《技术创新管理》课程教学课件（英文）Innovative companies and national systems of innovation

Innovative companies andnationalsystems ofinnovationDr.MScBertSadowskiTechnischeUniversiteitTUeEindhovenUniversity of TechnologyWhere innovation starts

Innovative companies and national systems of innovation Dr. MSc Bert Sadowski

AgendaChallengestothe national performanceoninnovation: The concept of National systems ofinnovation (NSl)Historical developmentsonNSlInstitutionalcomplementaritiesTheChinese NationalSystemof InnovationTechnische UniversiteitTUEindhoveneUniversityofTechnologyEconomicsofInnovation2013

Agenda • Challenges to the national performance on innovation: The concept of National systems of innovation (NSI) • Historical developments on NSI • Institutional complementarities • The Chinese National System of Innovation Economics of Innovation 2013

Challenges to National Performance onInnovationChina becomes No 2world's R&D investor, Overtakes JapanEconomist2010:MALELNNewsin2006Multinationalsexpect~70% ofworld's growthoverthenextfewyearsto comeCHLNAfromemergingmarkets,with40%comingfromjusttwocountries,Chinaand India!EconomicsofInnovation2013

Economist 2010: Multinationals expect ~ 70% of world’s growth over the next few years to come from emerging markets, with 40% coming from just two countries, China and India! Challenges to National Performance on Innovation Economics of Innovation 2013

Challenges to national performance oninnovationCountryR&DexpenditurePercentageon globalR&Dthousand2000USSIncreasingUnited States36.69%26655154percentageEU251659554422.85%onGlobal1482964520.41%JapanR&D6.58%Germany477770630565954.21%FranceUnitedKingdom28023473.86%2.12%China1540417SmaltpercentageKorea,Rep.1.98%1439710onGlobalR&DCanada14331701.97%Italy12182051.68%Sweden1:42%10326207072200.97%TheNetherlandsSwitzerland6321050.87%Source:GlobalInnovationScoreboard,2o06TechnischeUniversiteitTUEindhoveneUniversityofTechnologyEconomicsofInnovation2013

Country R&D expenditure thousand 2000 US$ Percentage on global R&D United States 26655154 36.69% EU25 16595544 22.85% Japan 14829645 20.41% Germany 4777706 6.58% France 3056595 4.21% United Kingdom 2802347 3.86% China 1540417 2.12% Korea, Rep. 1439710 1.98% Canada 1433170 1.97% Italy 1218205 1.68% Sweden 1032620 1.42% The Netherlands 707220 0.97% Switzerland 632105 0.87% Source: Global Innovation Scoreboard, 2006 Challenges to national performance on innovation Small percentage on Global R&D Increasing percentage on Global R&D Economics of Innovation 2013

What are thekey characteristics of the Chinese national systemofinnovation ifitis not justaboutR&D?Technische UniversiteitTUJEindhovenUniversity of TechnologyEconomicsofInnovation2013

WHAT ARE THE CHARACTERISTICS OF THE CHINESE NATIONAL INNOVATION SYSTEM? What are the key characteristics of the Chinese national system of innovation if it is not just about R&D? Economics of Innovation 2013

NationalSystems of Innovation(NSl)Technische UniversiteitTUEindhoveneUniversity of TechnologyEconomicsofInnovation2013

National Systems of Innovation (NSI) Economics of Innovation 2013

Coreassumption inNSl:R&D isnotenoughThe production of knowledge not sufficient to induce innovation >Lisbon agenda about 3% of R&D onGDPprovides input tosystemBut:Key point is the circulation of resources betweenenterprises.PowerofNSl=capacitytodevelopefficientmechanismstopromote the circulation of resources and its ability to access anddiffuseavailableresourcesNSl not efficient if capacity to transfer resources produced fromproviderstoconsumersisweak!Technische UniversiteitTUEindhovenUniversity of TechnologyEconomicsofInnovation2013

Core assumption in NSI: R&D is not enough • The production of knowledge not sufficient to induce innovation > Lisbon agenda about 3% of R&D on GDP provides input to system • But: Key point is the circulation of resources between enterprises. • Power of NSI = capacity to develop efficient mechanisms to promote the circulation of resources and its ability to access and diffuse available resources. • NSI not efficient if capacity to transfer resources produced from providers to consumers is weak! Economics of Innovation 2013

Definitions and elements of NSlElementsofNSlDefinitions:Knowledgeproduction(R&D)C.Freeman(1987)“..thenetworkof>innovativefirms &institutions in the publicandprivatesectorswhoseactivitiesandinteractionseducational systeminitiate,import,modifyanddiffusenewKnowledge circulation>technologies."interactionbetweenplayersR.Nelson(1993)...asetofinstitutionsS-Institutions influencingwhoseinteractionsdeterminetheinnovationsinnovativeperformance...ofnational(see also Edquist (205) ppfirms."190/191)B.Lundvall (1992)“..theelements andDynamics of NSl:relationshipswhichinteractintheProcesses oflearningandproduction,diffusion and use of new,interactionandeconomicallyuseful,knowledgeandare either located within or rootedinside the borders of a nationstate.Technische UniversiteitTUEindhovenUniversity of TechnologyEconomicsof Innovation2013

Economics of Innovation 2013 Definitions and elements of NSI Definitions: • C. Freeman (1987) “. the network of institutions in the public and private sectors whose activities and interactions initiate, import, modify and diffuse new technologies.” • R. Nelson (1993) “. a set of institutions whose interactions determine the innovative performance . of national firms.” • B. Lundvall (1992) “ . the elements and relationships which interact in the production, diffusion and use of new, and economically useful, knowledge . and are either located within or rooted inside the borders of a nation state.” Elements of NSI: - Knowledge production (R&D) > innovative firms & educational system - Knowledge circulation > interaction between players - Institutions influencing innovations (see also Edquist (205) pp. 190/191) Dynamics of NSI: • Processes of learning and interaction

Institutional actors:Educational SystemsEducationInnovationa.EuropeanInstitutionsGovernmment owned R&DandPolicyb.NationalgovernmentalpolicylabsScienceand regulationBasec.Local policiesCompetitorsBoundariesNational systemofInnovation(NSi)KnowledgeInnovativeproductionSuppliUsersFirmsersKnowledgeOligopolistic Core FirmscirculationSchumpeterian firms.InstitutionsFinancialSystemsGlobalizationTradeflowsStockexchangebasedVSForeigndirectinvestmentbank-basedSystems.Mergers andacquisitionsTechnische UniversiteitTUEindhoven.University of TechnologyEconomicsofInnovation2013

Economics of Innovation 2013 Innovation Policy Globalization Innovative Firms. Suppli Users ers Financial Systems. Education and Science Base. Oligopolistic Core Firms. Schumpeterian firms. Institutional actors: a. European Institutions b. National governmental policy and regulation c. Local policies Educational Systems Governnment owned R&D labs Stock exchange based vs. bank-based Systems. Trade flows Foreign direct investment Mergers and acquisitions Competitors National system of Innovation (NSI): Knowledge production Knowledge circulation Institutions

Historical roots ofNSl:List's critigue on AdamSmithInterdependence of intangibleand tangible capital in Friedrich List's(1841) critique of Adam Smith:“lnoppositiontothisreasoning,AdamSmith,hasmerelytakentheword capital in thatsense in which it isnecessarilytakenbyrentiers ormerchants intheirbookkeeping andtheirbalancesheets...Hehasforgottenthathehimself includes theintellectualand bodily abilitiesoftheproducersunderthistermHe wrongly maintains that the revenues of the nation aredependentonlyonthesumofitsmaterialcapital."Technische UniversiteitTUEindhovenUniversity ofTechnologyEconomicsofInnovation2013

Historical roots of NSI: List’s critique on Adam Smith Interdependence of intangible and tangible capital in Friedrich List’s (1841) critique of Adam Smith: “In opposition to this reasoning, Adam Smith, has merely taken the word capital in that sense in which it is necessarily taken by rentiers or merchants in their book keeping and their balance sheets . He has forgotten that he himself includes the intellectual and bodily abilities of the producers under this term. He wrongly maintains that the revenues of the nation are dependent only on the sum of its material capital.” Economics of Innovation 2013