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Regional Innovation Paradoxes: Fostering Competitiveness Through Innovative Technologies and Healthy Communities

The Regional Innovation conference explores the paradoxes in regional economies, focusing on the correlation between innovation and economic growth, and the role of collaboration and clusters in fostering competitiveness. Join us in Brussels on March 7-8, 2007.

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Regional Innovation Paradoxes: Fostering Competitiveness Through Innovative Technologies and Healthy Communities

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  1. Regional Innovation ParadoxesRegions for Economic Change: fostering competitiveness through innovative technologies, products and healthy communities. Brussels, 7- 8 March 2007 Michael Kitson Director, Programme on Regional Innovation, Cambridge-MIT Institute

  2. The Cambridge-MIT Institute (CMI) • Strategic alliance between the University of Cambridge and the Massachusetts Institute of Technology • Mission: to enhance the competitiveness, productivity and entrepreneurship of the UK economy • By improving the effectiveness of knowledge exchange between university and industry • CMI’s Programme on Regional Innovation • Addressing the issues facing regional economies in influencing and sustaining knowledge-based growth. • www.regionalinnovation.org.uk

  3. Two Economic Paradoxes • The Innovation Paradox • The Location Paradox

  4. Investors Entrepreneurs & Inventors Team IDEAS INNOVATION

  5. The Innovation (Solow) Paradox • Economic growth is not apparently correlated with innovation • “You can see the computer age everywhere these days, except in the productivity statistics". Robert Solow, 1987, (MIT, Nobel Laureate)

  6. The Innovation (Solow) Paradox • Answer? • Innovation takes time to have a major impact on economic growth. • Why? • It is the use of technology not the generation of technology that has the biggest impact on growth

  7. The Innovation (Solow) Paradox • US Productivity growth 1995-2000: the three largest contributors to the productivity surge were, in order: • wholesale trade • retail trade • security and commodity brokers (Solow, CMI Summit 2001)

  8. IDEAS INNOVATION D I F F U S I O N Investors Entrepreneurs & Inventors Team

  9. Bentonville AR.

  10. Four pathways of regional innovation-led growth A. KNOWLEDGE GENERATING LOCATIONS • Indigenous creation of new technologies B. KNOWLEDGE USING LOCATIONS II. Transplantation of new economic activity into region III. Diversification of existing industry into new activities IV. Upgrading of mature industries Source: Based on Richard Lester, MIT

  11. Developing New Technologies: the tale of two cities • Strong biotechnology clusters in the Cambridges (USA and UK) • But the development of the industry in the two cities reflects different trajectories and different challenges • Indicates the importance of understanding the geography and history of place

  12. Source: MIT Entrepreneurship Centre 1 mile

  13. 8 miles

  14. The Location Paradox • Innovating business do not engage in extensive collaboration with other local businesses or institutions

  15. Collaboration and Clusters • According to Porter (1998) clusters are ‘geographic concentrations of interconnected companies, specialised suppliers, service providers, firms in related industries, and associated institutions (for example universities, standards agencies, and trade associations) in particular fields that compete but also co-operate’

  16. Collaboration and Clusters • The stress on ‘geographic concentrations’ of collaborators is misleading • The Porter analysis is based on where firms are, not what firms do • Local collaborative behaviour is not an important driver of innovation • National and international collaborations are often more important than local collaborations • Important to distinguish between ‘bridging and’ bonding’ networks – bridging networks that are outward looking may be more important for knowledge based activity

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