the role of the institutional level: three functions of innovation systems ip inno-natour 2010,...
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The Role of the Institutional Level: Three Functions of Innovation Systems
IP INNO-NATOUR 2010, SuceavaGerhard Weiss
Innovation
= successful introduction of novelties
Innovation System
“Set of institutions which jointly and individually
contributes 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”
(Metcalfe 1995)
Innovation System Model
Source: Arnold / Kuhlman 2001
Innovation Systems (IS)
Look at innovation processes not as linear but complex processes …
ProductIdea
Development
ProductTest
Marketing
Forest enterprise
Product-, Process Innovation
CustomerConsumer
LabourResourcesKnowledgeCapital
Extension,Consulting
MarketsCompetition
Research & Education
Administration, Interest groups
Innovation Systems (IS)
… are comprised of actors institutional background and their interaction;
Innovation Systems (IS)
Forest enterprise
Product-, Process Innovation
CustomerConsumer
LabourResourcesKnowledgeCapital
Extension,Consulting
MarketsCompetition
Research & Education
Administration, Interest groups
Innovation Systems (IS)
… comprise private and public actors
… and on different levels:
Innovation Systems (IS)
Owner, Manager, Employee
Forest holdings, incl. SBUs of Farm-forest enterprise
bäuerlichen Betriebes small Non- - farm enterprises
Cluster , Networks Vertical - /Horizontal co-operations
Administration, Interest groups
Research & Education Extension services
I nstitutional Level
Firm - Level
Personal Level
b2b / i2b
Innovation Systems (IS)
… and provide functions for the development of innovations:
Functions of IS
Forest HoldingsInnovation Activities
Information to reduce uncertainty
Pecuniary and Non-Pecuniary Incentives
Management of cooperation and conflicts
INNOVATION SYSTEM
Information Function
Information flows:Sources of ideas
- from which actors?- through which channels?
Sources of know-how- technical know-how- business know-how- organisational know-how- financing know-how
Coordination Function (1)
1. Business cooperation:Horizontal cooperation
- small or large forest holdings- for marketing/production/etc.
Vertical cooperation- along the wood-chain- along other production chains!
Coordination Function (2)
2. Coordination of actors:Coordination of public and private
actors and conflict resolution
- What is the quality of the contact?- Who initiated the contact?- Who helped in conflict resolution?
Incentive Function
Pecuniary and non-pecuniary incentives Financial flows:
Sources of financing- internal: own business cooperation- external:
private financial market (bank loan…) public funds
Role of public funds?
National Innovation System
„...the elements and relationships which interact in the production, diffusion and use of new, and economically useful knowledge (...) and are either located within or routed inside the borders of a nation state“ (Lundvall 1992)
Elements:
• Institutional structure
• Incentive system
• Capabilities and creativity of economic actors
• Cultural characteristics of a nation
Regional Innovation System
„geographical distinctive, interlinked [institutions
and] organizations supporting innovation and
those conducting it, mainly firms“ (Cooke et al.
1996)
Spatial and social proximity are important
conditions for the realisation of innovation
Facilitate exchange of knowledge, create learning
processes
Regional Innovation Systems
RIS are mainly characterized by actors located in a specific region rather than by a specific sector. Cross-sectoral.
Majority of functions of the innovation system are fulfilled by regional actors. Suitable for „territorial“services of
forests.
Sectoral Innovation System
„System of firms active in developing and making a sector‘s products and in generating and utilizing a sector‘s technologies“ (Breschi and Malerba 1997)
Particular combinations of opportunity and appropriability conditions
Particular degrees of cumulativeness of technological knowledge
Common knowledge base
Sectoral Innovation Systems
SIS comprise of actors of one specific sector and the majority of functions are fulfilled by these actors.
SIS in traditional, mature sectors support more process than product innovations and are strongly oriented at traditional business areas.
Example: Forestry SIS in Austria
Forestry SIS in Austria:Actor network on national level
0
2
4
6
8
10
12Ministry: Section Forestry
Ministry: Section rural development
University: forestry departments
Federal Forest Research I nstitution
Chamber / interest group(small forest holdings)
I nterest group: large forests
Foresters
Federal Govt. I nstitutions
0
2
4
6
8
10
12Ministry: Section Forestry
Ministry: Section rural development
University: forestry departments
Federal Forest Research I nstitution
Chamber / interest group(small forest holdings)
I nterest group: large forests
Foresters
Federal Govt. I nstitutions
SIS consists of a „traditional coalition“.
Is not in contact with NIS actors.
Lacks of intersectoral relations.
Forestry SIS in Austria:Actor network on national level
0
10
20
30Forestry
Woodworking industry
Agriculture
Energy sectorTourism
Water management
Other sectors
Actor network on provincial and district levels
Cross-sectoral interaction happens ad-hoc on the ground …
without strategic planning on higher administational levels.
Actor network on provincial and district levels
Case Study Analyses
1.
2.
3. Recreational Services: Forest Cottages - Almliesl
Enthusiasm alone doesn‘t make an innovation
4.
Forest Cottages „Almliesl“
Forest Cottages „Almliesl“
Content of the innovation: • Rents 12 forest cottages for tourists
in co-operation with a tourist agency • 1998: “Hüttenerlebnis Tirol”• 2001: Re-organisation - “Almliesl“
Carrier: • Österreichische Bundesforste AG
Austrian Federal Forest Company • Regional Forest Enterprise „Hopfgarten“
Forest Cottages „Almliesl“
Company characterisation: • Österreichische Bundesforste AG (ÖBf AG)
Austrian Federal Forest Company area: 850 000 ha yields: 2 Mio m3/year staff: 1350 employees sales: 150 Mio Euro/year
• Regional Forest Enterprise „Hopfgarten“ area: 35 000 ha yields: 80 000 m3/year staff: 46 employees sales: 7 Mio Euro/year
150 000 euro returns from tourism = 2%
Forest Cottages „Almliesl“
Chronology: 1998: Idea of a staff member “Hüttenerlebnis Tirol”
Enthusiastic realisation by regional enterprise manager
Renovation and improvement of 12 cottagesAdvertising activities (Adv. Agency/HMS)
1999/2000: crisislegal and financial problems
2001: Re-organisation• Re-evaluation by head office• New regional enterprise manager• Cooperation with tourist agency/brand „Almliesl“
Forest Cottages „Almliesl“
Actors:
Regional forest enterprise: Project carrier
Company head office: Re-organisation
Staff: Idea, partly in favour/partly critical
Authorities: Mayor; land use authority
Neighbours: Watch/may complain
Advertising agency: Concept I “Hüttenerlebnis”
Cottage rent service (HMS): “Hüttenerlebnis”
Tourist agency (MTS): Brand “Almliesl”
Forest Cottages „Almliesl“
Innovation: Idea: Rent complete house for tourists in rural landscape.
New to forest sector, not to rural area/agricultural sector; moderately developed market (e.g. “farm holidays”); well developed e.g. in Toskana/Italy
• No support by institutional system (not asked for)• No co-operation between regional/head office at start• No co-operation with tourist agency at start, later yes• Communication failures with staff• Decentral: idea and project management/
Central: re-organisation (calculation and concept)
Forest Cottages „Almliesl“
Potential: Demand: growing demand for holiday apartments; enduring trend for nature/wellness holidaysSupply: cottages exist in forest companies
! need for renovation/improvements potential conflicts with hunting business
find consensus/locate at borders of hunting districts limited acceptance by foresters/forest owners
preference for families (supply meets demand)
Forest Cottages „Almliesl“
Conclusions: Foresee the 4 C‘s!Concept: PM, business plan, financial calculation, legal assessmentCommunication:internal: * head office * staffexternal: * authorities * neighboursConsultation: use of in-house resources orprofessional consultants orextension services of the institutional systemCooperation:with professional partners (know-how and network)
Forest Cottages „Almliesl“
Conclusions: Foresee the 4 C‘s!
A Case
A Case: The TANNO house
Problem
A Case: The TANNO house
Problem
First financing attempt: Rural Development Funds
Second financing attempt: Regional Development F.
(Leader+ Region „Kraftspendedörfer Joglland“)
Idea
A Case: The TANNO house Actors:
ARGE Tanno: regional forest associations, saw-mill,
furniture manufactorer, wellness facilities (sauna),
pre-fab company, architect (Gemini).
Chamber of agriculture (regional office).
proHolz (timber marketing) – finding an architect
Rural and regional development funds coordination
offices (ILE; EU regional mngtmt)
Designer (on contractual basis for furniture design)
A Case: The TANNO house Results:
A number of products (pre-fab, furniture, sauna)
Modern design (house, furniture)
Modern technology (low energy house)
Sales have started
Several awards
Follow-up project: TANNO + Gemini technology
(plus energy house)
A Case: The TANNO house Conclusions:
Considerable time investments are necessary
and frustrations in the starting phase have to
be calculated!
Cross-sectoral cooperation takes a lot of time
but pays the effort!
Look out for „non-sectoral“ subsidies!
Conclusions
Results from INNOFORCE studies prove the importance of institutional level interactions and public and private institutional actors: Even in the case of very simple innovations that are mainly developed by one single company there are already many actors to be considered (e.g. authorities), or business cooperations that are recommended! Even more important in complex cases!
Recommendations – Institutional Level
Develop a comprehensive innovation policy for the forestry sector
Provide Information on New Markets and Improve Information Flows
Facilitate Cross-sectoral Co-ordination
Provide Incentives that Systematically Foster Innovation
Thank you
www.efi-innoforce.org