Manufacture

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0% 10% 20% 30% 40% 50%

Proportion of Enterprises w ith Innovating Activities involved in Cooperation (%)

Pro

port

ion o

f In

novating E

nte

rprises (

%)

Coke and Chemicals

Electrical and Optical Equipment

Machinery and Equiment non-NEC

Basic Metals and Fabricated Products

Rubber, Non-Mettalic

Food Product

s

Textiles and Leather

Manufacturing NEC and Recycling

Wood, Pulp, Publishing

Transport Equipment

Sectoral systems of Innovation and production in Portugal:

CIS II - CIS III: inter-firm cooperation continues too low: a structural weakness?…structural weakness?…

A análise ...1

“efeito de estrutura”• A composição sectorial da economia portuguesa tem evoluido no sentido de um peso maior do sector dos

serviços. • Contudo, o sector da indústria transformadora é ainda mais importante em relação a muitos países da

OCDE, e a distribuição do emprego pelos sectores produtivos portugueses permaneceu estável até ao início dos anos noventa, assim como fortemente dominada pelos sectores:– têxtil– calçado – produtos alimentares

A análise ...2

• “efeito de intensidade”

as deficiências que Portugal revela ao nível estrutural estão também a constrangir a inovação em muitas indústrias, devido sobretudo a: • baixa produtividade• baixo nível educacional da população activa• despesa reduzida em I&D • fraca ligação ás fontes de informação sobre novos conhecimentos

17%

19%

20%

23%

36%

45%

49%

Transport equipment andmanufacturing NEC

Basic metals and fabricatedmetal products

Food products; beveragesand tobacco;Textiles and

leather

Wood;pulp andpaper;publishing

Electricity; gas and waterdistribution

Coke;chemicals;rubber andplastic;other non-metallic

minerals

Machinery and equipmentNEC;Electrical and optical

equipment

Inovação em Portugal por sector industrial

A análise ...3

o “efeito de intensidade” tem revelado dominar em muitas situações, sendo particularmente influenciado pelo baixo nível educativo e de qualificação da população.

• O financiamento directo da I&D pela indústria, sendo reduzido, não tem tido impacto significativo: é sobretudo o resultado da ausência, no passado, de políticas integradoras de ciência e tecnologia

A análise ...5

Para além do capital individual ou mesmo agregado, o capital social, enquanto capacidade colectiva de aprendizagem , tem emergido como um conceito mais importante para o desenvolvimento socio-económico.

K DS&T System(box 1)

Economic and Social System

(box 2)

Inputs (of box 1)

Inputs(of box 2)

Outputs(of box 1)

Conceptualization of the Relationship between the S&T System and the Economic and Social System

‘K’ refers to knowledge, and ‘D’ refers to development

Outputs(of box 2)

TECHNOLOGY INTENSITYof INDUSTRIES

Concept:

–measures the effort put into R&D activities within each industry

method 1: Direct Technology Intensity:

–ratio between the expenses on R&D activities and a measure of output (typically gross output or value added)

TECHNOLOGY INTENSITYof INDUSTRIES

method 2: Considering second-round gains

–the R&D embodied in the output of an industry includes the R&D effort realized by that industry but also the R&D embodied in the intermediate goods it acquires from other industries

method 3: Taking into account the cumulative nature of R&D

–The technology intensity of an industry after several years is the sum of the technology intensity of that industry for the all the years considered

OECD INDUSTRIAL SECTORAL TAXONOMYACCORDING TO TECHNOLOGY INTENSITIES

The OECD (1996) suggests a breakdown of industries into four groups, according to their level of technology intensity:

—High Technology Intensity industries—Medium High Technology Intensity industries—Medium Low Technology Intensity industries—Low Technology Intensity industries

The classification of industries into these four groups is roughly the same for every OECD country using whichever measuring methodology.

TECHNOLOGY INTENSITIES of INDUSTRIES- USA -USA

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

Year

Tech

no

log

y In

ten

sit

y

Aircraft

Office &computing machinery

Radio, TV &Communication Equipment

Drugs & Medicines

TECHNOLOGY INTENSITIES of INDUSTRIES- SWEDEN -SWEDEN

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

Year

Tech

nlo

gy In

ten

sit

y

Drugs & Medicines

Radio, TV &Communication Equipment

Aircraft

Office &computing machinery

TECHNOLOGY INTENSITIES of INDUSTRIES- GERMANY -GERMANY

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993

Year

Tech

no

log

y In

ten

sit

y

Aircraft

Drugs & Medicines

TECHNOLOGY INTENSITIES of INDUSTRIES- FRANCE -FRANCE

0

0.1

0.2

0.3

0.4

0.5

0.6

Year

Tech

no

log

y In

ten

sit

y

Aircraft

Drugs & Medicines

Radio, TV &Communication Equipment

TECHNOLOGY INTENSITIES of INDUSTRIES- FINLAND -FINLAND

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

0.45

0.5

Year

Tech

no

log

y In

ten

sit

y

Radio, TV &Communication Equipment

Drugs & Medicines

Office &Computing machinery

TECHNOLOGY INTENSITIES of INDUSTRIES- ITALY -ITALY

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

0.45

Year

Tech

no

log

y In

ten

sit

y

Aircraft

Drugs & MedicinesOffice &

Computing machinery

Radio, TV &Communication Equipment

TECHNOLOGY INTENSITIES of INDUSTRIES- SPAIN -SPAIN

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

0.45

Year

Tech

no

log

y In

ten

sit

y

Aircraft

Office &Computing machinery

Radio, TV &Communication Equipment

Purpose: to describe and explain sectoral patterns of technical change Data: UK firms between 1945 & 1979

Concept: Technological knowledge is specific to firms and applications, cumulative in development and varied amongst sectors.

Original Neoclassical formulation Pavitt´s formulation

• New technology instantly diffuses across capital.

• Make exogenous the production of technology and innovations.

• Do not reflect the variety of the sources.

• Three part taxonomy based on firms:a) Supplier dominatedb) Production intensivec) Science based

•Make endogenous the production of technology and innovations.

•Technical change is largely a cumulative process specific to firms.

Pavitt´s formulation

Institutional sources of main knowledge inputsInstitutional sources of main knowledge inputs

7% Public technological infrastructure

34% Other industrial firms

59% Within the innovating firms themselves

Analysis of PAVITT´s dataAnalysis of PAVITT´s dataCompare sectors in terms of:The sectoral sources of technology used in a sector;The importance of intramural and extramural knowledge sources, and of product and process innovation (institutional sources and nature of the technology);The characteristics of innovating firms: their size and principal activity.

Most of the knowledge applied by firms in innovations is not general purpose and easily transmitted and reproduced, but appropriate for specific applications and appropriated by specific firms.

Characteristics of innovating firms: size, technological Characteristics of innovating firms: size, technological diversification, patterns of production and use of innovationsdiversification, patterns of production and use of innovations

Innovating firms principally in electronic and chemicals, are relatively big, and they develop innovations over a wide range of specific product groups within their principal sector, but relatively few outside.

Firms principally in mechanical and instrument engineering are relatively small and specialized, and they exist in symbiosis with large firms, in scale intensive sectors like metal manufacture and vehicles, who make a significant contribution to their own process technology.

In textile firms, on the other hand, most process innovations come from suppliers.

Analysis based on the innovating firm: Analysis based on the innovating firm:

Pavitt´s taxonomyPavitt´s taxonomyDifferent sectoral technological trajectories:Supplier dominatedProduction intensiveScience-based

Sectoral differences :Sources of technologyUser needsMeans of appropriating benefits

Sectoral technological trajectoriesSectoral technological trajectories

Supplier dominated firmsSupplier dominated firms

Characteristics:Mainly small;Weak in-house R&D and engineering capability;Appropriate less on the basis of technological advantage;Based mainly on professional skills, aesthetic design, trademarks and advertising;Technological trajectories defined in terms of cutting costs;Most innovations come from suppliers of equipment and materials.

Manufacturing

Agriculture

Many kindsof

Services

House building

Informalhousehold

Production intensive firmsProduction intensive firms

Steel

Glass

Instruments

Food

Machinery

Characteristics:Small (Instruments and Machinery) or large;Some kind of in-house R&D and strong engineering capability;Based mainly on process secrecy and know-how, technical lags, patents, dynamic learning economies, design know-how;Technological trajectories defined in terms of cutting costs or product design;Produces high portion of their own process technology.

Science-based firmsScience-based firms

Electronics/Electrical Chemicals

Characteristics:Mainly large;Strong in-house R&D and engineering capability;Based mainly on R&D know-how, patents, process secrecy and know-how, dynamic learning economies;Mixed technological trajectories;Produces high portion of their own process technology.

Technological linkages and changing trajectoriesTechnological linkages and changing trajectories

SupplierDemanded

firm

Scale-intensivefirms

Science-basedfirms

SpecializedEquipmentsuppliers

A revised A revised Pavitt´s Pavitt´s taxonomytaxonomy

Different sectoral technological trajectories:Supplier dominatedScale- intensiveInformation-intensiveScience-basedSpecialiuzed suppliers

Sectoral differences :Size of firms (big in chemicals, aircraft, electronic; small in machinery, software)Type of product (price sensitive vs performance sensitive)Objectives of Innovation (product vs porcess vs both)Sources of innovation (suppliers; customers; in-housse; basic research)Locus of own innovation (R&D labs in Chemicals and electronics; engineering dept in automotive; system dept in services)

Supplier-dominated

Scale -intensive

Information-intensive

Science-based Specialized suppliers

Core sectors

Agriculture Services Traditional

manufacture

Bulk materials

Civil engng.

Finance Retailing Publishing travel

Electronics chemicals

Machinery Instruments software

Sources of technology

Suppliers Production learning

Production engng.

Production learning

Design offices

Specialized suppliers

Software & system Dept.

Specialized suppliers

R&D Basic

Research

Design Advanced

users

Technology strategy

Technology from elsewhere

Incremenstal integration of chnges

Diffusion of best practices

Information processinh systems

Exploit basic R&D

Complex products

Integrate technology incrementally

ÍNDICES DE ACUMULAÇÃO ÍNDICES DE ACUMULAÇÃO TECNOLÓGICATECNOLÓGICA

Or ientation-basedindustry groups

USA Germany

1970 1993 1970 1993

Resour ce-intensive 0,83 0,87 0,54 0,77

Labour-int ensive 0,49 0,68 0,95 0,98

Scale-intensive 0,85 0,81 1,13 1,10

Special ised-suppl ier 1,23 1,13 1,32 1,10

Science-based 2,14 1,70 0,88 0,79

Sweden Nether lands Spain Portugal

1970 1993 1970 1993 1970 1993 1970 19931,22 1,26 1,82 1,96 1,91 1,29 1,60 1,240,60 0,60 1,01 0,89 1,43 1,14 2,69 3,911,10 1,04 0,74 0,80 0,76 1,30 0,59 0,591,09 1,06 0,72 0,64 0,56 0,59 0,34 0,580,58 0,76 0.75 1,01 0,27 0,51 0,28 0,15

O Processo de Mudança O Processo de Mudança TecnológicaTecnológica

CapacidadeTecnológica

AcumulaçãoTecnológica

(aprendizagem)

As bases necessárias para gerar e gerir a mudança tecnológica

(1) Conhecimento, “skills” e experiência

(2) Instituições e ligações intra e inter-empresas

MudançaTecnológica

(a) Introdução de tecnologia “embodied” em novos produtos e/ou novos processos.

(b) Adaptação e optimização da capacidade produtiva existente

Capacidadede Inovação

Componentes de sistema de produção:

• capital

• “know-how” e “skills” da força de trabalho

• Input specs

• Organização e procedimentos de produção

OutputIndustrial

Indicators such as R&D intensity or patent-counting fail to appreciate the innovative capability of most traditional industries: technological change in fact is mainly based upon learning-by-doing and tacit knowledge rather than conventional R&D activities.

Traditional Industries

High-Tech Industries

vs.

Accumulation of technological knowledge

Technological change is intense and rapid

European industries seems to fall into the new category of skill-intensive industries (Pavitt -1987).

Skill-intensive industries (SII) characteristics are:-Small size firms

-High levels of regional concentration

-High levels of wages

-Low levels of capital intensity

-Tight web of cooperative agreements among firms

-High rates of Total Factor Productivity Growth (TFP)

-Specific nature of technological change

Aspects that play a major role in SII as source of technological change:-Internal organization of companies

-Structure of internal labor markets

-The close interaction between changes in process and products in terms of design.

- The creation process of firms and the accumulation of tacit knowledge.

The dynamics of technological changes of skill-

intensive industries are based upon localized technological knowledge.

-Relies upon a continuum of specifications of different forms of knowledge:

► Generic and Scientific Knowledge (public good)

► Tacit Knowledge (result of lengthy learning processes, highly idiosyncratic and specific to the business of the firm)

- It is costly to use elsewhere (switching costs) - Highly impure public good

Technological knowledge :

Tends to be highly localized

WHY ?

Why is this Tacit Knowledge so firm specific ?

The traditional distinction between new technologies and existing technologies appears much weaker (relevant search costs)

The generation of technological knowledge is the result of a mix of production, learning and communicating, of which R&D is only a part

Technological knowledge is embedded in the “circumstances” in witch the firm operates

Experiment, learning-by-doing, learning-by-using.

Localized Knowledge

Taci

t K

now

ledge

Deduction from general principles

Generi

c K

now

ledge

Codified Knowledge

Firms rely upon varying mixes of tacit and generic knowledge in order to generate localized technological innovations.

But more on tacit k. or more on generic k.?

Depends …

-The amount of resources devoted to implementing the accumulation of tacit knowledge by each agent in the system

-Its receptivity to technological knowledge generated by third parties

-The properties of the system in terms of connectivity and distribution of receptive agents

New technological change emerges also from the daily interaction of learning firms among themselves and with other scientific institutions

What are the main incentives to investon learning-by-doing or R&D activities?

“Firms are pushed to introduce technological innovations by pressure of demand” (Rosenberg, 1974)

Increase rate of growth of output

Investment on learning-by-doing and R&D activities

Technological Innovation

Growth of labor productivity

Lower average unit costs

Path Dependen

t

Validating Previous Hypotheses: mechanical engineering industry

-relevance of learning processes-creative recombination of existing knowledge-standard R&D activities

TechnologicalChange

-136 manufacturing firms-Time span of six years (1988-1994)-In these years, the industry recovered from the crises of the late 1980s and experienced a fast growth fueled by the demand for capital goods after 1991, with an increase in added value and TFP

Data set

Empirical Evidence

The larger are thestimulations to

capitalize on acquiredtacit knowledge

The Faster is the output growth

The faster is the rateof introduction of

localized technologicalinnovations

Generation of new localized technological

change

Increase TFP

Increase market share and output

Reduce market prices

Makes possibleHence

AndRecursive cycle

of growth

THE INDUSTRIAL STRUCTURETHE INDUSTRIAL STRUCTURE

0

5

10

15

20

25

30

35

1983 1987 1991 1995

YEARFood, beverages & tobaccoTextiles, apparel & leatherWood products & furniturePaper, paper products & printingChemical productsNon-metallic mineral productsBasic metal industriesFabricated metal productsOther manufacturing, nec

EU-13

0

5

10

15

20

25

30

35

40

1983 1987 1991 1995YEAR

Portugal

How far Industrial structure affects innovation?

0,06

0,07

0,08

0,09

0,1

0,11

0,12

0,13

0,14

0,15

0,16

0,17

0,18

1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992

Australia

Austria

Belgium

Canada

Denmark

Finland

France

Germany

Greece

Italy

Japan

Korea

Mexico

Netherlands

New Zealand

Norway

Portugal

Spain

Sweden

UK

USA

HIPÓTESES : : Perspectivas para a “mudança”Perspectivas para a “mudança”

•A noção de mudança tecnológica localizada:

•A base cientifica e tecnológica nacional

• um processo conjunto de produçãp, aprendizagem e comunicação

• um processo endógeneo, envolvendo especialização e diversificação

• a importancia do mercado, apesar da relevancia das politicas públicas

• baseado num “mix” de conhecimento genérico e tácito

…”foresight should be resisted. …the aim of policy should be to create a broad and productive science base, closely linked to higher education…”, Pavitt (1998)

CONTENTS SERVICESE-TAILERS

“THE INTERNET”

ALTERNATIVE MEDIAE-CHANNELS

Software Solutions

Develop software solutions Designed to enhance the Internet experience for both Consumers and business

Enabling Technologies

Create hardware/software solutions which enable the efficient operation of the internet

ACCESS PROVIDERS

CONSUMERCONSUMER

INTERNET SERVICES

BUSINESSBUSINESS

um caso de estudo – o sector da internetum caso de estudo – o sector da internet

Business/Customer SupportOn-line Products and Services

TraditionalCorporations

Content Services•THE GLOBE.COM•THE MOTLEY FOOL•BROADCAST.COM•MPATH•MONSTER.COM•NETCENTIVES

AlternativeMedia•ESPN•CNN•Wall St.Journal

•YAHOO

•MSN

•EARTHWEB

•VERTICALNET

•BABY CENTER•DELL•BARNES & NOBLE•CHARLES SCHWAB•CITIBANK•MACY’S

E-CHANNELS

•AMAZON.COM

•E*TRADE

•BEYOND.COM

•EBAY

•BUY.COME-tailers

Access Providers

•EARTHLINK•MINDSPRING

•AOL•EXCITE@HOME

•VERIO•COMPUSERVE•NETCOM

Service Providers

•AT&TWorldNet•Ameritech

•DOUBLECLICK•USWEB/CKS•IXL•MEDIA TRIX•RAZORFISH•ABOVENET

Software solutions•NetObjects•Real Networks•Egain•Netscape•Marimba•Inktomi•Sitara Networks•Resonate

•NetworksAssociates•WebOrder•Vignette•Ariba

IBM•Cisco IOS•Hewlett-Packard•Sun

•Cisco•Lucent/Ascend•Nortel/Bay Networks•Nexabit•Netopia•Broadcom•Verifone

Enabling Technologies

Technological Innovation

Um caso de estudo: o modelo de negócios da internetUm caso de estudo: o modelo de negócios da internet

Source: joint Venture – Sillicon Valley Network, 1999Source: joint Venture – Sillicon Valley Network, 1999

um caso de estudo – a industria de internet

•It is unlikely that technological clusters aimed at supporting service integration will emerge, unless incentives exist to integrate elements in the value chain... Hawkins (1997)

•It is unlikely that technological clusters aimed at supporting service integration will emerge, unless incentives exist to integrate elements in the value chain... Hawkins (1997)

•Evolucão contínua para uma “nova” cadeia de valor

•A necessidade de extender a análise ao contexto:

-Communidades de utilizadores

-Contexto regional/local

•Evolucão contínua para uma “nova” cadeia de valor

•A necessidade de extender a análise ao contexto:

-Communidades de utilizadores

-Contexto regional/local

•Internet business models: creative destruction, as usual !! (McKnigth et al, 2000)•Internet business models: creative destruction, as usual !! (McKnigth et al, 2000)

Promover o Capital Social num contexto de base tecnológica caso de estudo: A diversidade regional na EU

Source: Sixth Periodic Report DG XVI, 1998

análise: sistemas regionais fragmentados

RegionalGovernment

BusinessServices

SMEs

SMEs

Chamber ofCommerce

SMEs

SMEs

Largefirms

SMEs

Universities

TechnologyCenters

SectoralAssociations

SMEsSMEs

SMEs

SMEs

Largefirms

SMEs

SMEs

SMEs

SMEs

SMEs

SMEs

SMEs

SMEs

SMEs

SMEs

SMEs

SMEs

SMEs

SMEs

SMEs

TechnologyConsultants

SMEs

SMEs

Largefirms

SMEs

SMEs

Regional economy

A learning region: um sistema de inovacão regional

Regionalgovernment

Businessservices &tech. con-sultants

SMEs SMEs

Businessintermediaries:

Cham. of Comm.;Local Agencies

BICs

SMEs

Large firms;Tech. Centers;Sect. Associa-

tions

SMEs

SMEs

SMEs

Cluster

Science base:Universities;Public R&D;Laboratories

TechnologyCenters

SectoralAssociations

SMEs

SMEs

SMEs

SMEs

Largefirms

SMEsSMEs

SMEsValorisation of R&D and Tech. Transfer Office

SMEs

Global econom

y

SMEs

SMEs

SMEs

SMEs

SMEsSMEs

SMEs

SMEs

SMEsSMEs

SMEs SMEs

SMEs

SMEs

Op

en g

ate:

In

tern

atio

nal

tec

hn

olog

y tr

ansf

er

net

wor

ks

Op

en gate: In

ternation

al value ch

ains

Open gate: International business consultants & specialized business services

Open gate: International R&D/academic excellence networks

SMEs

SMEs

Regionaleconomy

Estratégias de Inovacão RegionalLandabaso et al. (1999)

– Internal coherence of the regional innovation system by connecting its different key elements: R&TDI supply with well identified Demand and business needs, from SMEs in particular.

– Increase the amount and, more importantly the quality of innovation public spending through innovation projects (bigger and better spending in this field through regional policy).

– Rationalise the regional innovation support system by raising awareness, eliminating duplications, filling gaps and promoting synergies.

Successful stories: The Regional Technology Plans

Wales (UK), Limburg (Netherlands), Lorraine (France) and Leipzig-Halle-Dessau (Germany), Central Macedonia (Greece), Castilla Y Leon (Spain) and Abruzzo (Italy).

Successful stories: The Regional Technology Plans

Wales (UK), Limburg (Netherlands), Lorraine (France) and Leipzig-Halle-Dessau (Germany), Central Macedonia (Greece), Castilla Y Leon (Spain) and Abruzzo (Italy).

O argumento…

•“With some notable exceptions, the regional developmment debate in Europe has been dominated by exogeneous models to such an extent that development tends to be conceived as something that is introduced to, or visited upon, less favoured regions, LFRs, from external doors…

• …this kind of regional policy did little or nothing to stimulate localised learning, innovation and indigeneous development within LFRs”,

Henderson & Morgan (1999)

•“With some notable exceptions, the regional developmment debate in Europe has been dominated by exogeneous models to such an extent that development tends to be conceived as something that is introduced to, or visited upon, less favoured regions, LFRs, from external doors…

• …this kind of regional policy did little or nothing to stimulate localised learning, innovation and indigeneous development within LFRs”,

Henderson & Morgan (1999)