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Enhancing the role of KISA in Innovation Systems

Enhancing the role of KISA in Innovation Systems. Dr. Jonathan Potter Senior Economist OECD Centre for SMEs, Entrepreneurship & Local Development. Second Research Seminar KIBS & knowledge flows in a globalised economy NESTA, 1 Plough Place, London 28 March 2011.

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Enhancing the role of KISA in Innovation Systems

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  1. Enhancing the role of KISA in Innovation Systems Dr. Jonathan Potter Senior Economist OECD Centre for SMEs, Entrepreneurship & Local Development Second ResearchSeminar KIBS & knowledgeflows in a globalisedeconomy NESTA, 1 Plough Place, London 28 March 2011

  2. Presentation Structure • Outline of OECD KISA work • KISA and KIBS: nature and trends • The role of KISA in innovation systems • Policy suggestions

  3. Part One: OECD kisawork

  4. 1.1 Exploratory KISA study • Most firms make use of KISAs in their daily operations, producing them internally or sourcing them externally • How do KISAs contribute to acquisition and growth of innovation capabilities?

  5. 1.2 What are KISAs? • R&D; information and communication services; human resource management; tax services; accounting; marketing etc

  6. 1.3 Study method • What kinds of KISAs occur? • How do they affect innovation? • 9 country studies • 4 broad industry groups • 20 case studies • Industry mapping • 1000 survey respondents • 230 interviews

  7. 1.4 Other work touching on KISA • OECD Innovation Strategy • Non-technological innovation • Open innovation • Role of SMEs and entrepreneurship • Local SME and Entrepreneurship Reviews • Policy assessments in case study regions • Focus on networks and knowledge flows in innovation • Training in SMEs • Use of KISAs as an informal training mechanism

  8. Part Two: KISA and KIBS: nature and trends

  9. 2.1 Scale of KIBS • Note: As a % of total industry, construction and market services excl. financialintermediation. Figures for the US are for 2006 and are nymber of employees. • Source: OECD Structural and Business Demographic Statistics Database

  10. 2.2 Growth of KIBS • Note: For the US, 2002-06. Annualgrowth of the number of employees • Source: OECD Structural and Business Demographic Statistics Database

  11. 2.3 KISA clusters – USA Source: OECD, based on ORBIS database

  12. 2.4 KISA-intensive regions Source: OECD, Regions at a Glance, 2005 data

  13. 2.5 SMEs & KIBS (UK) • Source: OECD Structural and Business Demographic Statistics Database

  14. Part Three: KIBS role in innovation

  15. 3.1 Types of KISA contribution • Sources of innovationInitiating and developing innovation activities in client organisations • Facilitators of innovationSupporting organisations in the innovation process • Carriers of innovationTransferring existing knowledge among or within organisations, industries and networks

  16. 3.3 KISA and skills upgrading Note: BE = 38, NZ = 74, PO = 137, TU = 49, UK = 50, Total = 348 Source: OECD LEED (2010), Leveraging Training & Skills Development in SMEs: Preliminary Cross-Country Analysis of the TSME Survey

  17. Part Four: Policy suggestions

  18. 4.1 KISA absorption • Effective human resource management • Employ experts; form multi-disciplinary research teams; use personal connections with industry and other experts • Appropriate organisational structures • Dedicated business units that scan the environment and develop new expertise; acquisition of firms that can bring in new knowledge and innovative thinking; joint ventures that institutionalise co-operation

  19. 4.2 KISA absorption (contd) • Effective networks and linkages • Participate in networks; engage in close co-operation with suppliers and customers in new solutions development; joint projects with research • Use of market-based transactions • Buy integrated product/service bundles that bring external KISA within the firm; outsource to integrate former internal KISA with external expertise; purchase from service providers and work with them

  20. 4.3 Policy for external KISA • Supply of KISA • Promote university consulting • Public sector KISA should not substitute for private sector KISA • Professionalise KISA suppliers • Ensure sufficient supply of financing for growth-oriented KISA firms • Networking • Focus public innovation programmes on ‘softer’ and ‘downstream ‘ innovation • Proactive brokering • Building skills and appropriate structures in firms

  21. 4.4 Policy for external KISA • Demand for KISA • Develop awareness of KISA • Certify services • Publicly-funded demonstration projects • Tax incentives for use of KISA in innovation • Public procurement favouring use of external KISA • KISA vouchers for SMEs

  22. 4.5 Conclusion Overall • Innovation policy should be more responsive to non-technological aspects of innovation, and recognise the role of KISA “Further research will be necessary to more fully explore the most effective role of public policy in stimulating supply and demand of KISA”

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