Rethinking science, technology and innovation policy: understanding performers and context

Invited presentation Department of Science and Technology, HSRC and CPUT Science Seminar: Linking knowledge producers and marginalised communities 15 November 2013, Cape Town, South Africa Professor Gillian Marcelle Wits Business School

Outline

• Innovation re-imagined • Innovation dynamics as a contributor to sustainable human development – Enterprise level – Macro level issues • Summary and concluding remarks

Section 2

INNOVATION (RE)IMAGINED

CRITICAL PERSPECTIVE

• Participatory approaches to development are inherently superior to the more technocratic and authoritarian approaches.

•A more realistic and relevant definition of innovation is needed to guide policy •Issues of power, control and ownership of resources, and governance in the innovation process need to be contextualised.

Foundational Issues

• There are a number of strong, commonly occurring biases in innovation • Mindset is among several other cultural, psychological and societal dimensions of innovation requiring more attention • Development outcomes are not automatically produced in STI interventions

Inherent Biases

• Techno centric conceptions of social and institutional change • Novelty • High science and technology content • Lone hero and mythical figure • De-emphasis on ethical dimensions • Insistence on standard metrics

• • • • • • • • • •

Drivers of Innovation

Advancing technology Changing environment Changing industrial structures and strategies Evolving society Evolving customer desires Competitors improve their products, processes and services Customers stop buying your old products and services so you need to replace them and add new products and services • • • • • • • • Technology is changing fast, new products come from new competitors Fast changing environment, product lifetimes shorter, need to replace products sooner Products are increasingly difficult to differentiate Customers are more sophisticated, segmented and demanding, and expect more in terms of customization, newness, quality and price Customers have more choice New technologies no-one understands Apparently separate technologies come together Markets forming and changing fast With markets and technology changing fast, and good ideas quickly copied, there is continual pressure to devise new and better products, processes and services faster

Innovation defined

• Innovation is an intentional process of generating, acquiring and applying knowledge for economically and socially beneficial purposes, which in developing countries typically takes place through the efficient unfolding of various learning processes, rather than being determined by the mastery of science and technological knowledge. This process requires financial and other resources including cultural and social capital. Deftly undertaken innovation can lead to the transformation of systems, values and culture as well as the production of new and/or improved products or processes.

(Marcelle 2013, 2012, 2011 b, c, and 2004).

Understanding innovation

• Innovation has occurred when any aspect (e.g. functionality, usefulness, affordability, aesthetic value) of a product, process, service or experience is changed so that it provides an improved solution to an existing need or challenge. In some instances, this can also take the form of completely new or transformed products, processes services or experiences that did not hitherto exist. • Incremental innovation involves small improvements and extensions to existing products, processes and services. The target is to increase efficiency - higher quality, reduced times and lower costs. For an incrementally new product the customer is known and the technology does not radically depart from conventional practice.

• Radical innovation involves major change. Typically there are unknowns concerning both customer and technology

Fundamentals

• Novelty vs Value ( outcomes and impacts) • Process vs outputs • Time dimension • Uncertainty and risk • Context specificity

Definition as critique

• Offers a critique of science-centric views in which innovation is considered to be concerned with generating technological novelties through the process of accumulated investment in formal centralized research and development (R&D) or purchase of technological imports. • Characterises the process of innovation as being a complex, non-linear, interactive, full of uncertainty and must be managed through intentional effort and investment (Mowery and Rosenberg 1979; Dosi 1982; Perez 2004, and Srinivas and Sutz 2008).

ENTERPRISE LEVEL PERSPECTIVES

Key Issues

• • • Innovation is not = R&D Innovation requires investment, takes place over time through an uneven process involving risk and uncertainty Innovation does not guarantee competitive success • • • Innovative enterprises have people who are confident, free to experiment and have their learning supported.

Innovative enterprises have processes for integrating learning across all functions and for aligned learning with overall business strategy. The nature of the innovation process is highly influenced by context, therefore large enterprises operating in the formal sector perform innovation rountines differently from those in the informal sector

Effective innovation strategies

•

Investment

in technological hardware, technical personnel, training, skills development and other learning routines. • Implementation of

specific management routines

learning. – Specialist roles for innovation management – Supportive Culture – Formal Scan and Search to support technological • Managing

boundary relationships

Marcelle, G M Technological Learning Edward Elgar (2004)

Ideal-type TCB System

Unbalanced TCB system

The missing piece

• We know very little about how innovation is performed and optimised in settings characterised by informality and resource scarcity......Jugaad, reverse, grassroots, frugal, resource-constrained, BoP, inclusive innovation literature is emerging but from two directions: Northern business schools or public policy rather than efforts to dig deep into the enterprise level (see New models of Innovation, GAAID network, STEPS, Latin American models etc)

Section 3

MACRO AND META ISSUES

Innovation matters

• • • • • Innovation makes an important contribution to sustainable human development and has been shown to be the foundation for enhanced competitiveness, industrial and technological upgrading and a factor stimulating structural change Innovation strategies help with structural changes, improve responsiveness to external challenges, including the changing nature of international markets and trade regimes Innovation can provide solutions for the effective provision of essential public goods, such as education, housing, water and sanitation and health services. Innovation can assist with the effort to balance common goals of producing economic growth & redistribution of wealth Strategies used in the developing world involve capability building and technological upgrading for which learning processes are critical inputs

Innovation is a hot issue

A number of confluences explain the growing interest, including: 1. the economic crisis and the reflection that it prompted 2. challenges to the established “hegemonic” theories of economic growth 3. innovation is itself on the agenda of firms 4. environmental stewardship and intergenerational responsibility has a higher priority 5. policy makers have move to a greater understanding of the importance of learning, capability building and technological upgrading for economic growth, competitiveness and improvements in social services delivery 6. demand for greater social inclusion within and among countries 7. changes in governance of development institutions 8. solidarity among emerging countries

• • • •

Systems Approach

Innovation systems consist of policy making institutions, firms, research bodies, educational institutions, financial sector, individual innovators. This brings together in a single framework, all the elements and disparate processes involved in the production, diffusion and application of knowledge, as well as the impact of these processes on economic and social development. This can be applied in national, regional or even local context and helps to shift the emphasis from individual organizations to the interaction between the various elements of the system and the interaction between the supply and demand of knowledge Should lead to a focus on the interrelationship and alignment between socio economic development and the needs, priorities and capabilities of innovation policies and links between institutional frameworks and sustainable innovation policy implementation

Innovation for what?

Based on Princeton political scientist Stokes 1997

Co-evolving cycles

Creative Destruction....

Creating and Capturing Value

• Societies including firms and other producers must be aware of the types of knowledge they hold and value these as assets • Create systems to store, protect & share knowledge • Must manage different types of intellectual property and knowledge assets • Secure routes to market by exploiting intellectual property and/or by sharing in open platform configurations • This requires social and cultural capital in addition to technical skills (confidence, strong identity and cultural awareness) 26

Social Capital and Innovation

• Structural social capital (business network assets, information network assets, research network assets, participation assets and relational assets) • Cognitive social capital • Some of these are more amenable to policy intervention, while others are features of social and cultural systems and deeply encoded.

Community level

• Context specificity • Variation • Alienation, disconnection and mistrust • Need for intermediaries and translators • Scaling up and replication • Financing risk • Knowledge gaps and capability gaps

Dimensions of Analysis

• Extent/ nature of involvement and participation • Intensity and types of interactions and knowledge circulation modes • Project ownership • Technological suitability • Process of technology appropriation • Environmental impact (intended and unintended) • Alignment with societal values, and structure and effect over time

Innovation dynamics in the South

• Developing countries have developed innovation strategies to stimulate economic growth and development • Capacity to develop and implement these strategies is often scarce • Approaches to innovation policy experience a lot of inertia and mental bottlenecks, including an ability to: – Take innovation performers seriously – Take communities seriously • It is necessary to understand innovation dynamics from various starting points: developing country firms tackle innovation through learning and capability building

Brazil Mini Case

• 3 rd generation rural development policy 2004.....

• Specific objectives on poverty alleviation, improved and family welfare and reducing geographic and rural disparities • An innovation agenda embedded • Proambiente – State, private sector and community organisations – Payment for ecological services – Organic and bio-products including for international trade but local luxury markets – New forms of ownership and production – Supplier linkages with large firms – Technological upgrading, learning and capability building

Section 4

CONCLUDING REMARKS

South Africa specific issues

1. Formal policies for R&D and innovation since 1996 2. New institutions being created viz, Technology Innovation Agency (TIA) and restructured 3. Peer reviews, internal monitoring and evaluation 4. Increased scrutiny on the developmental impact of science, technology and innovation spending 5. Concerns about traditional R&D capacity 6. Concerns about competitiveness, productivity levels and “job-less” growth

Recent activity in South Africa ......

• Dept of Science & Technology seminar on inclusive innov June 2012 • OECD conference inclusive innovation Nov 2012 • NACI workshop innov4dev March 2013 • DST funded HSRC rural innovation project seminars • DST innovation for sustainable livelihoods policy dialogue April 2013 • Ministerial Review of the NSI concluded in 2012 • Summit on Science, Technology and Innovation July 2013 • HSDD Grand Challenge “innovation for social purposes” research programme

Critical Success Factors

• STI infrastructure • High absorptive capacities • Capabilities to generate, search, select and implement solutions • Knowledge and knowledge flows • STI Policy and programming ecosystem • Empowered, capable officials • Engaged communities

Areas of intervention

• Research including comparative analysis and empirical studies • Evaluation of previous projects • Training and education • Advocacy and engagement • More policy dialogues of various types – pull out sector groups, performers, financiers, senior public officials, entrepreneurs, community groups

Research and Evidence

• Innovation and job creation • Innovation landscape/ecosystem • Community innovators and the psychological and anthropological issues involved in their emergence • Technology acquisition strategies of firms • University and industry interaction • Measurable indicators of success – Benchmarks – Targets – Milestones

Expected Outcomes

• Improved impact over time • Better outcomes in terms of high level development objectives • Engagement with the private sector • Engagement with knowledge producers • Engagement with communities increased visibility and political viability

Shifting the intention of policy

• Improve the conditions under which performers of innovation thrive – Information/knowledge inputs – Rules of the game – Resource availability including complementary assets – Incentive structures

HEIs Colleges Academia

4 3 2

Community

1

CIVIL SOCIETY & CONSUMERS Incentives Public Sector Resources Funding Policy Private Sector Governance Primary Education International Environment

Recommendations

• Treat

development

outcomes as non automatic and design checks and balances in STI programming (similar to environmental and gender audits) • Undertake a baseline survey of the DST budget wrt to development priorities (jobs, inequality and poverty)and develop development related criteria and indicators for monitoring and evaluation • Remove the public sector, science-centric bias in STI programming and the command and control style • Focus more on facilitating the innovation performers firms, communities, and individuals • Focus directly on setting innovation challenges in areas such as water management, energy security, affordable housing, improved healthcare systems and reliable transportation that have impactful effects on quality of life

For follow up and further elaboration Professor Gillian Marcelle Associate Professor: Strategy and Innovation [email protected]

www.wits.ac.za/managinginnovation

Visiting Scholar, Tata Center for Technology and Design, MIT [email protected]

http://tatacenter.mit.edu/

THANK YOU