International Journal of Education and Development using Information and Communication Technology (IJEDICT), 2008, Vol. 4, Issue 2, pp. 144-158.
A case study of the Ugandan immunisation system Agnes Semwanga Rwashana and Ddembe Willeese Williams Makerere University, Uganda ABSTRACT The role that Information Communication Technologies (ICT) plays in improving the efficiency
INTRODUCTION The role Information Communication Technologies (ICTS) play in improving the efficiencies and effectiveness of healthcare delivery has been established well.
and is characterized by uncertainty, complexity, time delays and competitive stakeholder viewpoints. ICTS offer a platform for health education which plays a major role in the prevention of many diseases.
This is clearly demonstrated in Uganda, where despite many immunization campaigns through media, health visits and improved health services management,
Developing countries such as Uganda are faced with the challenge of solving problems that lead to the delivery of poor health services,
There is need to develop systems that fit the requirements of developing countries 146 IJEDICT that are able to provide information that is critical for evaluation of services,
) ICT penetration is low in the Ugandan healthcare environments, although most of the major hospitals and the medical schools use computers for administrative purposes.
resources and lack of coordination among key stakeholders (Fraser and Mcgrath, 2000. The use of ICT technologies may increase the quality of health service delivery by providing reliable information and efficient use of resources (Rwashana and Williams, 2007.
The availability of information and communication techniques and tools enable rural communities to access health care services
3. Who are real stakeholders in the immunisation system? 4. How should such an immunization system work?
5. What kind of ICTS may be used to enhance delivery of healthcare services? 6. How can ICT tools
interactive environments and self managed e-learning. Healthnet one of the most widely implemented computer-based telecommunications systems in Sub-saharan africa, currently is being used in over 30 countries by around 10,000 healthcare workers to exchange ideas
Users mainly physicians and medical workers connect to the network through Enhancing healthcare delivery through ICTS 147 local telephone nodes to access services such as physician collaborations (Mozambique, Tanzania, Uganda.
In Uganda hand-helds (Epihandy) are being used by healthcare staff for communication (e-mail), demographic studies and surveys, consultations and treatment guidelines (Kasozi and Nkuuhe, 2003.
and the Internet is used to rapidly mobilize medical personnel and effectively coordinate laboratories and specialist services.
and capture different viewpoints of stakeholders. It is evidently that the issues that pose most challenges are systemic in nature
number of campaigns in a year, availability of allowances, sufficient time for planning and effectiveness of communication.
The key variables that play a key role in the provision of healthcare services are resources (health centres, facilities) and level of service which results from the motivation of health workers.
which in turn improves the demand for immunisation. Loop B2 is a balancing loop which represents the limiting factor resulting from increased demand as far as the effectiveness of the healthcare system is concerned.
An increase in demand results in increased workload which reduces health worker motivation resulting in reduced level of service
which affects the provision of healthcare services. An effective health system requires management of resources, effective monitoring and reporting as well as well-motivated health workers.
and minimizing missed opportunities due to stock outs. 2. Health worker motivation. The provision of immunization services requires highly motivated health workers who are trained well,
remunerated, facilitated and with acceptable workload. 3. Effective monitoring of immunization activities by carrying out regular supervisions of health units that provide immunization services. 4. Mobilization
and health education-There is need to have continuous mobilization and health education to educate the communities on the importance of immunization,
Effective mobilization and education can be attained through well-planned campaigns, multiple channels of communication, community participation, media and through the delivery of content that is relevant to the community.
From the causal loop diagram, a broad integrated view of the system is provided for the stakeholder to prioritize and set policies.
IMMUNISATION SERVICE DELIVERY IN UGANDA Healthcare services in developing countries such as Uganda in particular immunization services are provided through a decentralized system consisting of geographically spread health centres, regional hospitals
which are categorized into health districts and health subdistricts with various roles (Barenzi, et al.,2000). ) The development of health plans, policies and service delivery are channelled from the national level through the district,
and plans but it is desirable that the different health centres/hospitals offering immunization services work in a cooperative environment
and effectiveness of immunization health services provided in such a distributed structure, it is vital that information is shared
Effective data collection and sharing of information can be enhanced through the application of information and communication technologies.
Health care services like any other business involve a lot of transactions such as importation and delivery of medicines;
Various stakeholders who are important as far as the immunisation system is concerned were interviewed. The following themes were used to study the processes
The immunisation system diagram shows the number and types of different organisations or agents, key processes, activities, stakeholders and flow of information.
represents the population that utilises the immunisation services. Healthcare service sub-system: responsible for the provision of immunisation services to the population.
Immunisation management sub-system: responsible for the management, monitoring and supervision of immunisation services at the national level.
Vaccines maintenance sub-system: responsible for the management and delivery of quality vaccines. The key external agents include the government
In a resource constrained economy like Uganda, the responsibilities for planning, resource mobilization and allocation, management immunization services, storage and distribution of vaccines, supplies and equipment to the units under their supervision
which provide services for other systems of the organization (Broadbenta et al.,1999). ) For Broadbenta et al.
1999), these capabilities require the complex combination of the technical infrastructure (cabling infrastructure, hardware platform, base software platform), ICT shared services (as communications services), ICT applications (as WEB
services), the human operators and the managerial expertise to guarantee reliable services. The paper suggests the following ICT innovations (Figure 5) for effective management of resources,
Proposed ICT Framework for the Immunization Services District level: At the district level, data can be used to prepare forecasts, analysis and plans for the district.
education and disease surveillance. 156 IJEDICT Potential benefits provided by ICT in healthcare Some of the benefits that would be provided by adoption of ICT services in the healthcare immunization system are:
Communication for the ACM, vol. 47, no. 7, pp. 21-24. Musa, P. F.,Meso, P,
Communications of Associations for Information systems. Vol. 15, pp. 33. Nambaziira, S. 2006. An online tool for Monitoring and tracking vaccines and vaccine logistics utilization at district level in Uganda.
Application of information and communication technology (ICT) in health...Journal of Librarianship and Information science; vol. 38, pp. 45-55.
NON CLASSIFIE UNCLASSIFIED Organisation for Economic Co-operation and Development Organisation de Coopération et de Développement Economiques 2000 ENHANCING THE COMPETITIVENESS OF SMES IN THE GLOBAL ECONOMY:
WK1 2 TABLE OF CONTENTS SME INNOVATION IN A GLOBAL ECONOMY...3 Introduction...4 Globalisation Challenges...4 Globalisation...
17 The Foreign Direct Investment Strategy...18 Policy implications: Broadening Government Support and Coping with the Diversity of Needs...
19 The Needs of Technology Developers Looking Beyond Seed Capital...21 The Added Value of R&d for Lead Technology Users...
32 WK1 3 SME INNOVATION IN A GLOBAL ECONOMY*This paper serves as the background document for the Workshop on Enhancing the Competitiveness of SMES through Innovation at the Bologna conference.
but also greater incentives and opportunities to access the various markets and knowledge sources needed to build lasting competitive advantage through continuous innovation.
and include not only R&d based new products and services, but also improved designs and processes and the adoption of new technologies.
--New information and communication technologies facilitate global reach and help reduce the disadvantage of scale economies which small firms face in all aspects of business.
--Flexible specialisation has proven to be a particularly successful model of industrial organisation: through close co-operation with other firms SMES can take advantage of knowledge externalities
the most important goals are to promote the development of the private venture capital industry and associated services,
nonfinancial innovation advice such as consulting services; recruitment of university graduates and skilled personnel; awareness of new ideas and technologies;
and adapting existing products to the needs of customers. This explains why economists have reopened the debate on
whether some market and systemic failures disproportionately affect small firms, and why governments have increased generally the priority attached to policies directed towards SMES while focusing them more on the promotion of innovation.
and opportunities that new technologies and globalisation raise for small firms. They must also find the right balance between measures addressing generic problems related to size
and opportunities that globalisation raises for SMES as they are faced with pressures to reduce production costs, increase productivity,
Globalisation Challenges 3. Both scale economies and research and development have become more important instruments for competitiveness in the global economy.
which span a broad range of economic activities in a disparate set of industries across different countries. 4. This section briefly explains
what triggered the wave of globalisation reshaping the economy at the end of the 20th century. To understand globalisation's impact on SME innovativeness
One of the most important implications of globalisation is that the comparative advantage of OECD nations is shifting away from traditional factors of production, such as land, labour and capital, towards knowledge-based economic activities.
Globalisation 5. Perhaps the most radical change in the economic landscape of the end of the 20th century has been the shift in economic activity away from a local or national sphere toward a much more international or global.
The measures of transnational economic activity which prove there has been a strongly positive trend toward greater global activity include:
statistics on trade flows (exports and imports), foreign direct investment, international capital flows, and inter-country labour mobility.
The Economist recently proclaimed The Death of Distance on its front page. 2 While the telecommunications revolution has brought the cost of transmitting information across geographic space to virtually zero,
the microprocessor revolution has expanded vastly the ability of many to participate in global communications and to use transmitted information.
The Emergence of Knowledge as the Source of Comparative Advantage 7. Confronted with lower cost competition in foreign locations,
and (5) shift into knowledge-based economic activities. 8. While some firms fell victim to the first strategy, many of the firms from OECD countries that have restructured successfully resorted to alternatives 2,
Substituting capital and technology for labour, along with shifting production to lower-cost locations has resulted in waves of corporate downsizing throughout Europe and North america.
This alternative involves shifting economic activity out of traditional industries, where the high-cost countries of the OECD have lost their comparative advantage,
and into those knowledge-based industries where comparative advantage is compatible with both high wages and high levels of employment knowledge based economic activity.
Emerging comparative advantage that is 2 The Death of Distance, The Economist, 30,september 1995. 3 The Downsizing of America
The global demand for innovative products in knowledge-based industries is high and growing rapidly;
By contrast, the rest of the economy experienced fairly steady growth at around 3%over this period. 5 Innovative activity of in the United states has jumped
while demand for skilled workers has exploded. 6 11. Given the shift in comparative advantage towards more knowledge based economic activity,
many scholars have predicted the demise of SMES. But in fact, the share of economic activity accounted for by SMES has risen in most OECD countries.
While some SMES like their larger counterparts, have fallen victim to globalisation, still others have deployed strategies to maintain
or even enhance their competitiveness in a globalizing economy. This background paper discusses some of the strategies open to SMES as they try to become more productive and shift more knowledge-based activities.
and adapting existing products to the needs of customers. Small firms account for a disproportionate share of new product innovation given their low R&d expenditures (Acs and Audretsch
Investment in innovative activities seems to be on the rise in SMES. The National Science Foundation (1999) shows that total expenditures for industrial R&d by SMES has increased by almost three times between 1985 and 1995 in the United states,
whereas the R&d-sales ratios of the largest corporations fell from 3. 5%to 3. 1%.4 The Valley of Money's Delights, The Economist, 29,march 1997, special section, p. 1. 5
and introduce new products and services. Rothwell (1989) suggests that small firms can have an innovative advantage due to differences in management structures.
Innovative activity also flourishes in environments free of bureaucratic constraints (Link and Bozeman, 1991. A number of SMES have benefited in fact from the exodus of researchers thwarted by the managerial restraints of larger firms.
Smaller enterprises make their impressive contributions to innovation because of several advantages they possess compared to large-sized corporations.
nor can they accommodate small ventures easily into their organizational structures. Third, it is easier to sustain a fever pitch of excitement in small organization, WK1 8 where the links between challenges, staff,
most SMES operate in medium to low technology environments and innovate without using formal R&d inputs.
This is consistent with economic theories of innovation and technical change where inputs to the innovative process are understood to be heterogeneous
and not limited to formal R&d investments. 20. In a more systematic approach to understanding innovation in SMES
The CIS has shown that the pattern of innovation in SMES is mostly non-R&d investment based.
Only as firm size increases does the importance of R&d investment in innovation increase too.
1) capital equipment or input-embodied innovation, and (2) design innovation. In capital equipment based innovation firms acquire new process technologies or intermediate products
which opens large opportunities to improve products. Traditional accounts of R&d largely under-evaluate the subtleties of innovative design which require a deep understanding of product function in relation to customer requirements;
and research oriented consultancies which include engineering services, technology consultants, and (2) R&d boutiques. As shown in table 1,
ICT services, high tech8, R&d services. 50%are technical service companies (ICT, R&d) Both from manufacturing and services,
rarely from services industries AGE Younger companies than average (33%are less than 5 years against 24%for all participants in FP) 59%were created over 10 years ago 64%of were created more than 10 years
whose investments in and use of innovations cannot be uniformly characterised. SMES fall roughly into four subgroups.
government policy can do much more to help the majority of SMES manage the transition to a global, knowledge based economy.
(which may or may not involve own investments in R&d). -The information technology strategy, which makes innovative uses of information technology
or large enterprises in order to improve their ability to access and absorb innovations. -The cluster strategy, in which SMES locate in close proximity with competitors
-The foreign direct investment strategy, in which SMES exploit firm-specific ownership advantages abroad. 29.
capital and land because the value of knowledge is intrinsically uncertain and its potential value is asymmetric across economic agents. 9 Investing in new knowledge is a risky activity that most SMES cannot justify.
Other key factors generating new economic knowledge include a high degree of human capital, a skilled labour force,
the relationship between R&d investments and patenting is very strong. The most innovative countries, such as the United states, Japan and Germany, also tend to undertake high investments in R&d.
By contrast little patent activity is associated with developing countries which have very low R&d expenditures.
therefore able to appropriate some of the returns accruing to investments in new knowledge made externally.
Which metaphor is most apt depends on a given industry's underlying technological conditions, scale economies, and demand.
Where scale economies are important, the revolving door model is more common. While start-ups and new entrants may not be deterred by the presence of high scale economies,
a process of firm selection ensures that only those firms that grow will be able to survive beyond more than a few years. 36.
and depending upon the severity of the other selection mechanism-the extent of scale economies-may ultimately be forced to exit out of the industry.
and experimentation that otherwise would remain untapped in the economy. The Information technology Strategy 37. A second strategy SMES can use to improve their competitiveness in global markets involves the application
or the level of output required to reach scale economies. This notion has received considerable attention in the popular press.
Even the smallest of firms can engage in certain activities--from plant watering to specialised legal services--better than a giant corporation.
"10 10 Tom Peters,"New Products, New Markets, New Competition, New Thinking,"The Economist, 4 march, 1989, pp. 27-32.
where they build direct links between manufacturers and final customers. But to properly take advantage of such internet-based financial and accounting systems
In the physical world, scale economy and standardisation plays a major role. The digital world enables individual product customization The customers will directly interact only with the intermediary,
which provides the appearance of having a huge inventory of a wide range of products.
Some enterprises especially small and medium-sized firms, choose to pursue increasingly specialised markets or innovative niches,
you have to find customers for your speciality all over the world in order to recoup your R&d investment."
"11"The Little Guys Are Making It Big Overseas,"Business week, 27 february 1989, pp. 67-69.12 Ibid.
Foreign direct investment plays a central role in these companies. And their fiveyear revenue growth was 16.2,
They investment abroad in plant equipment, and technology, and they investment in people. Even when a high initial investment may not be justified in terms of short-term returns,
the small and medium-sized enterprises consider it important to undertake such global investments because of the demonstration effect--to show potential customers
and business partners that they are committed to the local economy. The Mittelstand companies also espouse a strategy
whereby they insist on the same high standards in the host market as they do in the home market,
particularly in servicing their production through the creation of strong and reliable service networks. It is through such an aggressive strategy of expansion of production in foreign markets that these German Mittelstand companies have been able to overcome the inherent size disadvantage.
Nevertheless, the small-and medium-sized enterprises of Germany have not been able to overcome the risks inherent in a high degree of specialisation,
that makes a strategy of foreign direct investment so central to the German Mittelstand. In order to understand the peculiarities of each host market,
in order to provide services, such as training, to customers. While such services could be contracted out, the asset specificity of the product, combined with its high technological sophistication,
virtually bundles the service component with the manufactured product. 46. In the experience of the German Mittelstand,
when the technology dominates the enterprise and scientists and engineers are the driving force in the enterprise,
customer satisfaction tends to suffer and demand shifts elsewhere. Conversely, when the marketing department is the driving force behind the enterprise,
technological sophistication is affected. While customers may be satisfied in a static sense, the enterprise is not engaging in dynamic product development,
which leaves it vulnerable to competition from more technologically advanced companies. Customers eventually reward technological leaders that can provide them with unanticipated product innovations and improvements.
In this sense, balancing conflicting customer demands is a delicate strategy that only a very flexible enterprise,
which has both technological competencies and sensitivity to consumer needs, can accomplish. Ideally in SMES scientists and engineers should have a deep understanding of what their customers actually need,
but this can only be nurtured through close and frequent contact with the customers. Such direct and repeated contact between customers and the engineering department is particularly important
so that the latter do not underestimate the problems of applying technology to commercial needs. Indeed, non-marketing employees in the German Mittelstand engage in direct contact with customers at twice the frequency as in the largest German corporations.
This is typical of the importance placed in German SMES on having customer interaction with engineering, manufacturing,
and financial employees in order to make sure innovative activities truly meet customer needs. WK1 15 The Network and Flexible Production Strategies 47.
A fourth strategy open to SMES who want to remain competitive in global markets is to actively participate in networks
and cooperate with other firms be they other SMES, large enterprises, or a combination of both.
Saxenian (1994) has argued that it is the culture of interdependence and exchange among individuals in Silicon valley that has contributed to its superior innovative performance,
especially when compared to Boston's Route 128 where firms and individuals are isolated more from one another.
and a myriad of specialised consulting, market research, public relations and venture capital firms provide technical, financial, and networking services
which the region's enterprises often cannot afford individually. These networks defy sectoral barriers: individuals move easily from semiconductor to disk drive firms or from computer to network makers.
They move from established firms to start-ups (or vice versa) and even to market research or consulting firms,
and new enterprises are conceived This decentralised and fluid environment also promotes the diffusion of intangible technological capabilities and understandings. 13 48.
These observations suggest that differences in the underlying structure between regions may account for differences in rates of growth and technological change.
and (2) the degree of monopoly versus local competition. 49. One model suggests that a concentration of firms within a particular industry in a geographic region facilitates knowledge spillovers across firms (the Marshall-Arrow-Romer model.
the costs of communication and transactions are minimised, and there is a higher probability that knowledge will spill across individuals in the population.
Jacobs thus develops a theory about how a greater variety of industries within a geographic region promotes knowledge externalities, ultimately innovative, activity and economic growth. 14 50.
There is also theoretic debate about the effect of competition on innovative activity. The Marshall-Arrow-Romer model predicts that local monopoly should be superior to local competition 13 Saxenian (1990,
pp. 97-98). 14 For an extension of this see Vernon (1994) and Vernon et al.
) WK1 16 because it maximises the ability of firms to appropriate economic value accruing from their investments in new knowledge,
In contrast, Jacobs (1969) and Porter (1990) argue that competition is more conducive to the generation of knowledge externalities than is local monopoly. 15 Not only does a large number of firms result in greater competition for new ideas,
specialised firms since complementary inputs and services are more likely to be available in a diversified competitive environment,
and local competition did positively influence industry growth rates in US cities from 1956-1987 (Glaeser et al.,
) Results of a study by Feldman and Audretsch (1999) indicate that a region characterised by a diversity of firms engaged in complementary economic activities,
In addition, the results of this study indicate that local competition for new ideas within a city is more conducive to innovative activity than is local monopoly.
The use of general purpose equipment enhances the flexibility of these firms to rapidly change product specifications in order to meet customer demands.
and high investments in human capital. -Continual innovation. Both the nature of the products, as well as production and organisation methods, are continually being improved.
Groups of enterprises working in the same product are seedbeds for the exchange of new ideas.
Formal and informal links between enterprises, including subcontracting relationships, facilitate economic specialisation of firms as well as superior access to information.
Knowledge created within an enterprise spills over for use by other enterprises. 53. There is considerable evidence supporting the hypothesis that flexible production systems actually outperform those based on mass production.
Through flexible production small firms have achieved a better economic performance than large enterprises. In these specialised industrial districts an agglomeration of producers within an industry work in close physical proximity.
The narrow division of labour common to large enterprises has been replaced by an organisational structure in which employees perform a wide variety of different tasks. 15 Porter (1990) provides examples of Italian ceramics and gold jewelry as industries in
The interaction between customers, manufacturers, and capital good suppliers in Italy has created an environment that pushes innovation forward.
Manufacturers make sophisticated and ever changing demands, which push suppliers to provide a continuous stream of incremental innovations.
The same is true of the close relations between manufacturers and customers the latter providing rapid feedback on technical solutions.
These links have been supported by national and local government policies as well as by a rich network of private economic associations and political organisations.
In a clustering strategy, firms take advantage of linkages with other enterprises afforded by geographic proximity
where the cost of communications has plummeted. But there is an important distinction to be made between knowledge and information.
While the marginal cost of transmitting information across geographic space has been reduced drastically with the telecommunications revolution, the marginal cost of transmitting knowledge,
and knowledge developed for a particular application can have economic value in very different applications. As Glaeser et al. observed, intellectual breakthroughs must cross hallways and streets more easily than oceans and continents..
An emerging economics literature demonstrates that knowledge spillovers are constrained indeed geographically. Data constraints can be overcome to study the extent of knowledge spillovers
Clusters of firms have experienced high levels of investment into process technologies, particularly in manufacturing automation, NC, CAD-CAM,
The Foreign Direct Investment Strategy 62. There is considerable evidence that the transnational economic activities of SMES have been increasing over time.
Not only has the absolute value of foreign direct investment activities by small and medium-sized enterprises increased over time,
but so has their share of the total foreign direct investment, at least in several countries including Italy, The netherlands and Japan. 63.
The effectiveness of a foreign direct investment strategy for enhancing SME competitiveness is shaped by three fundamental sets of factors.
The first is that the enterprise must have an endowment of capabilities in foreign markets that are superior to those of firms located in other countries.
Such firmspecific assets, which can be called ownership advantages, are principally are intangible assets like proprietary knowledge or a position of market leadership or human capital.
The second factor is that the benefits accruing to the SME for exploiting its firm-specific ownership advantages must exceed those it WK1 19 would gain
or access to vital information about potential inputs or market opportunities. These benefits from the extending the enterprise's activities abroad must exceed the benefits expected from externalising its property rights through other mechanisms such as licensing, management contracts, franchises, technical services agreements, turnkey projects, and subcontracts.
Finally, the third set of factors are those which make production abroad advantageous. There must be some factor inputs (including natural resources) found outside of the home country that provide an advantage to production abroad,
In particular, SMES are disadvantaged clearly by scale economies and other size related ownership-specific advantages.
being exposed to different consumer demands, networking with foreign collaborators, and above all accessing novel sources of knowledge,
clearly makes FDI an important element of the panoply of strategies open to SMES who want to remain innovative in a global economy.
Globalisation has shifted clearly the comparative advantage of OECD countries away from traditional inputs of production land, labour, capital and toward knowledge.
More specifically, regulatory policy, competition antitrust policy, and the public ownership of business are on the decline.
Examples of this new policy approach include measures to encourage R&d investment, venture capital creation, and the rapid establishment of start-up firms.
As for SME specific measures, a great emphasis is placed now on promoting investments in innovation.
so is by increasing the amount of capital available for access to or investment in innovation and new firm creation.
and taken together the public SME finance is about two-thirds as large as private venture capital.
Significantly, the SBIR and most public programmes fund early stage research, a stage which is ignored generally by private venture capital.
a shift in many recipient research careers from academia to entrepreneurship; and demonstration effects which encourage entrepreneurship.
A similar commitment to increased funding for SME research can be found across the OECD, at regional, national,
and SME policies in order to broaden the population of small and medium size enterprises who can benefit from innovation programmes.
Furthermore the technology developers that participate in the European commission Framework Programme tend to be subcontracting consulting organisations that perform development or engineering activities for larger enterprises.
The Needs of Technology Developers Looking Beyond Seed Capital 73. Several studies have shown that public funding in the form of R&d grants plays a decisive role as seed financing for high tech and potentially high growth SMES.
It is worth mentioning that R&d grants are considered often by these start-up ompanies as cheap sources of seed capital
and Muldur (1999) further explored the profile of these enterprises and found that 41%of these SMES were service organisations (engineering companies, consulting companies);
Participation of SMES in the Fourth Framework Programme (excluding CRAFT+Exploratory Awards) 33%41%26%hightech knowledge intensive services non-high tech manufacturers Source:
Governments should encourage such a trend by improving the conditions for private capital investments to support SME innovation. 77.
Public R&d grants were the only viable source of seed capital in Europe during most of the eighties and early nineties, a period during which high tech,
First, the amount of European seed capital from nongovernment sources has been rising constantly. Although these sources of seed capital are much more expensive than a public R&d grant
or loan (EVCA figures show that seed capital funds earned in 1998 about 36%on their invested capital per annum),
they are obtained easily and can be spent with great flexibility (within the limits of a business plan).
Furthermore, venture capitalists speak the language of the entrepreneur, in contrast with the bureaucrats disbursing public funds. 78.
1. Closer collaboration with the Venture capital industry. In those countries such as Belgium, France, and Germany where venture capital markets are booming,
there should be better collaboration between the R&d granting institutions and the private or semipublic VC industry.
, ANVAR in France and SENTER in The netherlands) are indeed cooperating with the local venture capital industry,
in order to develop a technology or prototype, and only later resort to private capital sources for business development needs.
An exchange of information between the two types of organisation (business plans vs. audit reports) is mutually beneficial.
Furthermore this WK1 24 collaboration simplifies the administrative burden of the technology developer by allowing for the exchange of audit reports, business plan evaluations, firm cross-references,
and experience. 2. Grants for business plan development and for nontechnical activities. Since R&d grants are project based
The latest generations of new technology based firms are need especially in of business support such as business plan development,
venture coaching--rather than simply public financing (Chiesa & Piccaluga, 2000). Public bodies might provide support for such nontechnical aspects of the innovation process,
as SENTER and Enterprise Ireland have begun to do. 3. Pure equity financing. Some countries go one step further in their strategy adjustment towards technology developers:
and take equity stakes in new companies,(Enterprise Ireland). Equity finance mechanism can complement classic public R&d grants and business development grants.
as well as government bodies, have difficulty assessing the risk-profit trade offs of innovative ventures. Uncertainties about the technical feasibility, the time period of development, the total financing needed,
and the probability of commercialisation and possible market size, make financial institutions hesitate before funding venture projects.
including to ensure the rapid diffusion of expertise in technological rating that would help reduce the uncertainty that limits private sector investments in high risk innovation projects (Box 1). They may also want to consider subsidising programmes that help
(°198421) IWT(°1991) SENTER(°1988) ANVAR(°1979) DTI Enterprise Ireland(°1998) Yearly Budget 3, 75 billion (5de FP:
R&d grants seem to have substantial additivity to the size of the R&d investments of leading technology users
look for new technical opportunities, and explore new production methods. Public financial support is WK1 27 necessary
since these firms do not have the cash flow or capital to initiate R&d activities,
and R&d support is that enterprises under-invest in R&d because they cannot fully capture the rents of their efforts.
and provide a greater financial incentive for private investments in R&d. The problem is that technology followers do not under-invest in R&d,
Examples include a producer of environment-friendly products who used ecommerce as a new way to promote his products;
Ernst and young describes the types of consultancy services innovation agencies can offer, using Business Links as an example (Figure 4). Figure 4:
Types of services, including consultancy that are offered by Business Links 19,4 6, 3 2, 5 7, 5 12,6 12,6 12,6 18,9 7, 5 1, 2
3 0 5 10 15 20 25 30 35 Other Training Business information Venture capital Finance & accounting Exports Sales & marketing General
Often, the innovation advisor is asked to evaluate the costs or demands of the service provider as a relatively neutral third party.
which one meets new SME-customers. -Organisation of workshops. Workshops about specific technologies or organisational changes are given regionally (see training in figure 4). Workshops are oriented to restricted target group of SME who are already regular customers.
-Distribution of business information. All sorts of information dissemination is possible through web sites, production of newsletters, even regional television. 94.
such as scanning or consulting services. -They need help recruiting university graduates and other skilled personnel.
Because of their very different needs, the public R&d granting institutions are positioned not well to provide these services.
or regional level and innovation services are most effective when decentralised and local. Second, these institutions are bureaucratic and technical,
services should be offered by organisations that combine business and technical WK1 30 skills. The current innovation policy landscape is fragmented too in most countries to offer such combined services public bodies either offer pure technical advice or just financial help.
Conclusions 96. In most countries, technology programmes are organised by technology domain or sector. They do not target different subpopulations of companies.
But the emergence of private capital sources reduced the necessity of public grants for this group.
if no seed capital is available, its development should be stimulated. 98. The second group, the leading technology users, has benefited the most from the recent SMEFRIENDLY programmes introduced by many OECD countries.
and engineering knowledge available (from public research institutes, customers, suppliers) and their own dayto-day business activities.
the regional innovation centres offer services of varying quality; governments are unsure how long or even whether they should be subsidised;
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