• Strategy formulation and action plan implementation
o Launch actions coherent with Structural Funds and private sources of funds
o Identify means for continuing of mobilising of local and extra-regional actors & agencies
o Regional mechanism for co-ordinating and evaluation & monitoring innovation action
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The Systemness of the triple helix of university-industry-government relations
Given the reported problems in the governance and functioning of innovatin systems in general, the dynamics or extent of systemic-ness of the varieties of institutional arrangements and policy models within innovation systems need to be analysed. In order to so, Etzkowitz &
Leydesdorff’s (2000, pp. 111-113) ‘triple helix’ model of university-industry-government relations (cf. also Etzkowitz, Webster, Gebhardt, & Terra, 2000, pp. 314-315) can be a very useful tool.181 The model particularly focuses upon ‘the units of operation that interact when a system of innovation is formed’ and thereby aims to capture the complex ‘interacting subdynamics’ and ‘emerging overlay of communications, networks, and organizations’
(Etzkowitz & Leydesdorff, 2000, pp. 112-113).
Lundvall (1992a, p. 9) points out that ‘if innovation reflects learning and learning comes from routine activities, innovation must be rooted in prevailing economic structure’. Indeed, as shown above, it is the current normative policy interest to attain such a ‘triple helix’
configuration of university-industry-government (see Figure 13 below) that goes beyond the mere encompassing or linking of the three different institutional spheres or helixes (see Etzkowitz & Leydesdorff, 2000, p. 111; Etzkowitz et al., 2000, p. 315). Its great attraction is that it is supposed to feature dynamic intersections which generate ‘a knowledge infrastructure in terms of overlapping institutional spheres, with each taking the role of the other and with [tri-lateral networks and] hybrid organizations emerging at the interfaces’
(Etzkowitz & Leydesdorff, 2000, p. 111). 182 Often, these ‘[t]rilateral networks and hybrid
181 In this context, Etzkowitz & Leydesdorff (2000, pp. 109 and cf. 113) also state that ‘[t]he institutional layer can be considered as the retention mechanism of a developing system’.
182 Etzkowitz & Leydesdorff (2000, p. 112) indicate that currently ‘[t]he common objective is to realize an innovative environment consisting of university spin-off firms, tri-lateral initiatives for knowledge-based
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organizations are created for resolving social and economic crises’ and, therefore, they epitomize the social structure of ‘dynamics of change’ in innovation and production systems (Etzkowitz & Leydesdorff, 2000, p. 115). Their advantage is seen in ‘serving to institutionalise and reproduce interface as well as stimulate organizational creativity and regional cohesiveness’ (Etzkowitz et al., 2000, p. 315).
The creation of these hybrid institutions in clusters and milieus is regarded as a way to establish a ‘wide coalition amongst stakeholders’ by ‘building bridges between different elements of a societal space’, as Ache (2002, p. 18) indicates. He also concludes in this respect that the region is the main arena for this ‘social engineering’ of an ‘institutional fix’
(2002, p. 19). Raines (2002a, p. 24) agrees by stressing that ‘it is particularly regional institutions that are regarded as having a strong policy rationale’. According to Cooke &
Morgan (1998), ‘institutions can act as “animateurs” of local innovation systems, not only identifying the points in the regional economy where self-sustaining innovation can be activated, but also becoming major actors in promoting the creation of networks’ (Raines, 2002a, p. 24). Hence, proposed policy measures often include setting up ‘cluster fora’
(Raines, 2002b, p. 169) or ‘steering committees’ supported by strategic panels, working groups, seminars, and external experts (Landabaso, 2002, Annex III on p. 37). Yet, it is argued that this alone is not enough.
economic development, and strategic alliances among firms (large and small, operating in different areas, and with different levels of technology), government laboratories, and academic research groups.’ Regarding the
‘triple helix’ configuration of university-industry-government relations (Etzkowitz & Leydesdorff, 2000, see Fig.
3 on p. 111), this study obviously refers to the ‘Triple Helix III’ variant and not to the ‘etatistic’ model (‘I’) and neither to the ‘laissez-faire’ model (‘II’).
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Figure 11 The Triple Helix Model of University-Industry-Government Relations
Source: Etzkowitz & Leydesdorff (2000, Fig. 3 on p. 111)
This is different from the regional, and in particular, the national system of innovation approach and there is an important difference in the conceptualisation of the ‘triple helix’ by Etzkowitz & Leydesdorff as opposed to the regional, and national system of innovation approach (Lundvall, 1988, 1992b; Nelson, 1993), in that the university is attributed a much more important role in technology and knowledge transfer for industrial innovation ‘as a knowledge-producing and disseminating institutions’ in a knowledge-based economy (Etzkowitz & Leydesdorff, 2000, p. 109; Etzkowitz et al., 2000, pp. 314-315).
While the national innovation systems strand in general provides ‘little room for ‘intermediate institutions’ (Cooke & Morgan, 1998, p. 27), the regional innovation systems strand instead comprises the ‘full panoply of innovation organizations’ (ibid., p. 71) including universities.
State Industry
Academia
Tri-lateral networks and hybrid organizations
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Yet, it can be argued from the earlier discussion that the regional innovation systems strand is preoccupied with the two dimensions of industry (or business superstructure in Cooke’s rubric) and state (or governance). Hence it can be seen that the triple helix model places an additional spotlight on the university sphere.
While it is argued in this thesis that the plurality of these ‘trilateral networks and hybrid organizations’ is conducive to a given innovation system, a potential bottleneck of a policy approach in creating additional business support organisation is the potential existence of an already ‘complex organisational landscape’ (Harris, 2005, p. 9) or ‘institutionally congested’
governance structure as the new organisations (here referring to RDAs) are hardly entering a
‘regional institutional “desert”’ as Roberts (2000, p. 50 and cf. p. 39) remarks (cf. G. Bentley
& J. Gibney, 2000, p. 221). In this case, institutional innovations are likely to be needed in order to improve coordination and coherence and avoid fragmentation.
Competitive bidding as an effective tool of pooling resources of excellence
In recognition of the importance of ‘tri-lateral networks and hybrid organizations’, an advocacy of supporting measures fostering the university-industry-government interactions can be found in the literature. However, it is predominantly focussed upon the university-industry dimensions.
As an operational strategy of bringing together different partners from business and research sectors, competitive bidding for funding appears to be an effective tool for the pooling of resources of excellence as Burfitt, Gibney, & Schierenbeck (2002, pp. 32-33) conclude from
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their research into the German ‘centres of competence’ (‘Kompetenzzentren’) or ‘networks of competence’ (‘Kompetenznetze’183) support scheme (see Bührer et al., 2002;
Bundesministerium für Bildung und Forschung, 1999, 2000; Bundesministerium für Bildung und Forschung, 2002; Federal Ministry of Education and Research, 2003a, 2003b). There was a particular focus upon the ‘Competence Centre for Minimally Invasive Medicine and Technology’ in Tübingen-Tuttlingen (MITT) in Baden-Württemberg.
There are some obvious advantages that derive from using a competition not just as a selection and funding allocation method (e.g. see Wels, 2005) but also as a tool in bridging the ‘different worlds’ of academia and industry. First, competitive bidding generally intends to give the impetus and provide the rewards ‘to be more imaginative and efficient’ (Turok, 2004, p. 1072). Secondly, the monetary incentive of the funding prospect may overcome an existing scepticism or resistance of businesses towards collaborating with other businesses and university partners. It further may galvanise research actors that are perhaps normally less-driven by monetary objectives. Thirdly, in order to be successfully selected and to get most out of the potential collaboration, applicants themselves are expected to search by self-interest for matching partners with the utmost level of excellence. Fourthly, a competition procedure bears an attribute of a potentially objective process of allocating scarce funding resources and can thereby help to overcome an existing tradition of funding distribution that may have appeared to rather satisfy vested interest of locations and/or actors. Finally, competition winners can be branded and easily marketed, helping to create a sense of identity for new networks.
183 Please consult also the English-version of the online platform ‘Kompetenznetze.de’ for the networks of competence at http://www.kompetenznetze.de/index.php3?aufl=2&sprache=2
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Such an approach has, however, no universal application. Indeed, as Turok (2004, p. 1072) states there has so far only ‘been insufficient consideration of the circumstances in which competition is appropriate and where it is not’. As a first disadvantage of the competitive bidding, the application process and the involved formalities and bureaucracy can serve as an obstacle, failing to galvanise certain actors. Hence, it depends upon the initiative of movers &
shakers with a sense of driving an idea forward. Secondly, supported networks are furthermore likely to remain at least initially somewhat exclusionary clubs, which consequently produces rather economies of scales and collective goods internal to the network. Thirdly, the survival of the supported networks and hybrid organisations is likely to be a sensitive issue, with the risk of becoming ‘“babies” of the facilitating organisation’
(Lagendijk, 1999a, p. 24) that receive perpetual assistance. Finally, the involved ‘adaptive costs of collaboration and cooperation’, as reported by Polenske (2004, pp. 1031-1033), has to be considered. Indeed as Burfitt, Gibney & Schierenbeck (2002, p. 29) report from their fieldwork, engaging SMEs in firm-to-firm collaboration is a difficult process. SMEs often fear exploitation (i.e. lack of trust) and are wary of the opportunity costs by committing (their limited time and resources available) to engaging in short-lived networks.
Innovacracy
Besides the cluster policy approach and efforts to construct institutional thickness, it is argued here that the predominance of innovation in all policy aspects is an essential third pillar in building innovation systems. To describe this predominance, the term innovacracy is coined here to refer to the governance of innovation.184 However, innovacracy is only understood
184 Inasmuch, the term innovacracy links the term ‘innovation’ (deriving from the Latin word innovāre) with the combining form of ‘-cracy’ (deriving from the ‘Greek -kratia, from kratos power’), ‘indicating a type of government or rule’ – cf. Collins English Dictionary (1994, pp. 798 and 370 respectively).
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here as a paradigm in waiting, a proposal, since innovation has not yet become the predominant order towards which policy-making as a whole is geared to.
In line with Lagendijk’s recommendations such a paradigm would involve a holistic policy approach that includes the recognition that an overemphasis on technical innovation while neglecting other aspects such as organisational innovation for business modernisation, can be detrimental for the business support system.
In order to constitute successful economic development policy, the different policy fields such as education, research but also housing, environment, and so on all ought to be aligned with an underlying focus upon a common strategy for innovation and competitiveness. Assessing this alignment is however a difficult undertaking. In this respect it has to be acknowledged that the notion of innovacracy is a fuzzy description for a fuzzy concept. Whether indeed innovation policy as such, exists is therefore investigated by this thesis.
Furthermore, appropriate and successful innovation policy does not necessary equal successful economic development as such and vice versa (cf. Benneworth & Charles, 2001, p.
397). This is because other factors such as factor endowments or general regulatory conditions (at national level and that cannot be altered at regional level) have a more profound impact. As a result the thesis focuses attention upon the analysis of the systemic-ness of potential innovation systems, and in particular the inter-organisational dynamics.
159 Potential flaws in policy
There are, on the one hand, examples of practical attempts at economic restructuring, cluster exercises, innovation policies unsuccessful that go underreported. The rareness of successful clusters and working innovation systems on the other hand, illustrates that securing structural change is difficult and that policy, if at all, only plays a limited part in contributing to this process.185 The thesis turns to look at the issues relating to policy failures.
Lack of commitment
The potential list of pitfalls in policy-making starts with a look at the issue of commitment to the task. Commitment is needed. However, policy makers may lack a sense of realism in terms of the availability of budgetary resources and the time span needed to achieve structural change. While, for instance, policies for radical economic structural change envisage rather a time horizon of around 25 years or so, this conflicts with the agendas of politicians, who want quantifiable results to present to the electorate within the period of office. The will affect the degree of commitment to policy ideas, as they will support the quick fix policy approaches.
Everybody’s eggs in one basket: Biotech everybody?
From a strategic management perspective it is generally accepted that if many economic actors in the business world opt for an apparently successful strategy, the profits will most likely only be marginal.186 A similar doctrine applies to regional development policy (and
185 The litany of policy pitfalls is underreported mainly because the majority of academic contributions highlight and focus upon success models and cases and not so much upon the deprived and failed cases.
186 In this context, one could refer here to game theory or, better, to the cobweb theorem (cf. Pass et al., 1993, pp.
71-72; Pollert et al., 2004, pp. 90-91), which is often illustrated at the example of the so-called ‘pig cycle’. The
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thereby to the business environment, which regions have to offer). If most regions follow a similar regional innovation strategy, efforts to upgrade and establish centres of excellence in the same areas will counterbalance each other. This consequently implies the need for a more case-specific regional structural approach that would sit alongside a national structural approach or even a European approach.
This way of thinking however may lead to the support for more adventurous or risky approaches (as for example demanded by the European Commission for the implementation of Innovative Actions) that are different from the current fashionable policy approaches. A key example of this is the drive to establish a strong presence in the new and upcoming growth sector biotechnology and nanotechnology. In doing this, there is a risk that regions will not opt for an innovative, endogenous strategy but instead will fall into the trap of following strategies that try to create fashionable clusters. Also they will simply copy policies of prosperous and successful model regions and industries, whilst neglecting other approaches. In particular, they will make the mistake of not following its own path-dependency (Cooke, 1997, p. 362). Innovation policies which are set up fairly independently from the particular region’s composition of businesses, institutions and culture will be more likely to fail. Cooke (1997, p. 369) notes in this respect the difficulties, which peripheral regions from the Basque region of Spain to the Republic of Ireland have experienced (Cooke, 1996; Cooke & Morgan, 1993).187
theory explains the oscillations in the prices of agricultural markets with the time lags with which supply reacts to prices (due to the delay between planting and harvesting). For economic development policy, the key would not be prices but perhaps industrial sectors or future technologies. The time lag here can just be the same, or more likely worse. For example, structural change is often given a mid-term time tag and 25 years are a rather realistic time horizon for harvesting the economic benefits of policy-making.
187 The Basque case has shown that there is a need for prioritisation of sectors and technologies and for efficient monitoring and evaluation procedures for the industrial clusters policy. In addition, the specific political problems such as the threat of terrorism in combination with unfavourable economic features made it difficult for the regions to overcome its unattractiveness to foreign investors (Cooke & Morgan, 1993, pp. 179 and 181).
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Having all one’s eggs in one basket: the competency trap
Besides the potential pitfall of following fashionable but unsuitable strategies, there is also the danger of a region becoming locked-into the specialism of the locality and of the ‘strong ties’
(Grabher, 1993a). Capello (1996, see the 2nd explanation group in section 3.3) reports, in this respect, that the ‘cumulative concentration of material and immaterial resources in specific directions increases the risk connected to system irreversibility, yet in the presence of strong external turbulence and the need to change competitive strategies and conduct (Camagni, 1995).’
This institutional ‘lock-in’ means that while a region, for example, has become too specialised and good at doing something, at the same time it reduces its adaptive capacity to absorb new ideas. This is due to dominant organizations being opposed to change that may undermine their vested interests and positions (Boschma, 2004, p. 1004; Turok, 2004, p. 1076). In other more simple words: old habits die hard.
Missing policy diagnosis and evaluation
The importance of finding suitable strategies and focus areas or clusters becomes clear.
Therefore, a more advanced pre-assessment and benchmarking of a region’s strength independent from general fashion is needed to find a successful trajectory for the development of a region. As Lagendijk (1999a, p. 20) reports, it is often not found in practice. However, this demands undertaking benchmarking exercises and the implementation of ongoing
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performance indicators, which regions and its institutions are sometimes reluctant to introduce. This is often out of fear of being branded as an underperformer and the consequent public criticism following any publication of such results.188
Big boys not raising the flags – Lack of signalling from the top/Lack of high-level support
What is needed for a successful implementation of a holistic approach towards a regional innovation systems is not only the willingness and endorsement of the main actors (key players or ‘movers and shakers’) and bodies to collaborate but also the commitment of high-profile policy makers to signal the importance and acceptance of relevant policies. This could be compared to the necessity for commitment to the implementation of new business management approaches in companies, such as TQM.189 This need may often be neglected or perceived as being of inferior importance to success but some examples indicate that failure is more likely once top-level involvement and commitment has faded or was absent. It is strange that there has been insufficient attention in the past to the involvement or commitment of top-level policy makers and hence this thesis also looks into this aspect
The majority of research studies related to cluster theory focus on specific sectors only.
Although this is a useful approach to identifying the particular sector needs and the status quo, this kind of cluster thinking can tend to fall short in addressing a region’s underlying
188 An example for such reluctance might be the ending of North Rhine-Westphalia’s participation in the European Regional Competitiveness Benchmarking pilot project lead by EURADA.
189 In the Eighties, many companies tried to copy the success of Japanese business culture models that placed quality at the centre of all management aspects. Yet, so many large businesses were reported to have failed, for instance, the implementation of Total Quality Management (TQM) approaches and execute a organisational culture change because they only selectively tackled a few aspects and did not whole-heartedly showcase and set an example from the top to all employees of what the new approach entails. Especially the lack of this signalling from the top was reportedly on of the key factors often missing that is necessary to overcome encrusted routines, beliefs and structures and carry out an institutional change.
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problems and structure. It can neglect other clusters and linkages, e.g. same basic training needs and so on.
The theory-practice gap and the consequent absence of theoretical influence in policy development
In addition, policy failure occurs because many policy suggestions that feature in the literature are derived from the policy initiatives found in case-studies and thus do not reflect ‘pure’
academic thinking. Hence, theory may sometimes be rather led by policy rather than policy being theory-led (cf. also Lovering, 1999). This is an aspect that is worth further investigation. However, taking an opposite view, Landabaso (2002, p. 21) reports upon ‘an important “divide” between academic thinkers and regional planners’ in Europe, illustrated by the following quote:
This has had as a consequence a relative detachment of academic thinkers from
This has had as a consequence a relative detachment of academic thinkers from