Does Portugal Need Innovation? …How? FLAD: Lisbon, 26 June 2002 Center for Innovation, Technology...
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Transcript of Does Portugal Need Innovation? …How? FLAD: Lisbon, 26 June 2002 Center for Innovation, Technology...
Does Portugal Need Innovation?
…How?
FLAD: Lisbon, 26 June 2002
Center for Innovation, Technology and Policy Research, IN+Instituto Superior Tecnico
http://in3.dem.ist.utl.pt
Manuel Heitor
1. The Context: “away but fast!”
2. A Programme to foster Innovation for Portugal
3. The Workshop:Learning by comparing
Strategies and recommendations
Contents
The CONTEXT
Nathan Rosenberg (2001):
“unceartinty in the realms of both science and technology ... have enormously important consequences and a main concern is how organisations and incentives migth be modified to accommodate these uncertainties.”Fonte: OECD(2001), “Social Sciences and Innovation”
Chris Freeman (2001):
“There is an irreducible uncertainty about future political, economic and market developments ....,technological innovations may actually increase it, since they add to the dimensions of general business uncertainty, the dimension of technological uncertainty.”
Fonte: SPRU (2001)
Technological Change: materials, IPTS(1999)
STEELS
CAST IRON
IRON
COOPER
ALLOYSTEELS
GLASSY METALS
AL-LITHIUM ALLOYS
DUAL PHASE STEELS
MICROALLOYED STEELS
BRONZE
SKIN FIBRE GUMS
RUBBER
LIGHTALLOYS
SUPER ALLOYS
TITANIUMZINCONIUMETC
NEW SUPER ALLOYSDEVELOPMENT SLOWMOSTLY QUALITYCONTROL ANDPROCESSING
CONDUCTINGPOLYMERS
HIGH TEMPERATUREPOLYMERS
HIGH MODULUSPOLYMERSBAKELITE
NYLON
WOOD
PAPER
STONEFLINT
POTTERT
GLASS
CEMENT
REFRACTORIES
PORTLANDCEMENT FUSED
SILICA CERMETS
EPOXIES
POLYESTERS
COMPOSITES
POLYMERS
METALS
CERAMICS
POLYMERS
COMPOSITES
CERAMICS
METALS
ALLOYS
10 000 BC 5000 BC 0 1000 1500 1800 1900 1940 1960 1980 1990 2000 2010 2020GOLD
CERAMIC COMPOSITES
COMPOSITESMETAL-MATRIX
SURFACEENGINEERING
RE
LA
TIV
E I
MP
OR
TA
NC
E
SUPERCONDUCTORSTOUGH ENGINEERING
CERAMICS
KEVLAR
BRICKS (with STRAW)
IVORY
10000 BC5000 BC
0 1000 1500 1800 1900 1940 1960 1980 1990 2000 2010 2020
Technical Change: perspectives
The Convergence: telecommunications and computers ... The QUESTION : scope and scale
PRODUCTS
PRODUCT
•more technologies to produce each product
•more products produced from a given technology
Source: von Tunzelmann (1999))
TECHNOLOGIES
PROCESSES
TECHNOLOGY
PROCESSES
The question
In a context of increased uncertainty and accelerated rate of technological change, for which knowledge and innovation are critical factors for social and economical development,
– Where does Portugal stands?– How to promote a System of Innovation and Competence Building?
...fostering partnerships for innovation!
Innovation in EUCommunity Innovation Survey: CIS 2 (Conceição & Ávila, 2001)
IrelandAustria
Germany
Netherlands
UK
Sweden
Norway
France
Luxembourg
Finland
Belgium
Portugal
0%
20%
40%
60%
80%
100%
0% 20% 40% 60% 80% 100%
Share of Innovative Firms in Manufacturing
Sh
are
of
Inn
ova
tive
Fir
ms
in S
ervi
ces
Business expenditure on innovation Community Innovation Survey: CIS 2 (Conceição & Ávila, 2001)
Ireland
GermanyAustria
NetherlandsUK
Sweden
NorwayFrance
Finland
BelgiumPortugal
0%
20%
40%
60%
80%
0 0,02 0,04 0,06 0,08
Expenditure in Innovation (Share of Turnover)
Sh
are
of
Inn
ova
tive
Fir
ms
*only industry
Profiles of Innovation Objectives(Conceição & Ávila, 2001)
0%
10%
20%
30%
40%
50%
60%
70%
80%
Reduce energyconsumption
Fulfillingregulations ansstandards
Reduceenvironmental
damage
Replaceproducts being
phased out
Reduce materialconsumption
Improveproduction
flexibility
Reduce labourcosts
Extend productrange
Open up newmarkets or
increase marketshare
Improvingproduct quality
Sh
are
of
Fir
ms C
on
sid
eri
ng
Each
Ob
jecti
ve a
s V
ery
Im
po
rtan
t
Euro Average Portugal
Europe
Portugal
Profiles of Hampering Factors (Conceição & Ávila, 2001)
0%
10%
20%
30%
40%
50%
60%
Lack o
f custo
mers
responsiv
eness
Regula
tions a
nd
sta
ndard
s
Lack o
f in
form
ation o
n
mark
ets
Hig
h e
conom
ic r
isks
Lack o
f in
form
ation o
n
technolo
gy
Lack o
f appro
priate
sourc
es o
f finance
Hig
h innovation c
osts
Org
aniz
ational rigid
itie
s
Lack o
f qualif
ied
pers
onnel
Sh
are
of
Fir
ms w
ith
Seri
ou
sly
Dela
yed
Pro
jects
Euro Average Portugal
Europe
Portugal
Innovation and Industrial Sector (Conceição & Ávila, 2001)
0.0% 20.0% 40.0% 60.0% 80.0% 100.0%
Textiles and Apparel
Wood and Furniture
Leather
Food, Beverages and Tobacco
Pulp, Paper and Publishing
Other
Basic Metals and Fabricated Metal Products
Non-Metalic Minerals
Rubber and Plastic
Transport Equipment
Machinery and Equipment
Chemicals
Electrical and Optical Equipment
Share of Innovating Firms
High and
Medium-High Technology
Medium-Low
Technology
Low
Technology
Average Annual Real Value Added Growth of knowledge Based Industries
OECD(2000)OECD(2000)
UK*
Belgium
Portugal**
Greece*
Sweden***
NL*Austria
Japan
Norway
Canada
Denmark
Spain***
Denmark
Mexico
ItalyUS
France
Korea
Germany
0
2
4
6
8
10
12
14
0 10 20 30 40 50 60
Share in Business Sector Value Added of Knowledge Based Industries (share year 1996 except: *1995;**1993; ***1994)
Ave
rag
e A
nn
ual
Rea
l V
alu
e A
dd
ed G
row
th
of
Kn
ow
led
ge
Bas
ed I
nd
ust
ries
(19
85-s
har
e ye
ar)
R&D Expenditure (OECD)
Scale vs Intensity
Sweden
Finland Japan
France
Germanythe Netherlands
Denmark
UK
US
Belgium
Austria
Ireland
Italy
SpainPortugal
Greece
0
0,005
0,01
0,015
0,02
0,025
0,03
0,035
0,04
100 1000 10000 100000 1000000
Scale- Total Expenditure in R&D ($PPP; logarithmic scale)
Inte
nsi
ty-
Sh
are
of
GD
P s
pen
t o
n R
&D
…perspectives for “Change”:Scientific “Productivity” and inter-institutional cooperation EC Benchmark of S&T Policies, September 2001
Share of R&D funding (OECD) OECD, S&T Databases, Sept. 2001
United States
United Kingdom
Turkey
Switzerland
Sweden
Spain Slovak Republic
Portugal
Poland
Norway
New Zealand
Netherlands
Mexico
KoreaJapan
Italy
Ireland
Iceland
Hungary
Greece
Germany
France
Finland
Denmark
Czech RepublicCanada
Belgium
Austria Australia
Business
Higher Education Government0
100
100
0
100
Industry-dominated systems
Balanced Industry+ /government systems
Balanced Industry/government+ systems
Government-dominated systems
Innovation:
Why?...Which specific driving forces ?
1. Productivity
2. Sustainability
3. Social Cohesion
4. Critical Infrastructures
5. Inclusiveness• Resources for Innovation• Industrial structure• The knowledge-based industries• R&D Scale vs intensity• Institutional development• Social capital
1. Productivity
2. Sustainability
3. Social Cohesion
4. Critical Infrastructures
5. Inclusiveness• Resources for Innovation• Industrial structure• The knowledge-based industries• R&D Scale vs intensity• Institutional development• Social capital
the time frame
the spatial dimension(local/regional/national)
the time frame
the spatial dimension(local/regional/national)
Disparities in Productivity and Income
AustriaBelgiumDenmark
The Netherlands
United Kingdom
FinlandFranceGermanyGreeceIrelandItaly
NorwayPortugalSpainSweden
United StatesEU-14
102128929312310575108106121
126568493100120103
GDP Per Hour WorkedAs % of OECD Average
-4-500-9-5-45
-11-26
-172
13-3-9-1-5
Effect ofWorking Hours
981239294113100711139695
1095897899111898
GDP Per Person EmployedAs % of OECD Average
2-2211-5-17-4-12-18-50
122
-26-10
10-8
Effect ofLabor ForceParticipation
10010110388979658959196
1226071889212890
GDP Per PersonAs % of OECD Average
1. Productivity and Innovation: Why do we care?
• Aggregate productivity is ultimately a measure of economic development
– And there is the discussion of the productivity slowdown!
• At firm level, it is an important measure of competitiveness• Limited understanding of the relationship!
While much attention has been given to digital technologies,, linking information technologies with increasing productivity remains to be explained, requiring
processes of organizational change...
e.g.,Lundvall (2001)
While much attention has been given to digital technologies,, linking information technologies with increasing productivity remains to be explained, requiring
processes of organizational change...
e.g.,Lundvall (2001)
General Findings on Productivity(Conceição & Veloso, 2002)
• Wide dispersion in productivity levels across firms– Across firms in the same sector– Sharing similar type of producing technologies – Selling the same type of goods and services
• This wide dispersion across firms is persistent over time• Entry and exit is are important sources of aggregate productivity
growth• Productivity increases are not associated with employment reductions
at the firm level
The analysis (e.g. Stockey, 1991, Quartely J. Economics) shows:• the need to evolve in the “value chain”;• the increasing importance of knowledge accumulation for economic prosperity, promoting social capital.
The analysis (e.g. Stockey, 1991, Quartely J. Economics) shows:• the need to evolve in the “value chain”;• the increasing importance of knowledge accumulation for economic prosperity, promoting social capital.
The Porter Hypothesis:
environmental regulation may lead, in the short term, to additional costs at the firm level, but will give rise, at the long term, to the adoption of
new technologies and innovation, leading to growth
Static model Dynamic model
2. Environment and Innovation :The approach...
The Environmental Kuznets Hypothesis: Economic growth and environmental degradation are related through an “U” inverted curve
• How far does this applies to Material Flows ?
The Environmental Kuznets Hypothesis: Economic growth and environmental degradation are related through an “U” inverted curve
• How far does this applies to Material Flows ?
GDPGDP
DMI vs GDP: the International trend(Canas, Conceição &Ferrão, 2002)
Adapted from Bringezu and Schütz, 2000, Total Material Requirement of the European Union, European Environment Agency, Technical report No 55.
(1988-1997)
Humm! It looks
different!
3. Knowledge for inclusiveness: Why?
A specific issue: EUROPEAN DIVERSITYA specific issue: EUROPEAN DIVERSITY
•“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)
Institutional DevelopmentMarket Regulation and Employment Protection
Nicoletti, Scarpetta & Boylaud; OECD (2000)
The analysis
1. A dual society!.... with considerably low levels of “thrust”,...in a context particularly influenced by low educational and training levels.
2. The “intensity effect” has been shown to dominate over “structural effects” on innovation;
3. Increase in productivity towards the sustainable development requires progressing in the “value chain”, producing more complex products and systems, together with a process of organizational change, beyond introducing new technologies;
4. The institutional development, as measured in terms of market liberalization and employment protection, does not favour innovation.
The need to foster public/private partnerships for innovation!...
Fostering partnerships which promote the integration of policies, but also the diversification of actions:
– Funding the quality of supply: knowledge production– Promoting new markets: knowledge diffusion
Partnerships for Innovation:
Some critical strategies
but also:
• people: new competences
• scope: national and/or international
requires:• time: long-term perspectives• context: specific sectorial and/or regional issues• value: promoting market strategies through “CLUSTERS”
Promoting a System of Innovation and Competence Building: …clusters with diversified
partnershipsChain Linked Model of Innovation
Kline & Rosenberg
Technology platforms
Potential Markets
Invention/analytical design
Detailed design & Test
Re-design & Production
Distribution & market
Knowledge
Research
Research Agendas
Thematic Mobilization Programmes
Networks of Scientific Cooperation
Knowledge diffusion
Post-Grad Training
Individual Mobility
NTBF´s
Promoting a System of Innovation and Competence Building:
The Technology and Innovation gap…
Clusters and INSTITUTIONAL NETWORKS to mediate:
•mediate information exchange
• knowledge creation
•capacity for collective action
•potential for interactive learning
•efficacy of voice mechanisms
Clusters and INSTITUTIONAL NETWORKS to mediate:
•mediate information exchange
• knowledge creation
•capacity for collective action
•potential for interactive learning
•efficacy of voice mechanisms
A new development: Pt.eng_designPortuguese Engineering Design Research and Education Agenda
A Program on Innovation and Productivity for Portugal
Goal: To extend human capability in Portugal through innovation, exploring international cooperation and industry-science relationships
1. People: Tools for Understanding to develop human resources and to promote the generation and growth
of international networks of experts.
2. Knowledge:
3. Ideas:
Understanding for Actionto conduct leading-edge, high quality research in collaboration
with leading US and European groups on specific problems that hinder the growth of productivity in Portugal, in a way to promote the advancement of knowledge about innovation for Portugal.
Action for Resultsto engage in specific, results-oriented initiatives, leading to meaningful
improvements in innovation and productivity in the medium term