Local innovation and production systems: Brazilian experience in developing and using the concept

1. Local innovation and production systems: Brazilian experience in developing and using the concept Helena M. M. Lastres - hlastres@ie.ufrj.br RedeSist Research Network on Local Productive and Innovative Systems Federal University of Rio de Janeiro, Brazil

2. Research Network on Innovation and Production Systems - RedeSist • Origin • Group of Brazilians doing their Ph.D and visiting fellowship work in the UK in the same period that the concept of system of innovation was been developed • Relevance of the systemic view both to understand and to orient industrial and technological development • Convergence with theories on development (Lastres & Cassiolato, 2002; 2003; Cassiolato et al, 2005)

3. Research Network on Local Production and Innovation Systems - RedeSist • Back to Brazil - key question: How to put this concept into practice? How to make it useful? National system of innovation Sectoral system of innovation Regional system of innovation All these approaches presented advantages. but among the most important limitations were: • the difficulty of capturing innovation processes in production spheres • the partial vision of the systems

4. Research Network on Local Innovation and Production Systems - RedeSist Main elements of the solution • Productionandinnovation as the focus of the analysis Basic assumption:firms do not produce or innovate in isolation. Therefore, there is always a system around any productive and innovative activity • Focus on the local production system in a particular territory - key for • establishing the boundaries of the investigation + the understanding that of course it can be part of a broader system (sectoral, regional, national and global) • understanding how knowledge is acquired, used and diffused - main source of sustainable competitiveness

5. Concept of Local Innovation and Production Systems Local Innovation and Production Systems (LIPSs) are groups of economic, political and social agents localized in the same area, performing related economic activities and presenting formal and informal articulation, interaction, co-operation and learning processes Generally they comprise • firms: designing, producing and commercializing final goods and services, suppliers of inputs (raw materials, equipment, etc.) and service providers • other public and private organizations in charge of education and training, R&D, engineering, financing, social and economic development, co-operatives, economic, social and political associations and representations, etc.

6. Main tasks of RedeSist • Development of the concepts of Local Innovation and Production Systems - LIPSs • Development of a methodology for empirical surveys: diagnosis of case studies, policy evaluation and suggestions • characterization of the LIPS: actors, linkages and flows (knowledge; goods and services), cooperation, hierarchy and coordination, embeddedness; etc. • sample and tabular plans; plans for interviews, questionnaires (for different types of actors) • general structure for the reports - role of the LIPS in the international, national and local economies, analysis of the case, policy recommendations

7. Main results obtained by RedeSist • Analysis of 38 + 30 (M.Sc dissertations) local productive and innovative systems in different regions in Brazil • + 9 new case studies of creative industries • In Jan. 2006, > 300 technical notes, including empirical studies and other analyses, were available in the homepage of RedeSist • System of information on local innovation and production systems -Sinal - www.sinal.redesist.ie.ufrj.br • secondary + primary data on LIPSs and indicators on cooperation, learning and innovation processes, knowledge and information flows, etc.

8. Main results obtained by RedeSist • Glossary defining the main concepts and terms used: innovation, cooperation, social capital, etc. • differences with concepts such as cluster, industrial districts, milieux innovateur, etc. • advantages for analytical and policy-making purposes • Workshops and courses for promotion agencies • Important collective learning processes - by developing, using and codifying new conceptual, analytical and policy approaches - based on the interaction between and among • researchers • policy-makers • entrepreneurs and other agents “understanding to create knowledge”

9. Main Advantages and Challenges RedeSist’s approach assumes • the systemic nature of innovation and the need of taking into account the knowledge, production, commercial financial, social, institutional and political spheres in their micro, meso and macro dimensions • the localized nature of the assimilation, use and diffusion of knowledge and innovation • each production system is addressed within its local, national and international contexts • the dynamics and support requirements of a specific LIPS may be quite different from other cases, even in if located in its neighborhood • this is particularly relevant in countries with the dimension of the BRICSs

10. Therefore, the arguments that the LIPS approach • covers the space where the main processes of learning, capacity building and innovation takes place, allowing for a broader understanding of industrial and technological development • represents the space where both public and private policies for learning, innovation and competence building can be more effective • stimulates the integration of visions and coordination of actions of different agents, acting at national and local levels • does not ignores that processes of development and of knowledge generation, useand diffusioncan not be treated in isolation from issues of international hierarchies and power, as well as historical and cultural specific contexts

11. RedeSist experience IS represents a practical unit of investigation that is • complementary and also • broader, more flexible and advanced to those on individual organizations, industrial agglomerations, production chains and sectors Despite these advantages Problems of using research and policy concepts and prescriptions based on models that • are not adapted to the local context in question • misunderstand and are not able to capture the processes of learning and capacity building • often aim at “building, constructing, creating” cooperation, coordination and even the whole innovation system • Significant knowledge and competence are required to select and choose among the available models those that can be useful. • Even more important is the required mastery in the use of such models and related instruments (Lastres and Cassiolato, 2004; 2005)

12. Conclusion • The approach on local innovation and production systems (LIPS) offers significant advantages and represents a necessary complement to other approaches on • NSIs, SSIs and RSIs • This convergence of approaches is crucial for putting into practice - and, therefore, further strengthening - the concept of system of innovation as a possible and relevant unit of analysis of the BRICSs • Almost 20 years, I am still convinced that the concept of IS represents a powerful focusing device that allows a better understanding of industrial and technological development

13. Conclusion Some of main challenges involved • difficulty to work with new concepts • and particularly those aiming at capturing and evaluating intangibles (resources and processes) and involving high levels of inequality and informality (knowledge, work, organizations and institutions) • And as we do believe that knowledge results from interactive learning processes, we count on you Thank you very much for your attention Helena M. M. Lastres - hlastres@redesist.ie.ufrj.br www.sinal.redesist.ie.ufrj.br