Transcript Policy concepts and instruments for support of business

Policy concepts and instruments for
support of business innovation
Keith Smith
Australian Innovation Research Centre
University of Tasmania
Developments in innovation policy:
the changing global context
• Strong differences between the major economies
(especially between USA and EU)
• New global growth dynamic: Big growth in output,
R&D and skilled personnel in China, India, Russia,
Brazil, Turkey, Mexico, India etc
• Entry of smaller countries in advanced technologies for example Finland, Sweden, Canada in mobile
• New patterns of R&D globalisation and skilled
mobility - global sourcing is replacing trade-driven
R&D
Objectives of innovation policy
• To enhance problem-solving capabilities
in society, in such areas as health,
education
• To provide the support conditions for
populations of innovating firms, capable
of survival and growth
New directions in innovation
policy
• Need to base policies on the real characteristics of
innovation processes
• New emphasis on innovation system policies, and on
sectoral approaches
• Need to take account of changing patterns of
demand as world economy grows (for example food,
resources)
• New attention to sectors (especially low-tech) and to
resource-based sectors
What do we know about
innovation processes?
Innovation research over the past two decades has
shown:
• Innovation is generally not science driven
• Innovation is pervasive across sectors - it is not
confined to high tech environments
• Innovation differs sharply across sectors (in terms of
inputs, organisation and actors, knowledge bases,
risk profiles)
• Innovation capabilities are cumulative over time
• Innovation outcomes are highly uncertain
• Innovation is collective - it relies on the innovation
environment
Innovation environments: the
‘innovation system’
Historically developed patterns of
• Specialisation
• Institutions
• Knowledge creating organizations
• Risk management agencies
• Skills and education
- that support and structure innovation
System levels
Systems can be thought of at different
levels:
• Technological
• Sectoral
• National
System functioning - what does a
well-functioning innovation system
do?
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Identify opportunities
Create capabilities, make experiments
Create and diffuse knowledge
Manage risk (risk reduction, risk sharing, risk
shifting)
• Mobilise resources
• Create positive externalities
Key system policy instruments
• Organisations for developing strategic
visions and creating opportunity
• Education and skills
• Physical and knowledge infrastructures
• R&D capability
• Risk management - finance
These elements of system policy are not
affected by globalisation rules
At national level in Europe…
• New organizing concepts (especially systems
approaches)
• New agencies for implementation (with system focus)
• Wider rationales (bounded vision, limits to firm
capabilities, management of uncertainty, institutional
and infrastructure frameworks, “system failures”)
• Broader set of objectives (innovation/R&D policy as
broad instrument for other objectives)
• Wider array of instruments (reflecting innovation
complexity)
• Innovation perspective in other policy arenas (such
as competition, regulation)
• Complex links to EU (transnational issues)
Innovation policy measures
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Financing (mobilisation of private capital, investment in VC funds, public
loan operations)
Taxation (fiscal measures beyond R&D – wealth, options, social security
issues etc)
Strategic Vision of R&D (forecasting exercises)
Strengthening Company Research (university-industry collaboration, nearmarket development schemes)
Start-up of technology-based companies Education & Training
(specifically related to innovation – skills acqisition, distance learning,
lifelong learning etc)
Mobility Students/Researcher/Teachers (inter-sectoral mobility programs,
having large efects in some countrries)
Public Authorities (infrastructures, public procurement, monitoring and
analysis, statistics and indicators, innovation in the public sector, policy
capabilities)
Promotion of clustering and co-operation for innovation (regional
initiatives, cluster-wide services)
Competition impacts on innovation, measures to improve tech transfer
Sector policies and agencies in
Australia
• Co-operative Research Centres - about 50, joint
funded between industry and government
• Rural Research and Development Corporations
(about 10, in wine, dairy products, etc)
• ‘Action Agendas’ for sectoral strategies
• Food innovation grants
• University links with CRCs
• Industry development associations - such as
Australian Research Institute for Minerals (ARIMA)
Wine in Australia
Organisations:
• Strategic vision - Wine 2025 (made by Wine Makers
and Grape Growers Federations)
• Infrastructure: CSIRO (Commonwealth Scientific and
Industrial Research Organisation)
• Grape and Wine Development Corporation (Joint
R&D operation)
• Science-based wine education - training in 12
universities
Infrastructure, R&D and education all supported by
Federal government
Wine achievements in
Australia
Major Innovations:
• Mechanical harvesting and pruning
• New root stocks and viticulture methods
• New varieties
Economic outcomes:
• 12% compound annual growth rates in output and
trade since 1986
• 3% share of world market
• Exports: $US2 billion
• 2000 producers
Wine in Australia - the big
problem
• Industry became dominated by 4 firms - BRL
Hardy, Southcorp, Orlando Wyndham, and
Mildara Blass
• In 2003 they had 80% of Australian market
and exports
• None of these firms exists today - owned by
Fosters Group (Australian), Constellation
Brnads (USA), Pernod Ricard (France)
• Why? None were able to manage the scale
and risks of global distribution
Conclusions
• Global growth is opening up new areas for
innovative products
• These are not necessarily ‘high tech’ - they
include food products, furniture, clothing etc
• They require sector-specific development
strategies, based on thorough knowledge of
how innovation occurs
• Sector policy instruments can be controlled
by national governments