006) The Evolution Of National Innovation Systems. Journal Of Economic Issues. (2) 277-285 Lundvall, B.-A°., Johnson, B., Andersen, E.S., Dalum, B. (2002) National Systems Of Production Innovation And Competence Building. Research Policy (31) 213- 231 Lundvall, B.-A° . (Ed.) (2007) National Systems Of Innovation. Industry And Innovation (1) 95-119 OECD (1997a), “National Innovation Systems”, Paris: OECD.

Related Documents