Overcoming the “European Paradox”: The role of Regional Innovation Systems (RIS) in translating R&D investments into economic and employment growth

The emergence of the so-called “European Paradox” shows that R&D investment is not maximally effective and that increasing the scale of public R&D expenditures is not sufficient to generate employment and sustained economic growth. Increasing Governmental R&D Investment is far from being a “panacea” for stagnant growth. It is worth noting that Government R&D Investment does not have a statistically significant impact on employment, indicating the need to assess the trade-offs of policies that could lead to significant increases in government expenditure. Surprisingly, Governmental R&D Employment does not contribute to “mass-market” employment, despite its quite important role in reducing Youth-Unemployment. Despite the negative side-effects of Governmental R&D Employment on both GVA and GDP, University R&D Employment appears to have a quite important role in reducing Unemployment, especially Youth-Unemployment, while it also does not have a downside in terms of economic growth. Technological Capacity enhancement is the most effective instrument for reducing Unemployment and is a policy without any downside regarding sustainable economical development. In terms of wider policy implications, the results reinforce the idea that European Commission Research and Innovation policies must be restructured, shifting from a transnational framework to a more localised, measurable and operational approach.

Innovation, networking and globalisation:the role of regional innovation systems in the global innovation process

In the global economy, innovation is one of the most important competitive assets for companies willing to compete in international markets. As competition moves from standardised products to customised ones, depending on each specific market needs, economies of scale are not anymore the only winning strategy. Innovation requires firms to establish processes to acquire and absorb new knowledge, leading to the recent theory of Open Innovation. Knowledge sharing and acquisition happens when firms are embedded in networks with other firms, university, institutions and many other economic actors. Several typologies of innovation and firm networks have been identified, with various geographical spans. One of the first being modelled was the Industrial Cluster (or in Italian Distretto Industriale) which was for long considered the benchmark for innovation and economic development. Other kind of networks have been modelled since the late 1970s; Regional Innovation Systems represent one of the latest and more diffuse model of innovation networks, specifically introduced to combine local networks and the global economy. This model was qualitatively exploited since its introduction, but, together with National Innovation Systems, is among the most inspiring for policy makers and is often cited by them, not always properly. The aim of this research is to setup an econometric model describing Regional Innovation Systems, becoming one the first attempts to test and enhance this theory with a quantitative approach. A dataset of 104 secondary and primary data from European regions was built in order to run a multiple linear regression, testing if Regional Innovation Systems are really correlated to regional innovation and regional innovation in cooperation with foreign partners. Furthermore, an exploratory multiple linear regression was performed to verify which variables, among those describing a Regional Innovation Systems, are the most significant for innovating, alone or with foreign partners. Furthermore, the effectiveness of present innovation policies has been tested based on the findings of the econometric model. The developed model confirmed the role of Regional Innovation Systems for creating innovation even in cooperation with international partners: this represents one of the firsts quantitative confirmation of a theory previously based on qualitative models only. Furthermore the results of this model confirmed a minor influence of National Innovation Systems: comparing the analysis of existing innovation policies, both at regional and national level, to our findings, emerged the need for potential a pivotal change in the direction currently followed by policy makers. Last, while confirming the role of the presence a learning environment in a region and the catalyst role of regional administration, this research offers a potential new perspective for the whole private sector in creating a Regional Innovation System.

R&D, Spillovers, Innovation Systems and the Genesis of Regional Growth in Europe. Bruges European Economic Research (BEER) Papers 5/October 2006

Research on the impact of innovation on regional economic performance in Europe has fundamentally followed three approaches: a) the analysis of the link between investment in R&D, patents, and economic growth; b) the study of the existence and efficiency of regional innovation systems; and c) the examination of geographical diffusion of regional knowledge spillovers. These complementary approaches have, however, rarely been combined. Important operational and methodological barriers have thwarted any potential cross-fertilization. In this paper, we try to fill this gap in the literature by combining in one model R&D, spillovers, and innovation systems approaches. A multiple regression analysis is conducted for all regions of the EU-25, including measures of R&D investment, proxies for regional innovation systems, and knowledge and socio-economic spillovers. This approach allows us to discriminate between the influence of internal factors and external knowledge and institutional flows on regional economic growth. The empirical results highlight how the interaction between local and external research with local and external socioeconomic and institutional conditions determines the potential of every region in order to maximise its innovation capacity. They also indicate the importance of proximity for the transmission of economically productive knowledge, as spillovers show strong distance decay effects. In the EU-25 context, only the innovative efforts pursued within a 180 minute travel radius have a positive and significant impact on regional growth performance.

The use of future-oriented knowledge in regional innovation processes: Research on knowledge generation, transfer and conversion

The importance of the regional level in research has risen in the last few decades and a vast literature in the fields of, for instance, evolutionary and institutional economics, network theories, innovations and learning systems, as well as sociology, has focused on regional level questions. Recently the policy makers and regional actors have also began to pay increasing attention to the knowledge economy and its needs, in general, and the connectivity and support structures of regional clusters in particular. Nowadays knowledge is generally considered as the most important source of competitive advantage, but even the most specialised forms of knowledge are becoming a short-lived resource for example due to the accelerating pace of technological change. This emphasizes the need of foresight activities in national, regional and organizational levels and the integration of foresight and innovation activities. In regional setting this development sets great challenges especially in those regions having no university and thus usually very limited resources for research activities. Also the research problem of this dissertation is related to the need to better incorporate the information produced by foresight process to facilitate and to be used in regional practice-based innovation processes. This dissertation is a constructive case study the case being Lahti region and a network facilitating innovation policy adopted in that region. Dissertation consists of a summary and five articles and during the research process a construct or a conceptual model for solving this real life problem has been developed. It is also being implemented as part of the network facilitating innovation policy in the Lahti region.

Transnational innovation systems

Includes Bibliography

Os determinantes da capacidade regional de inovação nas Regiões Periféricas da União Europeia

Dissertação de Mestrado em Gestão de Empresas/MBA.

Knowledge, networks of cities and growth in regional urban systems

The objective of this paper is to measure the impact of different kinds of knowledge and external economies on urban growth in an intraregional context. The main hypothesis is that knowledge leads to growth, and that this knowledge is related to the existence of agglomeration and network externalities in cities. We develop a three-tage methodology: first, we measure the amount and growth of knowledge in cities using the OCDE (2003) classification and employment data; second, we identify the spatial structure of the area of analysis (networks of cities); third, we combine the Glaeser - Henderson - De Lucio models with spatial econometric specifications in order to contrast the existence of spatially static (agglomeration) and spatially dynamic (network) external economies in an urban growth model. Results suggest that higher growth rates are associated to higher levels of technology and knowledge. The growth of the different kinds of knowledge is related to local and spatial factors (agglomeration and network externalities) and each knowledge intensity shows a particular response to these factors. These results have implications for policy design, since we can forecast and intervene on local knowledge development paths.

Regional Innovation Policy: Effect on SMEs in Five EU-Regions

Valtaosa eurooppalaisista yrityksistä on pk-yrityksiä, mutta tästä huolimatta seudullisen innovaatiopolitiikan vaikutusta juuri pk-yrityksiin on tutkittu melko vähän. Tämän tutkimuksen tarkoituksena on luoda yleiskuva pk-yritysten näkemykseen oman seutunsa innovaatiopolitiikasta viidellä EU:n alueella sijaitsevalla seudulla. Kirjallisuuden perusteella rakennettiin seudullista innovaatiopolitiikkaa kuvaava kysely, johon joukko pk-yrityksiä viideltä seudulta vastasi. Kyselyn tulokset kuvailtiin graafisesti, minkä lisäksi etsittiin vastauksiin vaikuttaneita tekijöitä ja yhteyksiä yritysten vastausten välillä. Tutkimus oli luonteeltaan lähinnä kvantitatiivinen. Tutkimus osoittaa, että seudullisessainnovaatiopolitiikassa on vielä paljon kehitettävää, jotta se tavoittaisi kattavasti pk-yritykset. Pk-yritysten tietoisuutta tulisi lisätä, sillä nämä eivät yleisesti ottaen näytä pitävän seudullista innovaatiopolitiikkaa menetykseen vaikuttavana tekijänä tai siihen liittyviä yhteistyömahdollisuuksia tärkeinä omalle toiminnalleen. Erot innovaatiotoiminnan seudullisessa roolissa tulivat esiin tuloksissa. Yritysten vastauksia selittäviä tekijöitä löydettiin, samoin yhteyksiä vastausten välillä, mutta varsinaisten johtopäätösten tekeminen edellyttänee laajempaa tutkimusta

Regional Innovation Policy: Effect on SMEs in Five EU-Regions

Valtaosa eurooppalaisista yrityksistä on pk-yrityksiä, mutta tästä huolimatta seudullisen innovaatiopolitiikan vaikutusta juuri pk-yrityksiin on tutkittu melko vähän. Tämän tutkimuksen tarkoituksena on luoda yleiskuva pk-yritysten näkemykseen oman seutunsa innovaatiopolitiikasta viidellä EU:n alueella sijaitsevalla seudulla. Kirjallisuuden perusteella rakennettiin seudullista innovaatiopolitiikkaa kuvaava kysely, johon joukko pk-yrityksiä viideltä seudulta vastasi. Kyselyn tulokset kuvailtiin graafisesti, minkä lisäksi etsittiin vastauksiin vaikuttaneita tekijöitä ja yhteyksiä yritysten vastausten välillä. Tutkimus oli luonteeltaan lähinnä kvantitatiivinen. Tutkimus osoittaa, että seudullisessa innovaatiopolitiikassa on vielä paljon kehitettävää, jotta se tavoittaisi kattavasti pk-yritykset. Pk-yritysten tietoisuutta tulisi lisätä, sillä nämä eivät yleisesti ottaen näytä pitävän seudullista innovaatiopolitiikkaa menetykseen vaikuttavana tekijänä tai siihen liittyviä yhteistyömahdollisuuksia tärkeinä omalle toiminnalleen. Erot innovaatiotoiminnan seudullisessa roolissa tulivat esiin tuloksissa. Yritysten vastauksia selittäviä tekijöitä löydettiin, samoin yhteyksiä vastausten välillä, mutta varsinaisten johtopäätösten tekeminen edellyttänee laajempaa tutkimusta.

Ranking Regional Innovation Policies: DEA-based Benchmarking in an European Setting

Seudullinen innovaatio on monimutkainen ilmiö, joka usein sijaitsee paikallisten toimijoiden keskinäisen vuorovaikutuksen kentässä. Täten sitä on perinteisesti pidetty vaikeasti mitattavana ilmiönä. Työssä sovellettiin Data Envelopment Analysis menetelmää, joka on osoittautunut aiemmin menestyksekkääksi tapauksissa, joissa mitattavien syötteiden ja tuotteiden väliset suhteet eivät ole olleet ilmeisiä. Työssä luotiin konseptuaalinen malli seudullisen innovaation syötteistä ja tuotteista, jonka perusteella valittiin 12 tilastollisen muuttujan mittaristo. Käyttäen Eurostat:ia datalähteenä, lähdedata kahdeksaan muuttujsta saatiin seudullisella tasolla, sekä mittaristoa täydennettiin yhdellä kansallisella muuttujalla. Arviointi suoritettiin lopulta 45 eurooppalaiselle seudulle. Tutkimuksen painopiste oli arvioida DEA-menetelmän soveltuvuutta innovaatiojärjestelmän mittaamiseen, sillä menetelmää ei ole aiemmin sovellettu vastaavassa tapauksessa. Ensimmäiset tulokset osoittivat ylipäätään liiallisen korkeita tehokkuuslukuja. Korjaustoimenpiteitä erottelutarkkuuden parantamiseksi esiteltiin ja sovellettiin, jonka jälkeen saatiin realistisempia tuloksia ja ranking-lista arvioitavista seuduista. DEA-menetelmän todettiin olevan tehokas ja kiinnostava työkalu arviointikäytäntöjen ja innovaatiopolitiikan kehittämiseen, sikäli kun datan saatavuusongelmat saadaan ratkaistua sekä itse mallia tarkennettua.

Regional innovation strategies and sustainability in selected EU countries

This study focuses on regional innovation strategy (RIS) and sustainability aspects in selected regions of European Union (EU) countries. It is known that RIS helps a region to innovate locally and to compete globally and it is considered as one of the main policy tools of the EU for innovation support at a regional level. This study is conducted to explore the existence and adoption of RIS in different regions of selected EU countries, and to highlight and compare regional RIS characteristics. The study is also aimed at identifying the factors that characterise the formulation and implementation of RIS as well as the problems associated thereof. In this study, six regions of EU countries are considered: Päijät-Häme Region (Finland); London Region (United Kingdom); Mid-West Region (Ireland); Veneto Region (Italy); Eastern Region (Poland); and West Region (Romania). Data and information are collected by sending questionnaires to the respective regional authorities of these selected regions. Based on the gathered information and analysis, RIS or equivalent strategy document serves as a blueprint for forwarding innovative programmes towards regional sustainability. The objectives of RIS in these regions are found to be dependent on the priority sectors and state of the region’s development. The current environmental sustainability aspects are focused on eco-design, eco-products, and eco-innovation, although each region also has its own specific aspects supported by RIS. Likewise, regional policies typically follow the RIS yet translated in various sectoral focus or priority areas. The main enhancing factors supporting RIS among selected regions have some similarities and variations; among others, some regions are strongly supported by EU while others have support from own regional agencies, organisations and professional networks. RIS implementation is not without challenges and despite the differences in challenges, almost all of reviewed regions consider financial resource as a common problem. Generally, it is learned from this study that RIS and regional sustainability are reinforcing each other mutually. In this study, the strong focus is given towards environmental sustainability in the regions although regional sustainability also includes economic and social aspects. A well-focused and prioritised RIS is beneficial for regional sustainable development.