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Mario Pezzini
Trends seen with
traditional glasses
Growth in OECD regions dwarfed by
growth in (some) Asian regions
Shanghai aims to increase R&D intensity to 3.3%
by 2020…
The Nature of Innovation
Concentration of Innovation
Patent applications per million inhabitants (2005)
Research-intensive
innovation remains
highly concentrated
Etela-Suomi-FIN
330
381
Stockholm-SWE
Ostschweiz-CHE
537
Hovedstadsreg.-DNK
360
390
Baden-Wuertt.-DEU
Zuid-Nederland-NLD
527
Kanto-JPN
273
Massachusetts-USA
438
Vorarlberg-AUT
269
Trøndelag-NOR
214
Chungcheong Reg.-KOR
170
New South Wales-AUS
116
Ile De France-FRA
181
180
Eastern-GBR
Vlaams Gewest-BEL
105
101
British Columbia-CAN
Bord., Midl. and W.-IRL
69
Emilia-Romagna-ITA
91
Navarra-ESP
74
Central Hungary-HUN
42
30
Praha-CZE
Attiki-GRC
15
14
20
14
Lisboa-PRT
Bratislav Kraj-SVK
Istanbul-TUR
Mazowieckie-POL
4
6
Distrito Federal-MEX
0
Regional value
100
200
300
400
500
Country average
Regions with the highest number of patent applications per million population
compared to their country average, 2005
Source: OECD Regions at a Glance
2009
600
10.0
correlation coefficient = 0.93
California
8.0
PCT patents (log)
6.0
4.0
2.0
0.0
More than one third of
OECD regions have
-2.0
less than 10 patents
per million population.
-4.0
These regions tend to
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
12.0
invest less in R&D and
Expenditures performed by the business sector (log)
have lower shares of
employment in high
Correlation between R&D expenditures and patent applications, 2000-2005
technology sectors
Source: OECD Regions at a Glance 2009
The Nature of Innovation
Features related to Innovation
Patents
per
million
Average
expenditur
e on R&D
(% of GDP)
R&D shares by
sector:
Public-Private
(%)
Average
employment
in high
technology
sectors (%)
Regions that experience
higher levels of patenting
activity are doing so through:
0-10
0.57
60 - 40
23.3
10-50
1.57
50 - 50
28.5
50-250
1.63
40 - 60
37.5
250 +
2.41
25 - 75
43.2
• Greater R&D expenditure
• Greater involvement of the
private sector in innovation
projects
• Higher employment shares
in high-tech sectors
The Nature of Innovation
Collaboration for Innovation
Patents with co-inventors (2005)
Collaboration for innovation is
also concentrated in few
places.
Korea
Japan
United States
Netherlands
Germany
Italy
Hungary
Norway
Finland
Switzerland
United Kingdom
Australia
Austria
France
Poland
Sweden
Czech Republic
Belgium
Spain
Mexico
Portugal
Ireland
Canada
Slovak Republic
Turkey
Greece
0%
20%
In a region within the country
40%
60%
80%
100%
Foreign country
Patents with at least one co-inventor by
residence of the co-inventor, 2005
Source: OECD Regions at a Glance 2009
Correlation between business and non-business
patenting activities (pooled 2000-2004)
What are the results of the analysis on
innovation?
• If….
– Research-intensive innovation remains highly concentrated
– Some regions are catching up (Shanghai 2.3% R&D/GDP), but
many will not
….the future appear uncertain
However, regions vary greatly in how they innovate and indicators
capture only part of this.
There is a changing nature of innovation that reinforces the
opportunities for dynamics in all regions
The policy supply
Why adopting
a regional approach?
• The systems focus serves to identify different kinds of gaps
and “failures” for policy intervention
– Weaknesses in one part of system limit economic growth
– Market failure is not the only problem
• National policymakers are struggling with how to
incorporate the RIS concept into policy
–
–
–
–
What is the most efficient spatial allocation of resources?
How are different RIS served by a uniform policy?
How to exploit trans-border effects?
How to exploit trans-national externalities?
What are the main problems and
issues with the RIS approach?
• Many regional strategies are not adapted to their context
– Not all regions can be Silicon Valley (knowledge-generation leader)
– But capacity to absorb knowledge to innovate is needed everywhere
• Be careful in producing fashion trends
– RIS is frequently a recast science- and research-based approach
– Most innovation “principles” are not recognised in supply-driven
RIS plans
• Respective roles of national, regional and local level unclear
– Programme proliferation & duplication creates confusion & waste
– Administrative boundaries don’t usually map to an RIS
Regional Innovation Systems
Policy family Traditional
approach
New approach
Regional
Compensating temporarily
for location disadvantages
Building competitive regions by
bringing together actors and
targeting key local assets
Science and
Technology/
Innovation
Financing of individual,
single sector projects
in basic research
Financing of collaborative and
multi-sectoral research involving
industry and commercialisation
Higher Education Focus on teaching
role of HEI and on
basic research
Promoting closer links with
industry and joint research; more
specialisation among HEIs
Regional Innovation Systems
Policy
requirements
Traditional
approach
New approach
Unit of analysis
and intervention
•
Administrative units
•Individual firms and
national champions
•
Strategies
Sectoral approaches
“anonymous” framework
Integrated development projects
collaboration among identifiable
actors on common needs
(consensus building-the
exploded elix)
Policy tools
Subsidies to firms
national champions
Investments for the
local/regional environment
Governance
Central government
Multi-level governance
Functional areas
•Groups of firms, universities
and laboratories
Eppur si muove!
The New Regional Paradigm
Growth in Allocation of EU Funds and Regional Income
Allocation finds' growth rates (1987-2006) and per capita GDP at initial year (NUTS 2)
140%
• EU funds have
been allocated
following a
convergence logic
Average annual growth in funds' allocation (1994-2006)
120%
100%
80%
60%
40%
20%
0%
8
8.5
9
9.5
10
10.5
11
• However, for a
group of the
relatively richer
regions, funds seem
to grow as well.
-20%
-40%
1.
Initial per capita GDP levels (log values)
Growth period refers to: 1994-2006 for Belgium, Denmark, France, Germany, Greece, Ireland, Italy, Netherlands, Portugal, Spain and the UK; 1995-2006 for Austria, Finland and Sweden; and
2000-2006 for the Czech Republic, Hungary, Poland and the Slovak Republic.
2. Initial year for per capita GDP in the horizontal axis is determined according to the growth period.
Source : Own calculations based on DGRegio.
The New Regional Paradigm
EU Funds' Allocations by Broad Policy Objective* (2000-2006)
Infrastucture
22%
Labour Market
24%
Primary
Sector 2%
Tourism 5%
Business
Environement
14%
Rural 2%
• While infrastructure
is still an important
part of EU funds,
competitiveness
enhancing objectives
comprise now more
than half of all
allocations.
Social 9%
Education 7%
1.
2.
Innovation 13%
Business-environment objectives refers to: assisting large business organisations, assisting SMEs and the craft sector and productive environment.
Infrastructure refers to: basic infrastructure, energy infrastructure, environmental infrastructure, planning and rehabilitation, social infrastructure and public health,
telecom infrastructure and information society, and transport infrastructure.
3. Labour market refers to: human resources, labour market policy, and positive labour market actions for women.
4. Innovation refers to: research, technological development and innovation; technical assistance and innovation actions; and workforce flexibility, entrepreneurial
activity, innovation, information and communication technologies.
5. Social refers to social inclusion.
6. Rural refers to promoting the adaptation and the development of rural areas.
7. Tourism refers to tourism.
8. Primary sector refers to agriculture, fisheries and forestry.
9. Education refers to developing educational and vocational training.
Source : Own calculations based on DGRegio.
The New Regional Paradigm
EU Funds Allocated to Infrastructure Objectives (2000-2006)
Share of funds allocated to infrastructure and per capita GDP (NUTS 2)
Share of EU funds allocated to
infrastructure
100%
80%
60%
40%
20%
0%
8
-20%
1.
8.5
9
9.5
10
Initial per capita GDP (log values)
10.5
11
• Following a
convergence
logic, funds for
infrastructure are
allocated
according to the
degree of regional
development.
• This remains a
valid cohesion
objective, but can
be related also to
compensatory
regional policies
Infrastructure refers to: basic infrastructure, energy infrastructure, environmental infrastructure, planning and rehabilitation, social infrastructure and public health,
telecom infrastructure and information society, and transport infrastructure.
Source : Own calculations based on DGRegio.
The New Regional Paradigm
EU Funds Allocated to Innovation Objectives (2000-2006)
Share of funds allocated to innovation and per capita GDP (NUTS 2)
• In contrast,
Regions
regardless of their
income levels, are
supported with
funds to develop
innovation.
Share of EU funds allocated to innovation
45%
40%
35%
30%
25%
• This is in line with
the Lisbon
Strategy.
20%
15%
10%
5%
0%
8
8.5
9
9.5
10
10.5
11
Initial per capita GDP (log values)
1.
Innovation refers to: research, technological development and innovation; technical assistance and innovation actions; and workforce flexibility, entrepreneurial
activity, innovation, information and communication technologies.
Source : Own calculations based on DGRegio.
The New Regional Paradigm
EU Funds Allocated to Labour Market Objectives (2000-2006)
Share of funds allocated to labour market and per capita GDP (NUTS 2)
• The same applies
in allocation of
funds for labour
markets.
Share of EU funds allocated to labourmarket functioning
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
8
8.5
9
9.5
10
10.5
Initial per capita GDP (log values)
1. Labour market refers to: human resources, labour market policy, and positive labour market actions for women.
Source : Own calculations based on DGRegio.
11
Risks
Policy imitation
Mere redistribution on equal standards
Administrative rather than strategic management
Lack of expertise at national and regional level
Lack of a conceptual framework
Action
Identify comparative advantages
Reveal information
Group investments
Experiment