presentation & workshopcurrently i am acting head of the austrian team of the global...

PRESENTATION & WORKSHOPRegional Innovation Systems,

Intellectual Capital Reporting & Key drivers for

innovation

FH JOANNEUM

Christian Friedl & Thomas Schmalzer

WP3: MULTI-STAKEHOLDER CAPACITY BUILDING

3.1 WORKSHOP PROGRAMME

The University of The West Indies, Cave Hill, Barbados

CHRISTIAN FRIEDLI currently work as lecturer, project manager and researcher at the Institute of International Management of FH JOANNEUM University of Applied Sciences.

In my position, I am responsible for coordinating various research projects at our Institute, in the field of knowledge transfer between university & business, university development, lifelong learning and entrepreneurship.

Before, I have been Educational & Project Manager at the University of Graz and have been working for 9 years in the field of University Lifelong Learning as an expert for the implementation of information and communication technologies for educational activities.

I hold a master degree in Business Administration and a continuing education master degree on European Project and Public Management. Since 2011, I am member of the steering committee of the Austrian Association for the Promotion of Lifelong Learning. Beside my university career, I have been active in the music industry for 14 years.

THOMAS SCHMALZER

I currently work as senior lecturer of economics and head of the R&D centre at the Institute ofInternational Management at FH JOANNEUM (University of Applied Sciences in Graz, Austria) aswell as independent lecturer, trainer and consultant for clients worldwide.

In my position I am responsible for the acquisition, the coordination, as well as the overallmanagement of all R&D projects at the institute, many of them EU funded with a total volumeof over 28 million EUR in the past 5 years, where I have been directly involved in over 30 out of50 larger projects.

Currently I am acting head of the Austrian team of the Global Entrepreneurship Monitor (GEM), the world's largest study in the field of entrepreneurship.

My cross-cultural experience stems from living and working in various countries on shorterproject based, as well as longer term academic and private basis.

FH JOANNEUM

• Leading University of Applied Sciences• 41 degree programmes• ~4000 Students, >540 staff & >800 external

lecturers• Over 540 ongoing projects in R&D with around

5 million annual revenues (50% from the businesssector and 23% from international cooperation)

• Around 200 partner universities in countries all over the world

• Practical student projects• No fees for EU students small fees for third country

students!• Strong international networks• Excellent results at competitions and evaluations

~ 40 bachelor and master degree programmesin 6 departments

| Applied Computer Sciences

We connect people and systems.

| Engineering

We focus on innovative mobility and sustainable production.

| Health Studies

We care about people’s health.

| Building, Energy & Society

We design tomorrow’s living spaces.

| Media & DesignWe shape the media and design of the future.

| Management

We invest our expertise in international business success.

CONNECTION ICR & RIS

University –

Business

Corporation

HEIs/ Universities

REGIONAL INNOVATION SYSTEM

HC / SC / RC

HC / SC / RC

ICR

ICR

Industry-Business

HC / SC / RC

ICR

RIS = Regional

Innovation System

ICR = Intellectual

Capital Reporting

HC = Human Capital

SC = Structural Capital

RC = Relational Capital

HOW TO CONNECTACTORS OF RIS WITH ICR:

Policy-makers

Source: Own

illustration

ICR = „Common language“ in RIS

OVERVIEW

1. Regional Innovation Systems (RIS) – Concepts,

theoretical background, examples

2. Short ICR summary of the last workshop

3. Key driving factors for regional innovation –

Linking regional development and intellectual

capital

THE CONCEPT OF

REGIONAL INNOVATION

SYSTEMS (RIS)

Session 1

8

THE CONCEPT OF REGIONAL INNOVATION SYSTEMS (RIS): OVERVIEW

• Definition of Innovation

• Origin of the Innovation Systems concept: National Innovation System (NIS) & Regional Innovation System (RIS)

• Elements & Activities of an (Regional) Innovation System

• Modeling of Innovation Systems

• Analytical Framework to analyse Innovation Systems

• Typology of a RIS

WHAT IS INNOVATION?

• An interactive process of information transfer

• Requirements: Creativity and learning processes >>>

• Includes Implicit & Explicit knowledge

• Small steps or complete process

• Diffusion of innovation: imitation or adoption

Source: Fraunhofer, ISI, Koschatzky, Innovationssystem_und_Messung, 2011.

InventionIntroduction to

marketInnovation

INNOVATION BASIC DEFINITION (OSLO MANUAL)

• An innovation is the implementation of a new or significantly improved product(good or service), or process, a new marketing method, or a new organizational method in business practices, workplace organisation or external relations.

• The minimum requirement for an innovation is that the product, process, marketing method or organisational method must be new (or significantly improved) to the firm.

• A common feature of an innovation is that it must have been implemented. A new or improved product is implemented when it is introduced on the market. New processes, marketing methods or organisational methods are implemented when they are brought into actual use in the firm’s operations.

Source: Oslo Manual, 3rd edition (2005)

90. 82.

41.

83.

0

5

10

15

20

25

30

35

40

45

Trinidad and Tobago Jamaica Barbados Dominican Republic

Global Innovation Index

Source: www.globalinnovationindex.org, published by Cornell University, The European Institute for Business

Administration (INSEAD) and the World Intellectual Property Organization

The aim of the GII Report is to provide a ranking of world economies’ innovation capabilities and results.

Rankings 20141. Switzerland

2. UK

3. Sweden

….

20. Austria

….

41. Barbados

…

82. Jamaica

83. Dominican

Republic

90. Trinidad &

Tobago

http://www.globalinnovationindex.org/

CHAIN-LINKED MODEL OF THE INNOVATION PROCESS

Source: Illustration from http://ibsttools.page.tl/Innovation-theory.htm

Based on Kline & Rosenberg (1986)

Existing knowledge base

Learning and feedback

SYSTEM BOUNDARIES & INNOVATIONPROCESS OF INSTITUTIONS

Schematic diagram of the

system boundaries of the

innovation process of

companies depending on

their size:

(a) Big companies can

cover the full process of

knowledge creation,

transfer and application

(b) SME in manufacturing

usually cover only more

applied parts of it

(Wiedenhofer, 2012)

THE TRIPLE-HELIX MODEL: CREATION OF A KNOWLEGDE

ECONOMY & REGIONAL INNOVATION ECOSYSTEM

Illustration: The Triple Helix Model with further information about UBC stakeholders’ roles

Model adapted from Etzkowitz & Leydesdorff (2000). Source: The State of European University-Business Cooporation, 2011, p. 32

QUESTIONS TOWARDS THE CONCEPT OF INNOVATION SYSTEMS

• What is an Innovation System?

• Which elements are attributed to it?

– Size

– National / Regional / Sectoral elements

• What influences Innovation Systems?

– Socio-economic influences: Industries, Culture, Science

– International labor-division

• Innovative Regions = Regional Innovation Systems?

• Special characteristics of RIS?


ORIGIN OF THE CONCEPT OF INNOVATION SYSTEMS

• 1970ies: Increased knowledge-gain in innovation economy

• From the 1970s: Critical reflection of classical models (Krugman 1979)

• New concepts concerning complexity and non-linearity of innovative processes (Nelson & Winter 1977, Freeman 1982, Dosi 1982, 1988)

• Conception of technical advancement (= innovation) as an endogenous growth factor (Romer 1986 and other representatives)

• Implementation of basic approaches of innovation research/sciences (Eg.: interactive innovation model of Kline & Rosenberg 1986)


FORMATION OF A CONCEPT FORNATIONAL INNOVATION SYSTEMS (NIS)

• List (1789 – 1846): Concept/Founder of National System of Production

– Creating national institutions & infrastructure

– Optimizing production

• Freeman (1987): Idea of „National System of Innovation“

– Promotion of advancement of technological infrastructure

• Lundvall (1992): Combines NIS and interactive learning

– Innovation as inherent part of regular economical activities


DEFINITION „NATIONAL INNOVATION SYSTEM“

Definitions by Lundvall 1992, Edquist/Lundvall 1993, Galli/Teubal 1997.

Definition by OECD, 1999:

“The international understanding of Research and Innovation Systems is based on all institutions, which

– operate scientific research

– accumulate and impart knowledge

– educate workers (personnel, laborers)

– develop technologies

– produce and distribute innovative products and procedures.”


NATIONAL INNOVATION SYSTEM RIS

• Regional Innovation System (Cooke 1992) / Sectoral / TechnologicalInnovation System (Carlsson 1995,…)

• The spatial distribution of innovation activities is concentrated on specific sites. Geographic proximity support mutual trust and interaction between stakeholders.

• “Embeddedness” into a common social, cultural and institutional environment.

• Regional and National Innovation Systems are composed by sectoral-technological Innovation Systems


REGIONAL INNOVATIONS SYSTEMS (RIS) AS PART OF A SUPERIOR INNOVATION SYSTEM

Source: Adapted from Fraunhofer, ISI, Koschatzky, Innovationssystem_und_Messung, 2011.

Inter-Firms

Relations

Innovation Services

Industrial Base

Regional

Environment

Infrastructure

R I S

Sectoral/Technological

Innovation SystemsNational & Supranational

Innovation Systems

- Universities

- Research Facilities

- TT Institutions

- Technology-related

information & training

- Consultancy

- Venture capital

- Customers

- Suppliers

- Competitors

- Sub-Contractors

- Cooperation Partners

- R&D

- Investments

- Employee

Qualification

- Firms’

branch & size

- “Milieu” /

“Innovative

culture”

- Quality of living

environment

- Educational Level of

Workforce

- Technical infrastructure

- Technology centers /

Science parks

- National

& International

policies

- Regional policies

- Financial Support

- Economic services

- Engineering

Policies

Science & Technology

Industrie‘s R&D Efforts

ACTIVITIES WITHIN AN RIS

• Research & Development (R&D)• Acquisition & Expansion of competencies and skills• Formation of new product markets • Product development based on markets• Establishment & Adaption of Institutions• Internal/external learning• Creation & Adaption of Laws & Regulations• Learning, Consulting & Networking activities• Start-up and entrepreneurial activities• Financial support & funding• Consulting and knowlegde transfer


DISCUSSION

• Which „RIS“ exist in the Carribbean?

• How are they characterized (sectoral/technological, geographic, part of common value chain, etc.)?

• Which actors are involved in what roles and are there anycrucial actors?

• What is a sucessful RIS for you?

MODELLING OF INNOVATION SYSTEMS

Source: Adapted from Koschatzky, 2005.

Demand Framework conditions

Political

system

Innovation relevant infrastructure

Enterprise

systemInter-

mediaries

Education

and

research

system

Education

ROLE OF UNIVERSITIES IN RIS: EXAMPLE „REGIONAL IMPACT OF AN

UNIVERSITY OF APPLIED SCIENCES“

Development of new products,

methods and services

Practical oriented education

(Full and part time degree programs,

dual study program)

Vocational training, courses

High quality

of teaching

Individual skills

R&D

Inno-

vation

Labour

market

Enhanced

(regional)

competitiveness

UAS

Typology of RIS

Governance Dimension

providing the soft infrastructurefor innovation support - with

three modalities: grassroots RIS, network RIS, dirigiste RIS

Business Innovation Dimension

describes the positioning of firmstowards each other, the outside world, relations to consumers & producers in the market place

TWO DIMENSIONAL CLASSIFICATIONSTRUCTURE

Braczyk et al., 1998, Cook/Heidenreich, 2004

1A) GOVERNANCE DIMENSION –GRASSROOTS RIS

• Features:

– Initiation Process of the RIS is locally organized

– Funding comprises a mix of grants, loans of local origin (banks, localgovernment, local chamber of commerce)

– Research competence is highly applied, near-market

– Level of technical specialisation is low

– Supra-local coordination is low

• Examples:

– Tuscany (Italian industrial districts) in the 1970ies

1B) GOVERNANCE DIMENSION –NETWORK RIS

• Features:

– Initiation of tech-transfer actions are multilevel

– Funding is guided by agreements amongst stakeholders

– Research competence is mixed, pure & applied activities

– System coordination is high (many stakeholders)

– Specialisation is flexible due to a wide range of demands from global tosmall-firm scale

• Examples:

– Baden-Württemberg

1C) GOVERNANCE DIMENSION –DIRIGISTE RIS

• Features:

– Initiation of action is a central government policy product

– Tech transfer activities are animated from outside

– Research is rather basic, fundamental relating to the needs of (statelyowned) firms in or beyond the region

– High level of coordination and specialisation

• Examples:

– Metropolitan research labs in France (Rhône-Alpes, Midi-Pyrénées, Brittany) followed by a technopole policy

2A) BUSINESS INNOVATION DIMENSION -LOCALIST

• Features:

– A few or no large indigenous firms, few branches of externallycontrolled firms

– Research outreach of firms is not high

– Few major public R&D resources, more smaller private ones

– High degree of associationalism amongst entrepreneurs and regional policy makers

• Example:

– Finnish region around Tampere

2B) BUSINESS INNOVATION DIMENSION -INTERACTIVE

• Features:

– Reasonable balance between small & large firms (indiginous as well asforeign directed)

– Widespread access of regional research to foreign innovation sourcing

– Balanced mix of public & private research stakeholders (headquarter oflarge firms, regional government)

– Highly associative, many industry networks etc.

• Example:

– Baden-Württemberg, Catalonia

2C) BUSINESS INNOVATION DIMENSION -GLOBALIZED

• Features:

– Domination by global corporations, supply chains of dependentSME

– Research orientation is internal and highly privatistic

– Interests of large firms governs the regional cooperationactivities

• Examples:

– North-Rhine Westphalia, Singapore

MATRIX OF RIS – TYPOLOGY & EVOLUTION

36Source: Cook et al., 2004, Fig. 0.1

Grassroots Network Dirigiste

Tuscany

Catalonia

Brabant

Denmark

Baden-Württemberg

Singapore

Gyeonggi

Tampere

Tohoku

Slovenia

Wales

North-Rhine Westphalia

Lo

cali

st

Inte

racti

ve

Glo

balized

Examples of different RIS; arrows indicate direction of RIS movement 1995 - 2005

> Governace

dimension

> B

usin

ess

dim

ensio

n

DISCUSSION: WHERE DO YOU SEE YOURRIS TODAY AND IN 10 YEARS?

Grassroots Network Dirigiste

Lo

cali

st

Inte

racti

ve

Glo

ba

lized

> Governace

dimension>

Busin

ess

dim

ensio

n

CONCLUSION RIS

• Analysis of systemic innovation suggests rather a use of regional than national innovation system approaches. Spatial proximity and personal communication playan important role in innovation processes.

• Due to globalisation, the rise of knowledge intensive industry & clustering RIS areevolving and changing their shapes.

• Classification scheme helps to analyse and compare key drivers and identifypotential successful policy strategies.

• Several methods & tools are available to analyse a RIS and certain functions anddraw conclusions for policy makers.

• Intellectual Capital Reporting (ICR) is considered as one of them focused on knowledge based items.

SHORT SUMMARY OF THE LAST WORKSHOP: “INTELLECTUAL CAPITAL REPORTING”

Session 2

39

Sectors / Technologies:

retrospectively,

prospectively

INTELLECTUAL CAPITAL REPORTING AS AN ANALYTICAL TOOL TO ANALYZE RIS

Source: Adapted from Fraunhofer, ISI, Koschatzky, Innovationssystem_und_Messung, 2011.

Actors:

Companies,

Science,

PolicymakersInnovation processes:

micro – meso – macro

Political system

(state / EU)

Economic

System

Education and

Science System

Analyses & Methods:

Evaluation (ex post,

monitoring, ex ante)

Foresight, Scenarios,

Road maps, Policy-

Analysis, Instit. analysis,

Network analysis,

Intell. Capital Reports

Indicators:

Corporate data

Sectorial techno-

economic performance

Bibliometrics

Regulatory data (e.g.

norms, standards)

RIS

DEFINITION

The term “Intellectual Capital” (IC) refers to the (intangible) resources on which the organisationrelies in the broadest sense, including not only human capital resources, but those of the organisation itself and its relations with its environment. “ (Leitner et al., 2013)

CATEGORIES OF INTELLECTUALCAPITALThe intellectual capital is divided into three areas:

• Human Capital: skills and competencies of staff, as well as theirmotivation and learning ability

• Structural Capital: environment that employees need to workproductively (incl. structures, processes and procedures)

• Relational capital: extent, to which the institution is interlinked withexternal partners and perceived by interested parties

GROWING IMPORTANCE

In 1978: intellectual capital were only 5% of all assets

Nowadays, more than 80% of all assets

Up to 90% of the value created by a firm is estimated to comefrom the management of the firm’s intellectual capital

Source: Chareonsuk and Chansa-ngavej (2008)

CHARACTERISTICS OF THESEKNOWLEDGE-BASED ITEMS

1. Partial Excludability (not fully controllable assets)

2. Nonmarketability (Imperfect (intransparent) or non existing markets; problems with valorisation in existing markets)

3. Interdependence between different intangibleitems (i.e. R&D expenditure and employeecompetences or brand value )

Source: Lev (2005)

SO WHAT IS THE „PROBLEM“ WITHINTELLECTUAL CAPITAL?

• Valuation problems

– Uncertain future concerning potential revenues from IC implementation

– Risky and uncertain future development of IC

• Measurement problems

So which is the appropriate category/single item of IC we shouldprimarily invest in, in order to obtain our strategic goals?

Source: Lev (2005)

INTELLECTUAL CAPITAL REPORTING (ICR) FOR KNOWLEDGE-BASED INSTITUTIONS & ACTORS OF THE INNOVATION SYSTEM!

• New challenges for universities, businesses and policy-makers andtheir management, the significance of strategic managementincreases

• The “classical” strategic management approaches do not work for these knowledge intensive, stakeholder-oriented institutions

• ICR establishes a common understanding and university-business-model-oriented language

• Evolution: ARCS > AKWB model & Austrian HEI model

INTELLECTUAL CAPITAL REPORTING MODELS: 1. ARCS (RESEARCH INST.)

Source: Koch et al (2000)

ARCS (Austrian Research Center Seibersdorf) Intellectual Capital Report Model

INTELLECTUAL CAPITAL REPORTING MODELS: 2. AKWB (INDUSTRY-BUSINESS)

Arbeitskreis Wissensbilanz Germany (AKWB) Model

visi

on

Business Processes

human

capitalstructural

capitalrelational

capital

other

ressources

Business EnvironmentOpportunities & Risks

Intellectual Capital

Knowledge Processes

InitialSituation

ExternalImpact

bu

sin

ess

stra

tegy

measu

r

es

businesssuccess

EUROPEAN INCAS GUIDELINE HOW TO BUILD ICR:

www.akwissensbilanz.org/Infoservice/Infomaterial/European%20ICS%20Guideline.pdf

Source: Adapted from European Incas Guideline & Arbeitskreis Wissensbilanz

THE AUSTRIAN INTELLECTUAL CAPITAL REPORTING MODEL: FOR UNIVERSITIES

Model of IC Reporting in Austrian universities

Source: Leitner, 2004

BENEFITS OF ICR WITHIN ORGANISATIONS

• Defines/updates the mission statement

• identifies priorities in research & teaching

• communicates strategy throughout organization & starts discussion on intangible value drivers and success factors

• allows the alignment of individual goals with institutional objectives

• links strategic objectives to long-term targets and annual budgets

• promotes an internal process of learning about the institution's structure and performance

• monitors the achievement of goals and assesses the organisation'sperformance over the course of time

Source: Leitner et al. (2013, p. 9, p. 41)

BENEFITS OF ICR OUTSIDE ORGANISATIONS

• improves the level of transparency

• provides comprehensive and valuable information to stakeholders (students, teaching personnel and researchers, Ministries, funding agencies, businesses, and society as a whole)

• can facilitate the presentation of results, which could contribute to attracting funds and to enhance competitiveness in general

Source: Leitner et al. (2013, p. 42)

KEY DRIVING FACTORS, REGIONAL INNOVATION SYSTEMS AND INTELLECTUAL CAPITAL REPORTING

Session 3

52

THE IMPORTANCE OF DRIVING FACTORS

• As seen, ICR can be a valuable steering instrument due to several reasons, especially in knowledge-intensive institutions (& economies) because of their mainly intangible inputs and outputs.

• The regional innovation systems (RIS) approach is based on a tight collaboration of several groups of stakeholders that is beneficially served by a common “language” and understanding of driving factors.

• Especially the definition of Human, Structural and Relational Capital is well covered by the ICR concept and its driving factors.

THE IMPORTANCE OF DRIVING FACTORS

• Therefore, the resource base of innovation within a system can be commonly assessed and further supported by developing these driving factors.

• Stakeholders from economy as well as science can work on “shared” driving factors and focus on them in course of their single institutional strategies.

APPROACH TO DEFINE KEY DRIVING FACTORS

FOR RIS BY CONVERGING THEORIES

• Starting in the 1980ies new theories were introduced to explain theparadigmatic shift from production to knowledge society

• Following challenges had to be adressed:

– Scientific-technological excellence

– Innovation and institutional/regional learning

– New policy mechanisms on a (supra)national level

– New regional orientation due to internationalisation, adaption and imitationof growth paths

NEW ECONOMIC GEOGRAPPHY >> INDUSTRIAL SITE MODELS

Industrial site and regional models including innovation and technological development, Wiedenhofer (2012).

56

EXAMPLE FOR THE IDENTIFICATION AND SELECTION

PROCESS OF KEY INNOVATION DRIVERS

(rix…indicators of relevance, and are average values

of the corresponding factors).

Source: Wiedenhofer, 2012

The comparative literature review contains three thematic areas:

• Industrial site concepts & models including innovation;

• ICR of regional networks & complementary knowledge management literature;

• A branches specific study on research, technology and innovation of the Machinery &

Metalware Industry (MMI) in Austria.

DEFINITION AND LEGITIMISATION OF KEY INNOVATION DRIVERS – EXAMPLES



Source:

Wiedenhofer,

2012

EU-PROJECT LEGEND (2013-1-SK1-LEO05-06361)

• Implements Intellectual Capital Reporting in the Slovakian region of Kosice for SMEs and partners of SMEs (such as universities and research institutions)

KEY DRIVERS APPLIED TO AN IT CLUSTER: CASE STUDY LEGENDGroup work:

Read the Case Study „KEY DRIVERS FOR THE KOŠICE REGION”

Form 6 working groups (trying to involve different actors SMEs, HEIs & policy-makers) and focus on one selected driver from the area „Structural capital“. Scientific Facilities

New Technologies

IP Rights

Geographic Proximity of Oranizations

Institutions for Knowledge Transfer and Support

Internationalization

Discuss Current Situation / Status Quo

Desired State / Target

What is needed to reach this target?

Share your finding with all participants 2013-1-SK1-LEO05-06361

CONCLUSION

• Innovation processes of companies (especially SME) often include externalstakeholders and structures

• „Territoriality“ of knowledge creation and exchange and learning processes areimportant

• „New“ growth models (industrial site models) including innovation and learning canbe used as a base to identify key driving factors.

• Assignment of such driving factors to IC defines the base for ICR with focus on innovation including micro- and macroeconomic elements.

• IC as a common language supports and defines the interfaces of includedstakeholders and thus further regional development.

• From a scientific point of view this approach includes a convergence of different concepts – new economic geography & related site models, innovation & systemresearch and the classical IC management.

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