In view of the ‘fragmentation’ hindering the proper functioning of the regional innovation system in metropolitan regions, what policy response is presented in the innovation literature as appropriate solution? Despite having well-equipped sub-systems that often perform well
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as individual elements, metropolitan regions do not manage to live up to their full innovation potential, because the interactions, networks, partnerships, exchange, and learning modalities between the elements are either missing, of low quality, or simply dysfunctional. Whereas the innovation system of old industrial regions could be portrayed as highly systemic (unfortunately, in declining industries and outdated technologies), the opposite could be argued to be the case for the innovation system of metropolitan regions: a lack of systemic interaction.
In order to encourage more systemic interaction within and between the region’s sub- systems, the innovation literature presents several policy solutions. For the knowledge application and exploitation sub-system, these range from attracting new innovative firms or leading global companies both with high ‘synergy potential’ for existing clusters; assisting business start-ups and spin-offs in knowledge intensive sectors and services; focussing on supporting radical innovations through partnerships between science-based industries (e.g. pharmaceuticals, chemicals) and universities and research institutes; putting in place schemes to foster inter-firm collaboration and innovation networks; etc.
Policy solutions presented in the innovation literature to overcome fragmentation in the knowledge generation and diffusion sub-system include actions such as strengthening the local knowledge base, such as through fostering specialisation of regional universities and polytechnics (in synergy with the region’s main industrial complexes); promoting exchanges of students and/or researchers between universities and local firms; encouraging university– industry partnerships as well as cooperative schemes between higher education institutes and SMEs; reorganising the support infrastructure by reducing the number of similar intermediary organisations (technology transfer agencies, business support services, etc.); and putting in place a revised, more specialised, more demand-led, higher-quality support system that can deliver on its promises, and so forth.
As ‘trust’ among innovation-relevant actors is often absent in metropolitan regions and feelings of ‘competition’ and ‘secrecy’ prevail (among firms, but also among public sector organisations), regional government can also invest in funding services from which many firms can benefit, including technical information services, market, and sector-relevant information, technological trends, metrology services, patent and license information, results of publicly funded R&D, statistical databases, R&D partner search databases, and technology demonstration. Table 2.3 summarises the idealised ‘matching’ policy responses to the region’s dominant innovation problématique for each of the three regional innovation system types.
Table 2.3: Idealised regional innovation policy responses by regional innovation system type
Types of regional innovation system
Peripheral regions (‘organisational thinness’)
Old industrial regions (‘lock-in’) Metropolitan regions (‘fragmentation’) Policy dimensions Strategic orientation of regional economy Strengthening/upgrading of regional economy Renewal of regional economy Improve position of regional economy in global knowledge economy
Innovation strategy ‘Catching-up learning’ (organisation, technology)
Innovation in new fields/trajectories
Science based and radical innovation, new ventures
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Improve strategic and innovation capabilities of SMEs
Product and process innovation for new markets
Enhance interaction between industry and knowledge providers
Firms and regional clusters
Strengthen potential clusters in the region
Support clusters in new/related industries or technologies
Support emerging clusters related to region’s knowledge base Link firms to clusters
outside the region
Restructuring of dominant industries Develop specialisation advantages to achieve synergies and international visibility Attract innovative companies
Diversification Attract cluster-related FDI
New firm formation New firm formation;
attract cluster-related FDI
Support start-ups and spin-offs in knowledge- based industries Knowledge providers Attract branches of national research organisations with relevance to the regional economy
Set up research organisations and universities in new relevant fields
Expand and set up high- quality universities and research organisations in relevant fields
Education/skills Build up medium-level skills (e.g. technical colleges, engineering schools, management schools)
Build up new skills required (technical colleges, universities)
Set up universities/ schools for highly specialised qualifications and skills required Mobility schemes (e.g.
‘innovation assistants’ for SMEs)
Attract new skills
Networks Link firms to knowledge providers and transfer agencies inside the region and beyond, demand-led approach
Stimulate networking with respect to new industries and technologies on regional, national, and international levels
Promote regional networks among firms, encourage local research- industry interfaces
Source: Tödtling & Trippl (2005); Martin & Trippl (2014).
2.6 Summary
According to the regional innovation systems literature presented in this chapter, regional innovation policy is considered ‘context-specific’ when the proposed course of government action serves to address the region’s dominant innovation problématique. The term regional innovation ‘problematique’ refers to particular system deficiencies linked to a particular regional innovation system type.
During the 1990s and 2000s, the Regional Innovation System (RIS) approach became popular among policymakers. Two European pilot programmes, RITTS and RTP/RIS, were among the first to apply this RIS concept as a diagnostic tool to help regional policymakers make better-informed policy decisions.
Schematically, a regional innovation system is made up of two sub-systems: (1) a knowledge application and exploitation sub-system, consisting of firms in their function as ‘knowledge users’, organisations that have a demand for knowledge; and (2) a knowledge generation and diffusion sub-system, consisting of ‘knowledge creators’, organisations that supply knowledge.
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In this study, regional innovation policy is seen ensuring an optimal functioning of the regional innovation system by removing so-called ‘systemic failures’ within and between these two sub-systems. Systemic failures can arise in the institutional composition of the system’s elements and in the quality of the linkages between those elements.
To ensure a useful framework for analysis of the case studies, this study distinguishes between three types of regional innovation systems according to their dominant innovation system deficiencies. In this ideal-typical representation of reality, peripheral regions are seen to suffer first and foremost from ‘organisational thinness’; old-industrial regions from ‘lock- in’; and metropolitan regions from ‘fragmentation’.
In order for public policy to be effective, it has to be context-specific by means of a policy mix of measures that tackle the bottlenecks of the regional innovation system in question. Literature on regional innovation systems assumes that ‘context-specific’ regional innovation policy follows from properly diagnosing the region’s innovation problématique. Based on this assumption, this chapter introduced an analytical heuristic framework that will be used in the six case studies to diagnose the region’s innovation problems and to assess whether the proposed policy responses follow logically from the diagnosis.
While this chapter looked at ‘context-specific’ regional innovation policy as a subject matter, the next chapter will look at regional government as the actor designing such a policy.
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