Innovation and Management Capability in Ireland: Implications for Policy Making, Business & Society

Transcription

1 Innovation and Management Capability in Ireland: Implications for Policy Making, Business & Society Irish Social Science Platform Summer School 22 nd June 2009 Dr. James Cunningham Director Centre for Innovation and Structural Change

2 Overview Structural Change and Some Perspectives on Innovation National Innovation Systems and the Irish Innovation Policy Context National Innovation System Performance Ireland Firm Level Innovation Activities Management Capability Implications for Policy Making, Business & Society

3 Structural Change and Some Perspectives on Innovation

4 The Death Watch Challenge What is our sustainable and distinctive competitive advantage - nationally, regionally, at firm and individual levels

5 Structural Change Significant changes in how organisations and management manage for exploration (RDI) and exploitation purposes Google, Facebook Rapid advances in science - convergent technology product, service and market opportunities Intel Structural changes in capital markets with growing influences of Asian central banks & oil producing countries Rapid global scaling of companies Bebo, Skype, Twitter, Collaborative exploration and exploitation of intellectual property- Blu-Ray, blade.org Source: Cunningham, J (2008) Management 2.0 in Irish Management 2.0, Blackhall, Dublin

6 Some Perspectives on Innovation Systematic Skill and Willingness Believe that innovation is inspiration and entrepreneurship is good luck.. innovation is a discipline,. And so is entrepreneurship. Neither of them requires geniuses. Neither of them will be done if we wait for inspirational and for the kiss of the muse. Both are work. Drucker (1994). Innovation and change in almost any arena requires the skill to develop power, and the willingness to employ it to get things accomplished. (Pfeffer 1983) Managers need to take an end-to-end view of their innovation efforts, pinpoint their particular weaknesses, and tailor innovation best practices as appropriate to address the deficiencies. Hansen and Birkinshaw (2007) Partnerships Mindset Individual & Collective Strategic Vision and Focus

7 Innovation Strategy Through the Lifecycle Experiential Innovation Marketing Innovation Business Model Innovation Process Innovation Product Innovation Structural Innovation Application Innovation Disruptive Innovation Main Street (Mature) Revenue Growth Early Market The Chasm Bowling Alley Tornado Technology Adoption Life Cycle Main Street (Early) Indefinitely Elastic Middle Period Main Street (Declining) Fault Line End Of Life Time Moore 2004

8 Core Elements of Innovation Business Strategy Core purpose, fit and long term direction Differentiation Sustainable and real across firm offer Competitiveness Bottom line impacts - economic and social Involves Change Collaboration with Multiple Actors Experimentation and Learning Experiential Understanding of Context

9 Being Innovative Not Always Enough!

10 Innovation Value Chain In reality, innovation challenges differs from firm to firms, and otherwise commonly followed advice can be wasteful, even harmful, if applied to the wrong situations There is no universal solution for organizations wanting to improve their ability to generate, develop, and disseminate new ideas. Every firm faces its own challenges in this regard. Source: Hansen and Birkenshaw (2007)

11 Innovation Value Chain: Rate Your Performance It breaks innovation down into three phases (idea generation, conversion, and diffusion) and six critical activities (internal, crossunit, and external sourcing; idea selection and development; and spread of the idea) performed across those phases. Source: Hansen and Birkenshaw (2007)

12 National Innovation Systems and the Irish Innovation Policy Context

13 National Innovation Systems National Innovation Systems: is that countries structurally differ in the way they conduct technical change, both at the level of their socio-economic institutions, such as industrial firms, and at the level of public policy for promoting innovation, which pertains to industrial and technological policy, universities, and public laboratories. Nosi and Bellon (1994) Emphasis on Research Commercialisation Co-opetition and Collaboration: (Lundvall, 2002:3) (Smith, 1991) Developments in ICT: death of distance (Mason, 2003) Innovation and Multiple Actors : (Etzkowitz and Leydesdorff 1999; Fassin, 2000; Graff et al., 2001; Kline and Rosenberg, 1986, 1994).

14 National Innovation Systems The functioning of any innovation system reflects the fact that innovative results represent a combination of private and public goods (Lundvall et al 2002).

15 An Evolving Policy Context Culliton Report Culliton Report (1992), a report to the Republic s Minister for Industry and Commerce by the Industrial Policy Review Group (chaired by Jim Culliton). Entitled A Time for Change: Industrial Policy for the 1990s, the report called for a broader approach to formulating policy for industry and made recommendations on a wide range of relevant public policy areas, including taxation, infrastructure, education, training, science, and technology. Recommended reducing reliance on industrial grants, a greater emphasis on fostering clusters of related industries, greater commitment to developing Irish indigenous industry, and reformed institutional structures for industrial policy.

16 Enterprise Strategy Group

17 Strategy for Science Technology and Innovation (SSTI) 2006 Ireland by 2013 will be internationally renowned for the excellence of its research, and will be to the forefront in generating and using new knowledge for economic and social progress, within an innovation driven culture. 8.2 Billion Investment ( )

18 National System of Innovation

19 Innovation Policy Statement 2008 Ireland s ambition is to become a leader in innovation. Our goal is to develop an innovation driven economy that maintains competitive advantage and increases productivity. Foreword, Mary Coughlan (2008) our ambition is to put innovation at the core of our policies and strategies for the future, so that Ireland becomes a leader in innovation.

20 Building Ireland s Smart Economy A Frameworks for Sustainable Economic Renewal The smart economy combines the successful elements of the enterprise economy and the innovation or ideas economy while promoting a high-quality environment, improving energy security and promoting social cohesion. (p.7) The Smart Economy has, at its core, an exemplary research, innovation and commercialisation ecosystem. The objective is to make Ireland an innovation and commercialisation hub in Europe a country that combines the features of an attractive home for innovative R&D intensive multinationals while also being a highly attractive incubation environment for the best entrepreneurs in Europe and beyond. (p.8)

21 Building Ireland s Smart Economy A Frameworks for Sustainable Economic Renewal Five Areas Meeting the Short-term Challenge Building the Ideas Economy Enhancing the Environment and Securing Energy Suppliers Investing in Critical Infrastructure Providing Efficient Public Services and Smart Regulation

22 Building Ireland s Smart Economy A Frameworks for Sustainable Economic Renewal Innovation? Implications for Policy Making???? Source: Building Ireland s Smart Economy A Frameworks for Sustainable Economic Renewal (2008), p.34

23 National Innovation System Performance Ireland

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25 Innovation Performance - Ireland Key Strengths Humans Resources Throughputs and economic effects Strong growth in S&E & SSH Doctorate graduates

26 The Policy Ambition

27 Innovation Performance & Creative Climate Source: Hollanders and Van Cruysen (2009) Design, Creativity and Innovation: A Scoreboard Approach Pro Innov Europe

28 Higher Educational Expenditure on Research and Development Higher education expenditure on R&D (, millions) HERD as a % of GNP (Ireland) 0.27 % 0.31% 0.40% 0.40% HERD as a % of GDP (EU-25 average) 0.37 % 0.40% 0.39% 0.40% Ireland s rank among 29 OECD countries 22nd 19th 16th 14th Total researchers in the HE sector (FTE) HE Researchers per 1,000 labour force (Ireland) Ireland s rank among 29 OECD countries 24th 23rd 14th 13th Source: Forfás (2008) The Higher Education R&D Survey 2006 Detailed Findings, p.6.

29 Entrepreneurial Activity

30 Entrepreneurial Activity

31 Output Intellectual Property Source: Forfás (2004) From Research to the Marketplace, p.11 Ireland s level of patenting activity in particularly low a fact that has been consistently highlighted Forfás (2004) From Research to the Marketplace UK Patent Office identified that 70% of businesses are at risk of losing IP because they mistakenly believe they own the work created for them by contractors.

32 Patent Filing and Ownership

33 Firm Level Innovation Activity

34 Firm Level Innovation Activity Key Highlights 52.5% of Irish firms were classified as innovative active Highest innovative industrial sectors Chemicals Medical and precision Rubber and plastic Food, beverages and tabacco Highest innovative services sector Computer related services Communications Eng & tech. services Source: Forfás (2006) Innovation Survey, p.5

35 Innovation Performance: Impacts and Barriers Impacts of Innovation Product innovation: 37.9% of firms across the economy Process Innovation : 47.2% across the economy Organisational Innovation : 42% across the economy Innovation Cooperation: 27% engaged in innovation collaboration 6.8% of all enterprises where collaborating with universities/third level institutes Increased Products Range Entered New Markets/Increased Share Improved Quality Barriers to Innovation Lack of Funds enterprise High costs Lack of qualified personnel Lack of information on markets Markets dominated by established firms Lack of finance outside Lack of information on technology Difficulty in finding cooperation Source: Forfás (2006) Innovation Survey, p.5.

36 Strengths and Weaknesses of Ireland s RTI Performance Strengths Weaknesses Government s commitment to driving Ireland as a Knowledge Based Economy and strong Government commitment to Research Historic absence of a fully developed national strategy for STI, and integration of sectoral and socio-economic research within that framework Success in attracting high quality, high technology FDI Research Capacity in Universities/IoTs and Industry (Numbers; quality supervision) in context closing output/quality gap with competitors Highly adaptive manufacturing base Lack of Research and Technology absorption capabilities by companies and weak commercialisation structures Importance of engineering and the quality of Irish engineers Number studying science subject to Leaving Certificate level Government support for enterprise Structural weaknesses in universities/institutions Positive fiscal environment Lack of funding for research support disciplines FP7: Ability to organise ourselves and influence the make-up of FP7 Low availability of Seed Capital Government responsiveness to changing competitive environment Emerging whole of government approach to STI. Strategy for Science Technology and Innovation ( ) Government Publications, Dublin, Ireland, pp Source:

37 Management Capability: A Threshold Capability for Economic and Social Activities

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40 Management Innovation From Doing to Enabling Source: Cunningham, J (2008) Management 2.0 in Irish Management 2.0, Blackhall, Dublin

41 Implications for Policy Making Business & Society

42 Policy Implications National Innovations System 2013 and Beyond An Innovation Leader or Still an Innovation Follower or an Innovation Trailer Duality of Attractiveness to FDIs and European Entrepreneurs Status Quo Strategy or a Distinctive Strategy Key Policy Issues Clarity about what is the national ambition around innovation Greater levels of actor collaboration on the island (private and state) Regulatory, tax incentives and supports that broaden and deepen innovative behaviours within and among firms Investment in management and innovation capability across the economy Broadening the innovation capacity within the economy private and public Radical reform of the education system National Innovations System An Innovation Follower Economic Activity State Support and Intervention

43 Business Implications Extending the Corporate Mandate MNC SMEs Researchers Sophistication of the IP Exploitation System Maturity of IP Portfolio & IP Rights Assignment IP Exploitation Mix: Licensing, Spin Outs etc Control of IP & IP Negotiations (Local or Central) Absorptive Capacity Expertise for IP Negotiations and Deployment Existing Innovation Capability and Capacity Internal Champion for Innovation Displacement Concerns Funding Cycles Traps Mobility Inbound and Outbound Commercial capabilities and IP awareness

44 Innovation in a Smart Economy Maximising Economic and Social Outcomes

45 Core Purpose of Innovation in a Smart Economy Sustainability of Competitiveness Creating Economic & Social Resilience and Capability

46 Policy Issues: Return on Investment? The real policy issues: Is the current Irish NIS competitive, robust, responsive and sufficiently sustainable to respond to the fundamental structural changes in organisational structures and collaborative innovation approaches at a firm level? How does it support and maximise social and public good activities?

47 Thank you