The idea that innovation processes take place within a ‘system of innovation’ resonated well with regional scholars. Beginning of the 1990s, the ‘regional system of innovation’ emerged as a new concept (Cooke, 1992; Cooke, 1998; Morgan & Nauwelaers, 1999). As had been the case for the ‘national systems of innovation’ concept (Soete et al., 2009), this concept also brought together different, yet complementary notions connecting technological change with regional development (Braczyk et al., 1998).
The first notion is linked to the scholarly interest in the relationship between proximity and innovation and the view on innovation as a ‘localized and a locally embedded, not placeless, process’ (Doloreux & Parto, 2004:4). Knowledge (unlike information) does not travel well, rendering learning processes among innovation-relevant actors territorially connected processes. Learning processes are socially embedded, and thus no ‘economic sphere’ can be strictly isolated from the ‘social sphere’ (Lundvall & Borras, 1999:53).
The second notion is linked to the fact that interregional differences in innovation performance are persistent and outdo national differences indicating the presence of powerful structural factors at play at the regional level (Keating, 1998). The case studies of successful regions that were conducted during the first half of the 1990s served as a point in case, bringing to the fore “the role of local specific capabilities in shaping the rate and direction of innovation processes” (Uyarra & Flanagan, 2009:2). Among the case studies were American regions such as Silicon Valley (Saxenian, 1996) and the Greater Boston Area (Feldman & Martin, 2004), as well as European regions such as Baden-Württemberg, Lombardia, Rhône-
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Alpes, and Catalonia researched in the EC-funded ‘Archipelago Europe: Islands of Innovation’ study by Ulrich Hilpert et al. (1992).
And thirdly, with increasing economic globalisation came a new appreciation of regions (as opposed to countries) as the appropriate level to shape a key source of competitiveness in a constantly globalising world, innovation. Those regions that could foster the ability to acquire, adapt, and advance knowledge were seen as “determin[ing] how well businesses innovate and, in turn, how well they compete locally and globally” (Holbrook & Salazar, 2003). Porter (1990) was among those influential authors who “assumed that globalisation, and international specialisation have their roots in the strengthening of specialised technological districts and regional networks” (Lundvall, 1992:3).
Since its launch, and seemingly overnight, the regional innovation system concept became very popular in policy circles, catering as it did to the needs of what policymakers, regional ones in particular, were looking for. The RTP/RIS and RITTS pilot programmes were among the first public policy programmes to take inspiration from the regional innovation systems concept, although it would go too far to claim that it was this concept that brought these programmes into existence (Rutten et al., 2003).
The regional innovation systems concept combines a number of qualities that explain its rapid policy uptake; the following three qualities are among them. Firstly, the RIS concept acknowledges the regional level as an important level of economic coordination (Asheim & Isaksen, 2003) “at which innovation is produced through regional networks of innovators, local clusters, and the cross-fertilizing effects of research institutions” (Lundvall & Borras, 1999:39). This new positioning of the region as a decisive actor in innovation governance was (and still is) music to the ears of regional policy-makers who often feel ‘sandwiched’ between national policies and local democracy. The regional innovation systems concept feeds the idea that regions are not merely administrative or geo-political areas, but ‘spatial mappings of socio-economic force fields’ (Corvers & Nijkamp, 2000) able to marry ‘knowledge capital, financial capital and social capital’ (Leadbeater, 2000:145) through purposive actions.
Secondly, the RIS concept attributes low innovation performance to factors whose remedy is within reach of regional policy-makers. In this evolutionary view, the problem with innovation is not necessarily sub-optimal investments in knowledge production (R&D), which is more the concern of national science and technology policies. What is needed to enhance the innovation capabilities of firms relates to the demand for knowledge, its application and exploitation in novel ways, the interaction between supply and demand, incorporating all sources of knowledge, and not just formal, scientific knowledge. The policy focus is on local firms and local institutions, and not exclusively on “firms at the forefront of technology, or (…) institutions doing the most advanced scientific research” (Nelson & Rosenberg, 1993).
Thirdly, as a concept, it provides an analytical tool to make the “specific systemic context in which (…) government intervenes” understood (Lundvall & Borras, 1999:17). It can serve as a diagnostic tool to detect bottlenecks which impede the operation of the innovation system as a whole. The concept appeals as a normative yardstick on the basis of which policy ‘prescriptions’ can be based; and vice versa, it offers the possibility ex-post to learn from ‘successful’ as well as ‘failed’ policy prescriptions. The concept also allows for comparisons with other systems of innovation and might help in understanding how these work the way they do.
38 2.3 The analytical dimensions of the Regional Innovation Systems (RIS) concept
One of the big controversies and academic debates has been the translation of the theoretical construct of RIS into an empirically observable phenomenon. In other words, do regional innovation systems exist in real life and if so, which regions can be characterised as a RIS? According to some scholars, only three regions are genuine ‘regional innovation systems’: Silicon Valley (U.S.), Emilia-Romagna (Italy), and Baden-Württemberg (Germany) (Cooke & Morgan, 1998; Cooke, 2001). Others have argued that all regions have a ‘regional innovation system’ as long as there is an economic ‘production structure’ embedded in a supportive ‘institutional structure’ in which firms and other organisations systematically engage in interactive learning (Asheim & Isaksen, 1997). This study adopts this second view, and the two key dimensions of innovation activity that are constitutive in a regional system of innovation are its ‘governance infrastructure and the business superstructure’ (Cooke, 1998:19).
If innovation processes do not take place in isolation, but within a ‘knowledge system’, can a national or regional system of innovation be created? Can it be the ‘object of administrative design’ (Hood, 1991)? Some authors, such as Carlsson, argue that an innovation system is the objective of technology policy to design/redesign: “the proper role for government policy is to help mould the system as a whole and its ‘connectivity’, not to rectify individual market failures or support individual projects” (Carlsson, 1995:15). Others such as Nelson and Rosenberg (1993) argue that a national or regional system of innovation is not purposively designed, but has been shaped by the country’s history of industrialisation, the nation’s laws, the existence of a common language and a shared culture, the national science, education and training system, the style of politics, the mix of public policies and programmes at the micro-, meso-, and macro-level, the competitiveness and export orientation of firms, and so forth. It is beyond the objectives of this study to argue whether a RIS can be created by purposive government action. In this study, the performance of a regional innovation system is seen to be determined by the capabilities that are developed through the interaction of the various institutional elements. As such, public policy organisations in general and regional government in particular are seen as important actors to diagnose and address bottlenecks in this interaction, and hence improve the functioning of the region’s innovation system.
The regional scale refers to a scale below the national country level scale. While regional innovation systems have been seen by some as a sub-set of a national system of innovation (Archibugi & Michie, 1997; Wiig, 1999), others have underlined that at the sub-national scale different regional scales can be distinguished at which regional innovation systems exist (Asheim & Isaksen, 1997; Cooke, 2001). As innovation systems are open systems, this study acknowledges that “a specific firm may be part of several innovation systems, be they sectoral, local or national, at the same time” (Isaksen, 2003:51). This study nevertheless focuses on the regional innovation system that is located within a national territory, but is sui generis and not a mini-version of the national innovation system.
Finally, it is useful to distinguish between national and regional innovation systems in three respects. Firstly, routines and practices and the shared beliefs and value system of the regional innovation system are importantly shaped by its respective national system of innovation in which firms face “country-specific institutional, infrastructural and cultural conditions regarding relationships among the science, education and business sectors, conflict resolutions, accounting practices, corporate governance structure, labour relations, etc.” (OECD 1999:21-22). At the same time, it is well documented that regions can differ culturally
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within their national setting due to factors such as history, location, and economic structure which are all part of the wider set of “territorially-embedded factors [that] influence the process of innovation” (Rodríguez-Pose & Crescenzi, 2006:4).
Secondly, what differentiates the national from the regional system of innovation concept is the emphasis on small or smaller firms. As Cooke and Morgan (1995) put it, “innovation is first and foremost a collective social endeavour, a collaborative process in which the firm, especially the small firm, depends on the expertise of a wider constituency than is often imagined (workforce, suppliers, customers, technical institutes, training bodies, etc.).” The organisational capacities of these networks of relationships become a crucial determinant of the performance of the regional innovation system (Nauwelaers & Reid, 1995).
Thirdly, the difficulty with both national and regional systems of innovation is capturing the systemic aspect of the ‘system of innovation’. Because this is what makes each system unique, this also makes it difficult to transfer good practices elsewhere.
Table 2.1: Definitions of ‘regional systems of innovation’ according to the literature “The constellation of institutions at the regional level contributing to the innovation process has come to be known as the regional innovation system” (Gertler et al., 2000:694, quoting Braczyk et al., 1998).
“A geographically defined, administratively supported arrangement of innovative networks and institutions that interact regularly and strongly to enhance the innovative outputs of firms in the region” (Cooke & Schienstock, 2000:273-274).
Two key dimensions of innovation activity are constitutive in a regional system of innovation: “the governance infrastructure and the business superstructure” (Cooke, 1998:19).
The ‘systemness’ of a regional innovation system can be assessed by analysing the extent in which there is “interactive governance, meaning good knowledge flows among intermediaries and with firms, and on the other hand, inter-firm interaction, networking, learning and so on” (Cooke, 2001:954).
“(…) this set of institutions, both public and private, produces pervasive and systemic effects that encourage firms within the region to adopt common norms, expectations, values, attitudes and practices – in short, a common culture of innovation (…). The list of institutions most frequently implicated in this type of analysis includes not only the usual R&D infrastructure (universities, technical colleges, public and private labs), but also industry- specific service centres for technology transfer and market analysis, local training councils, producers’ associations, chambers of commerce and suppliers’ clubs, all of which provide opportunities for social learning-through-interaction” (Gertler et al., 2000:694-695). “A set of interacting private and public interests, formal institutions, and other organizations that function according to organizational and institutional arrangements and relationships conducive to the generation, use, and dissemination of knowledge” (Doloreux & Parto, 2005:134–135 quoting Doloreux, 2003).
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“The regional innovation system can be thought of as the institutional infrastructure supporting innovation within the production structure of a region” (Asheim & Gertler, 2005:299).
“To construct regional advantage, the combined capacity for knowledge creation and exploitation in regional innovation systems is considered one of the most important resources for regional development. Hence, the importance of private-public complementarities in the knowledge economy is emphasized and the promotion of interactive learning between regional economic agents is seen as an essential task of regional innovation policy” (Coenen, 2007:803).
“Cooke (1992) is widely attributed as coining the term ‘regional innovation system’ in his Geoforum article which provides a typology of different types of RIS further developed by Cooke (1998). The subsequent development of the RIS literature (…) has highlighted the role of regional learning processes and institutions in an evolutionary framework” (Asheim et al., 2011:878).
Table 2.1 gives a non-exhaustive overview of definitions found in the academic literature. For the purpose of this study, a regional innovation system is defined as consisting of “elements and relationships which interact in the production, diffusion and use of new, and economically useful, knowledge” (Lundvall, 1992:2) where systemic failures can occur in the institutional composition of these elements and in the quality of the linkages between those elements. In this study, I follow Tödtling & Trippl’s (2005) modification of Autio’s (1998) schematic representation of a regional innovation system distinguishing between two sub-systems: (1) a knowledge application and exploitation sub-system, consisting of ‘knowledge users’ and (2) a knowledge generation and diffusion sub-system, consisting of ‘knowledge creators’ with policy addressing bottlenecks in both sub-systems. This schematic representation, shown in Figure 2.1, matches how the region within the RITTS programme is described in terms of a dichotomy between the demand for (‘knowledge users’) and the supply of knowledge (‘knowledge creators’) with policies aiming at bridging the gap between the two. The concept of ‘regional innovation system’ refers to a regional level of action and interaction. In this conceptual context, the definition of ‘region’ is ‘a bounded territory with particular attributes’ (Shearmur, 2011:1225).