INNOVATION AND SOCIETY: BROADENING THE ANALYSIS OF THE TERRITORIAL EFFECTS OF INNOVATION*By Jean-Marc Fontan1 Juan-Luis Klein2 Diane-Gabrielle Tremblay3 Research Note no 2004-07a Canada Research Chair
Entrepreneurs take risks and new technologies appear, leading to the creation of new enterprises. On the contrary, during the maturity phase--for example,
and robust evidence can enhance the chances of policy success by eliminating the risks and costs of trial and error.
It included several action lines that can broadly be divided into four categories relevant for SMES'innovation capacities. 1. Those aimed at improving access to funding for SMES undertaking research (Research for SMES and Risk Sharing
The mechanism also aimed to promote investment in developing strategic areas such as quality, new technologies, environment, security and hygiene.
and a perception that innovation involved excessive economic risks. A 2009 Canadian survey37 found that 57%of world-first innovators judged a lack of skilled personnel to be an impediment for their activity.
and technological capabilities Challenge Innovative capabilities for SMES depend on both their ability to exploit external knowledge and on their in-house R&d efforts.
Indeed, the vast majority of SMES do not take the risk to carry out in-house research as the process of generating new technologies is becoming more and more complex.
IDEA as the manager of the initiative, the Capital Investment and Risk management company of Andalusia INVERCARIA,
The second sub-programme is related to risk finance (€2. 8 billion. It will consist in loans,
The mechanism also aimed to promote investment in developing strategic areas such as quality, new technologies, environment, security and hygiene.
and the relative risks for policy. It thus focuses on helping entrepreneurs identify their knowledge-based strengths at the regional level
Risks of policy induced specialisation While the central tenet of the concept of smart specialisation was accepted quickly by the EU policy community,
At the same time, the crisis has exposed also the vulnerability of global value chains to demand and supply shocks
or systemic failure but they also intervene with specific goals especially in markets for goods that are public or semipublic such as national security, health and the environment.
especially MNES, will exploit differently the same set of national or regional comparative advantages. Among the conditions that affect factor endowments, specialisation and comparative advantage are the following:
The quality of institutions such as government institutions (e g. rule of law, competition, security), social institutions (labour-employer relations) also affect factor endowments.
and limit the possibilities in some activities to exploit economies of scale, but it also does not match the regional distribution of innovation capabilities.
The aerospace sector experienced a sustainable growth over two decades stemming from a regional strategy based on risk sharing funding of original equipment manufacturer (OEM) programs and the commitment to a policy of fine
but also bottlenecks and threats to push these opportunities further. Source: OECD-TIP case-studies on smart specialisation The universities dealing with economics, public policy and administration,
In Australia, future bottlenecks/threats of the Australian grains industry are detected by direct consultations among grain growers,
This balance not only relates to risk; GRDC also strives to balance its research portfolio in terms of short, medium,
and iv) The Australian Government invests significant resources to increase food security in other countries as part of its aid budget.
In the years 2006 to 2011 the Australian Government's aid budget doubled. 27 There are a number of bottlenecks/threats that could affect the future of the Australian grains industry.
Inquiry report. 27 Global food security: Feeding another three billion. Critical for the world, critical for Australia (2011.
based on strong basic knowledge in green and red biotech Sustainability driver offers (long term) market perspective Threats Anchors Projects are focused strongly on solutions for key partners:
threat is that spill overs will be limited Rather narrow (public knowledge base in Flanders (e g. process technology) Connectivity Further development of international knowledge links Collectiveness as goal in the mission Connectivity Development of other regions in similar
Bottlenecks and threats for the ecosystem that may hamper the entrepreneurial process include the following:
and ii) The high risk of lock ins due to the inertia of the chemical sectors innovation system:
life tec, food, energy, smart mobility, logistics, and security. Brainport has a population of about 740,000 people, a Gross Regional Product of EUR 27 bn and a total R&d investment of EUR 2. 5 bn,
Nonetheless, there are bottlenecks and threats that can hamper entrepreneurial discovery in the ecosystem especially in an increasingly competitive global market.
compliance Geographical location (proximity to the EU markets and largest domestic markets) High Innovation Capacity Flexible production with competitive costs and risk sharing value chain Sophisticated
Increase in costs that are reflected not to retail prices Inadequacy of industrial design capabilities Threats Second hand vehicle imports from the EU Uncertainties in studies conducted in energy efficiency and environment legislation Enormous increases
Bottlenecks and threats Regional innovation and specialisation strategies need to be reviewed regularly to ensure they promote a clear vision across the region responding to changes in regional developments.
A lack of agreed goals and desired outcomes for the region represents a serious threat. One of the key strengths of organisations such as SEMIP is its ability to act independently of government
and alleviating concerns about the risk of interaction. OECD 2013 99 Buy in from industry: Research organisations and government bodies can struggle to connect
Bottlenecks and threats for the innovation ecosystem that hamper entrepreneurial discovery The advantage of Lower Austria in terms of RTDI is definitely the fact that it does not have to offer basic research and tertiary education only by itself
and any risk of trying to excel at everything. Impact of data and diagnostic tools: Lower Austria made positive learning experiences with the establishment of these tools among others,
Bottlenecks and threats for the innovation ecosystem that hamper entrepreneurial discovery Future threats for the innovation ecosystem in Upper Austria that may hamper entrepreneurial discovery are the lack of ongoing and systematic evaluations
The aim is to identify as many as possible narrow fields in which regional economy has significant position in the world market (e g. electron microscopes, cyber security SW.
and to achieve socioeconomic objectives in the areas that are important for every resident of Estonia, for instance in energy, national defence and security, health care and welfare services, INNOVATION-DRIVEN GROWTH IN REGIONS:
Bottlenecks and threats for the innovation ecosystem that hamper entrepreneurial discovery The development and performance of the Estonian innovation system has been remarkable over the past two decades.
Bottlenecks and threats for the innovation ecosystem that hamper entrepreneurial discovery Low R&d levels in all sectors remain a key bottleneck for the region.
In addition, few financing channels with risk-taking capabilities exist. The overall innovation service network and innovation infrastructure remain obscure.
Brandenburg Bottlenecks and threats for the innovation ecosystem that hamper entrepreneurial discovery The capital region hosts many internationally renowned universities as well as research institutes (such as Fraunhofer and Max Planck institutes.
Bottlenecks and threats for the innovation ecosystem that hamper entrepreneurial discovery Many specific recommendations have been formulated during the work on RIS 2013-2020.
Additionally, external threats detected in the Basque Country's innovation system with a significance for the future are likely to include:
i) Risk of loss of international market position of some Basque sectors; ii) Risk of non-differentiation in the new scientific and technological niches;
and iii) Risk that the continuity of the economic crisis may pose to the economic sustainability of the Basque Innovation System.
Lessons learned and conclusions for political action During the last decade the government of the Basque Country (Euskadi) has learned the importance of prioritisation and specialisation in sectoral innovation policies.
There is a widespread understanding amongst policy makers of the bottlenecks and risks of top-down government induced specialisation.
It is essential to operationalize the process of assessing cluster potential to reduce risks in policy implementation and in the practice of smart specialisation.
and effectiveness, there is an important risk of government failure: hence it is crucial that smart specialisation strategies develop into outcome-oriented policies and that, accordingly,
What upcoming threats and challenges do you see for the regional key economic sectors (and the regional economy as a whole) in the next decade?
and what co-funding/risk-sharing scheme will be in place on the regional level? Which department (s is/are in charge of innovation policies and budgets?
and threats for the development of a shared vision. INNOVATION-DRIVEN GROWTH IN REGIONS: THE ROLE OF SMART SPECIALISATION 200 OECD 2013 NOTES 38 Eurostat (2011),‘Patent Statistics at Eurostat:
A strategic planning method used for evaluating projects on the basis of their Strengths, Weaknesses, Opportunities and Threats.
In particular the chemical and steel industrial sectors in this region have been impacted seriously by restructuring and globalization threats (Chichoni, 2011.
The importance of entrepreneurial skills, such as innovation and risk taking should not be overlooked as essential ingredients to SME success. Skills development
especially in companies under threat since it may help to improve the company productivity. On the same note, Product/Service Innovation has been identified as another source of innovation.
their low risk and receptivity were the essential features facilitating them to be innovative therefore,
Heunks (1998) also found successful SMES associated with committed leaders with vision, enthusiasm, future-oriented exploit external opportunities for inward investment and information gathering.
and take risks. The finding on risk-taking was confirmed also by a study conducted among American SMES Blumentritt (2004
showing that the most innovative firms were competitively aggressive and willing to take on greater degrees of risk.
According to Massa and Testa (2004), benchmarking enabled a company to compare its practices and performances with others as well as to acquire external explicit and tacit knowledge,
Manage the risk. He highlighted that strategy should be varied sufficiently to allow for organizational agility and flexibility.
Attention is being given to making transport more accessible and safe by optimising access to and security of vehicles,
In recent years, incidents in cities in Europe and around the world have shown that urban transport users are more vulnerable to robbery, violence, and terrorist attack.
Furthermore, surveys indicate that low perceived security is a key barrier to public transport for many potential users.
Security of urban passenger transport is a key element of the EU Internal security Strategy and of the EU strategy in the fight against terrorism.
To ensure that increased security does not compromise ease of travel research initiatives have been set up to develop efficient and effective security concepts.
Security measures for different transport modes have been developed and tested in CIVITAS projects in cities throughout Europe.
These measures include installation of cameras in buses, trams, trains, stops and stations, and closer cooperation between transport operators and local security authorities.
Surveys of public transport users, for instance in Stuttgart (Germany) and Malmö (Sweden), have shown that these measures have raised passenger confidence in the security of public transport.
Research is supplemented by a coordinated approach in all Member States to harmonise controls and to close security gaps.
For this purpose the European commission has set up the Urban Transport Security Expert Working group with a mandate to facilitate cooperation and exchange of experience between national authorities and transport operators.
Security criteria and benchmarks are being developed to enable authorities and transport operators to assess security levels
and to apply the most efficient and effective measures. 1%1%6%14%11%38%28%1%car+taxi other pedestrian bicycle motorbike moped lorry, under 3. 5t
heavy goods vehicle Figure 2. Road fatalities in urban areas in the EU European commission (2012b) CARE-EU road accidents database, January 2012,
This situation leads to concerns about security of supply as well as to a significant deficit in the EU trade balance and increasing costs to the environment.
Based on open ICT software systems, prototypes and applications have been developed for activities such as truck access control, dynamic tunnel access control,
Communication from the, The EU Internal security Strategy in Action: Five steps towards a more secure Europe, COM (2010) 673 final, Brussels. European commission (2011a:
While many people fear the risk of illegal copies in this case as well, MIT Press has doubled apparently its sales of hard copies
Depending on their risk adversity, they will innovate and exploit networks information differently. 2. Industrial co-operation:
risk adversity may impede the innovation process. Following two types of behaviour are usually applicable to managers (OCDE, 1993.
and consider that innovation represents a large financial risk. So they only innovate under the pressure of their environment.
According to Cohen and Levinthal (1989), innovative capabilities depend on the ability to exploit external knowledge and on in-house R&d efforts.
According to this theoretical scheme, firms'ability to exploit external knowledge depends on their absorptive capacity. Consequently, we cannot consider that an analysis of the link between collaborative relationships
innovativeness, proactiveness and risk-taking create the factors closely tied to an entrepreneurial firm 5, 10,11.
and also their willingness to adjust their business as necessary in order to exploit them. The proactive nature of firms to utilize opportunities was measured by action
Additional support for the proposition that national culture influences the way firms'exploit entrepreneurial orientation has been noted by Knight (1997.
Through this methodology, 3m identifies both risks and opportunities for improvement at all stages in the innovation process.
The delay between a new technology and the development of social and ethical decisions about its use or application can increase market risk for the developers of the technology.
and Workshop with Assurance Team London Building a Better Future published July Assurance Team meeting on creating a robust dialogue process Zurich September Workshop on overall project
Intellectual Property rights Montreux July Assurance Team Meeting Geneva July 2001-February 2002 Electronic Stakeholder Dialogue:
Intellectual Property rights September Working group Meeting Kuala lumpur November Assurance Team Meeting Jongny sur Vevey Switzerland 2002 February Stakeholder Dialogue Meeting on Intellectual
Property rights London Working group and Assurance Team Meeting London March EIRMA Roundtable: Sustainable Development and the Innovation Process Paris April Working group Meeting Stockholm This report represents a continuation of work by the WBCSD in the areas of sustainability, innovation,
Gulf of mexico Palgunadi Setyawan, DML Indonesia Assurance team Roger Baud ETH Sheena Boughen, ECOS Corporation Wolfgang van den Daele, Berlin Science Center for Social Research (WZB) Anil K. Gupta, Honeybee Network/Indian
Risk-taking propensity is expected to be crucial as well as innovation by definition requires an investment with an uncertain outcome.
Risks in using a likert scale are a. The analysis concludes that innovation significantly depends on the position of firms in the value chain.
To overcome these risks, indicators were tested thoroughly on validity and reliability 5 Regression analysis: innovation level explains a growth in number of buyers (a=0. 001, r2=0. 106, ß=0. 428.
and reduces risks. The aggregate of all innovations leads to a highly resilient growth sector,
This is in part explained by market insecurity. As respondent#2 expresses: We are not really looking into the opportunity to modernize machines.
age, willingness to take risks, gender, no other position, worked in craft firm, primary school unfinished, primary school finished, secondary not complete, vocational.
Willingness to take risks is not a significant indicator, as all entrepreneurs are at least moderately willing to take risks.
Some very innovative firm consider themselves to be moderately risk taking, as they first study the market in order to reduce their risk.
Respondent#25, a micro-scale subcontractor, illustrates that willingness to take risk has enabled his firm to survive
when competitors went bankrupt: I have asked every shops to accept samples from me note: they only pay after selling.
wood is cracking, coloring is fading or cracking. Then they ask a company to offer a seminar.
especially exporters, respond to this risk by quickly designing new products causing a speeding up of innovation processes.
The highest risk is that they just sell the raw material. Therefore, this subcontractor always gets priority
7a Transform (scale 0-3) 2, 2a 2, 5a 2, 4a Exploit (scale 0-1) 0, 5a, 1b, 0b Absorptive capacity 3
Road safety and security...pp. 17 21 Action area 4: Integration of the vehicle into the transport infrastructure...
Data security and protection, and liability issues...pp. 26 27 Action area 6: European ITS cooperation and coordination...
Road safety and security ITS-based road safety and security applications have proved their effectiveness,
Meanwhile the security of transport systems must be taken into account without jeopardising efficient and effective transport operations. pages 26 27>Action area 5:
Data security and protection, and liability issues The handling of data notably personal and financial in ITS applications raises a number of issues as citizens'dataprotection rights are at stake.
collision warning and emergency braking systems as well as other applications including ecall (emergency call see page 18),
>introduce advanced emergency braking systems (AEBS) and lane departure warning systems (LDWS) in heavy-duty vehicles:
and safety-and security-related ITS systems, and further promote the more developed/advanced ones>TASKS
and safety-and security-related ITS systems, including their installation in new vehicles (via type approval) and,
possible countermeasures and safe human machine interfaces was planned also. Based on the outcome of this work,
I O N 3. 5 2 32 DIGITAL TACHOGRAPH ELECTRONIC TOLLING EMERGENCY CALL OPEN IN-VEHICLE PLATFORM NAVIGATION Call>AC T ION 4. 1>A c
the associated increase in vehicle/infrastructure electronics and communications raises security and privacy issues which,
There may also be security vulnerabilities in electronics and communications systems. ITS technologies must ensure the integrity,
addressing the specific data security and data protection issues related to ITS applications and services. Meanwhile, a number of EU-backed research projects have carried out work relevant to the topic,
Assess the security and personal data protection aspects related to the handling of data in ITS applications and services and propose measures in full compliance with EU legislation Data security
and data protection 2 37>AC T ION 5. 2>A c T I O N 5. 2 I N t E L L I G E
For advanced driver assistance systems, for instance, the liability risks may be highly complex the term‘defective product'is used in the EU product liability directive not only in a technical sense
from monitoring applications such as closed-circuit television (CCTV) security systems to more advanced applications integrating live data and feedback from a variety of information sources (e g. parking guidance, weather information).
road safety and security; integration of the vehicle into the transport infrastructure; data security and protection, and liability issues;
European ITS cooperation and coordination. The ITS Directive is a seven-year legal framework for a coordinated deployment of ITS,
in order to lower the risk of collision by continuously monitoring driver behaviour and driving conditions and,
Following analysis of warning strategies to determine an optimal balance between the level of support and the risks of distraction,
'National highways in most European countries are equipped already for some degree of dynamic traffic management and control, with surveillance cameras,
Special priority could be given to classes of vehicles involved in emergency or public transport services or even to goods vehicles, where appropriate.
/end 01/09/2006 30/06/2009 Website http://heavyroute. fehrl. org Damage limitation The high weight of long range trucks poses some threats to the surrounding environment,
which will inevitably include measures such as access control and road charging to manage the level of demand.
60 7 the implementation risks of the RDI strategy...62 bibliography, the most important definitions, abbreviations...
, opportunities and threats of the national innovation system can be summarized as follows (see Table 1). Strengths Weaknesses The market
and strategic alternatives 2 Opportunities Threats Based on the SWOT analysis-building on the strengths, using the opportunities,
taking care of/avoiding the threats-the strategic-level problems can be solved and strategic objectives and assignments can be set.
innovative attitude is weak (including the intellectual property and risk tolerance consciousness) The (public, governmental) institutional structure and regulatory environment supporting RDI is not efficient (including the system of funding programmes
and research areas within the national RDI system which go beyond the framework of innovation system building with regard to RDI risk-taking and proactivity.
and manage the system risks resulting from interdisciplinarity, including the modelling and elaboration of profitable commercialization.
FTEVAL (2003) the implementation risks of the RDI strategy 7 64 7 the implementation risks of the RDI strategy The implementation risks of the RDI strategy and their management Table 12
According to our current knowledge RISK SUGGESTED METHOD for risk management The public R&d funding is not enough to achieve the objectives set;
Strengths, Weaknesses, Opportunities, Threats SZTNH: Hungarian Intellectual Property Office Tét: Science and Technology STI: science-technology-and innovation 76 abbreviations 77 annexes Annex 1:
opportunities and threats of the knowledge flow processes are collected (see Figure 28). The summary of the detailed SWOT tables is included in the chapter on problem identification of the strategy.
of which 292 is for the purposes of the EIT 2. Food security, sustainable agriculture, marine and maritime research and bioeconomy 4, 694,
and security without damaging the ICT ecosystem. This report examines EU and U s. productivity trends
One of the areas currently most at risk is digital Trade policies that lead to smaller firm size in an economy hurt productivity and income growth.
because it is unlikely to deliver the expected benefits of privacy and security, and it also holds significant potential to slow down ICT-related growth. 182 Unfortunately,
The rule could be impossible to implement, according to the European Network and Information security Agency rendering the attempt not only damaging to commerce
Risk of errors and inefficiencies increases when organisations are forced to run paper and computer systems in parallel. 8,
and computer systems that introduce new patient risks, staff frustration, and outcomes below expectation. The focus must shift from automation of clinical work to innovation;
and this is seen by many as a threat to the established routines that enable organisations to function,
agriculture and food security; health and consumer protection; information society and digital agenda; safety and security including nuclear;
all supported through a crosscutting and multi-disciplinary approach. LF-NA-25964-EN-N
Report EUR 25961 EN 2013 Simon Forge, Colin Blackman, Itzhak Goldberg and Federico Biagi Comparing Innovation Performance in the EU and the USA:
with the additional major benefits of the avoidance of litigation threats. This indicates that orienting public procurement towards open source software
and their risks in the market are much higher generally, than established companies, support from the private
The USA therefore proved to be a more conducive environment to launch a business that depended on holding such information with less need to reassure customers over privacy and security.
initially this represents a threat to manufacturing based on older technologies since investments in plant (about $4 billion/€3 billion per factory) have to be written off.
EU accomplishments result from well organized, long-term robotics investment programmes (such as Robotdalen) which has emphasized the security that comes from its 10-year investment from VINNOVA as being a major part of its success,
very high risk with low chances of success, i e. unlikely to be funded by VC; may lead to little or nothing,
as they see innovation as high risk. Robotdalen in Sweden does this kind of new user SME support.
Threats of legal action over patents are mounting which act as deterrents to use certain technologies, innovate in them
given the conditions below. 32 Long-term government funding is major element of success. The security of continuous finance over a decade has ensured constant progress.
The cultural capital, of risk acceptance, becomes even more important at this stage, as the growth in human capital expands the workforce, perhaps many times, yet the level of risk due to the need for more funding capital,
and the uncertainty of market success, is perhaps greater than during the two earlier stages,
But their capability for taking risk is highly variable. Moreover, these organizations face political scrutiny, particularly in Europe and the USA.
It is only recently that they have entered finance for later stage funding of medium high risk.
A threat of legal action over infringement of existing patents that might possibly overlap, acts as a strong inhibition to fresh exploration of a technology.
Such threats are unlimited effectively when the patents that potentially overlap are held by the largest ICT players
and business models) and their permitted generality combined with ease of filing make the threat of overlap litigation more probable.
In the USA, litigation and the threat of litigation is a real problem: it is likely that fear and uncertainty‘in the shadow of litigation'leads to inefficiencies in how well the market for ideas and the market for entrepreneurs work.
The views of some, especially in the USA, are that these risks of inefficiencies due to the threats of litigation are balanced by the importance of recognisable incentives for innovators.
and less threatened by commercial risks of litigation in the EU than in the USA.
However, each has specific issues of financial and nonfinancial costs and benefits, suitability, levels of cooperation, problems, risks and feasibility (Rayna and Striukova, 2010.
Note that there is also a risk of the patent pool being declared illegal, if antitrust authorities determine that nonessential patents are in this pool
This can reduces costs and increase security, especially for software for common utilities and applications
health and demographic change, food security and the bio-economy with sustainable agriculture, the environment with clean energy and transport.
with its acceptance of risk in forming or joining a new start-up concern, as the normally accepted mental model for a successful career.
and qualified that risks are worth taking if eventually the result is ownership or part ownership in a successful venture.
Thus the culture in Europe is very much that risk taking is generally to be avoided. Risk and entrepreneurship Government policy could help in shaping the culture, specifically the attitudes to failure,
in terms of the laws around bankruptcy but also in terms of not denying support for a new venture when a previous one has failed.
and acceptance and tolerance of risks of innovation. Why are these three attitudes likely to be essential drivers of innovation?
Third, exchanging the safety of today's profits for the risk of innovative development of tomorrow with its unknown profit stream seems to be higher risk than staying still
Thus a company must instil a tolerance of risk (Fiegenbaum and Thomas, 1988; Kuczmarski, 1996.
But perhaps for the start-up, the most important, almost subconscious, cultural factor is the attitude to risk,
which, by its nature, is short term and with a preference for lower risk. This argument deserves some attention,
since it is generally true that the public sector has more ability to sustain higher risks and for a longer horizon,
because perceived risk was too high for VCS, according to Colin Angle (irobot, chairman and CEO).
The art of welcoming risk, Journal of Consumer Marketing, 13 (5), 7-11 Kulkki, S. 2012), Getting competitive, Pan European Networks:
It exploits its online offerings to complement the new lines in consumer electronics. More specifically, its itunes web service, for downloadable music tracks with a clever low pricing policy,
it is far ahead of competitors like Barnes & noble who rated their own sales channel of shops as dominant and Amazon of minimal threat a flea at the most.
First the entrepreneurial creativity and risk was provided by Scandinavians, Niklas Zennström and Janus Friis. The key technical personnel were software engineers from Estonia,
It was a risk-assessment exercise.""In all CDT raised over $250 m from various sources
market and profitability standards discouraged risk-taking and data driven research replaced intuitive visions as the main decision making tool.
We're a company that really loves the fact that a Roomba hacking community exists.
with its range of 4 and 6 axis robots from payloads of 3 kg to 1300 kg and 350 mm to 3700 mm reach,
a low-risk venture and a secure exist strategy. This does not match innovative robotics,
economic growth in the region is already being driven by a robotics industry supplying industrial and surveillance robots usable by small-and medium-sized businesses.
It also highlights the dependencies and the critical path for production and the potential operational risks.
agriculture and food security; health and consumer protection; information society and digital agenda; safety and security including nuclear;
all supported through a crosscutting and multi-disciplinary approach. LF-NA-25961-EN-N
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