Norrköping 01042014

Tailoring the policy-mixes to the needs of priorities – state of the art in innovation policy research

Vesa Harmaakorpi

Professor of Innovation Systems

Dean of School of Industrial Engineering and Management

Lappeenranta University of Technology

Innovation modes

Science-based Science, technology, innovation (STI)

Practice-based Doing, using, interacting (DUI)

Berg Jensen et al. 2007

Types of knowledge production

Mode 1 knowledge production is traditional knowledge production based on single disciplines. It is homogeneous and primarily cognitive (STI).

Mode 2 knowledge knowledge production, by contrast, is created in broader, heterogeneous interdisciplinary social and economic contexts within an applied setting (DUI).

Gibbons et al. 1994

Science-based innovation (STI, Mode 1)

Practice-based innovation(DUI, Mode 2a)

Practice-based innovation (DUI, Moodi 2b)

Most typical logics and capital

Agglomeration – Clusters – Economies of scaleIntellectual capital – Financial capitalProximity

Related variety – Innovation platformsSocial capital – Institutional capital

Distance

Developing innovation capability – Breaking silos Social capital – Structural capital

”Near distance”Most typical innovation types and processes

Radical technological innovations and related conceptsAnalytical

Radical concepts and system innovations

Interpretative

Organisational innovations - Social innovations - Service innovations

InterpretativeMost typical innovation methods and environments and knowledge transfer mechanism

Scientific methods

World class scientific centres

Technology diffusion for the firms of clusterScience and related expertise

Methods of intellectual cross-fertilisation (also virtual)Arenas of intellectual cross-fertilisation in value networksScanning and absorbing technology and market signalsNetworks, Serendipity, Customers

Problem-based learning (e.g. culture-based methods)Arenas of developing organisational innovation capabilityOrganisational learning

”Normal” staff, Customers

Most typical logics of knowledge production

World classic scientific expertise in narrow fieldCodifield knowledgeAnalyticalHomogeneous knowledge production

Brokering – General ability to build possible worldsFuture-oriented SyntheticHeterogeneous knowledge production

Brokering – General ability to build possible worldsTacit knowledgeSymbolicHeterogeneous knowledge production

Most typical communication

Integrative Dissipative Dissipative

Most typical evaluation

Input-type measuresOutput-type measures

Dynamic measures Dynamic measures

Differences in science-basedand practice-based innovation

Bringing STI- and DUI-modes together

Mode 2 knowledge production -> DUI-mode of innovation

Mode 1 knowledge production -> STI-mode of innovation

Context of knowledge application(companies and public sector organizations)

Policy instruments and tools aiming at promoting knowledge transfer and utilization

Global threat of sustainable value creation

− ”Triple debt”1. Ecological: Natural resources are 1,5 times over-utilized.

2. Economic: Europe, countries and municipalities are living on credit. We are eating from the plates of our children.

3. Social: People feel bad under growing pressure.

Weakened competitiveness of companies, public sector and society.

Preventing the triple debt is offers business opportunities for regions.

Areas and challenges of sustainable value creation

− Development of innovation systems − Innovation systems cannot respond to the challenges of open innovation− Insufficient dialogue between science and practice leads to unnecessary use of

limited resources− Exploitation of innovation potential is weak

− Development of management and processes − Productivity is taken from people not processes− Knowledge in organizations is poorly utilized. − Benefits of networks are not used

− Development of ICT− ICT is seen only from a technical point of view, not as part of business processes− ICT is not applied in novel ways− Openness is just on the way, closed systems prevent open innovation

Our response: Productivity innovations

“Productivity is not everything but in the long run it is almost everything” (Krugman 1994)

“Production and use of knowledge is at the core of value-added activities, and innovation is at the core of growth” (Archibugi and Michie 1995)

“Europe suffers of productivity gap preventing sustainable growth“ (EU)

“80% of growth is explained by increased productivity; 80% of the increased productivity is explained by innovation” (Cooke, 2005)

Development of Innovation Systems

Development ofManagement and

Processes

Development ofICT

PRODUCTIVITYINNOVATIONS

(Geels & Schot, 2007)

Transformation

Tools of Change

Intellectual cross-fertilizationUser-driven processesMaking visible out of invisible

Drivers of Change

Triple debt: environmental, economic, socialNew innovation philosophyGlobally networked digital society

Structural silos Central planning Slow path-

dependent development

Old Mode of Management Ability to build possible

worlds Crowding and experiments Peer progressives

New Mode of Management

Final words

The concept of regional innovation policy has to be rethought based on Modes of innovation Consequencies of triple debt Regional strengths and global niches including proper interaction

within the global context Smart specialisation is the European way to lead the transformation

process There is a great demand for proper road-maps and monitoring tools

in the regional processes

Book on practice-based innovation

Melkas, H. & Harmaakorpi, V. (eds.) (2012). Practice-based Innovation. Insights, Applications and Policy Implications. Axel Springer Verlag.