An innovation systems approach to socio-economic development and sustainability
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2 An innovation systems approach to socio-economic development and sustainability Pieter van Heyningen Founder SustNet, and Associate SGGF, School of Public Leadership, Stellenbosch University
3 Introduction to presentation 1. Introduction to the problem of unsustainable socio-economic development (Globally and in South Africa) 2. Introduce my PhD work, theoretical concepts and approach to the research I conducted [ ]. 3. Discuss the case studies, key learning and findings in context of South Africa s development needs 4. Provide a basis for discussion about opportunities in an innovation systems-based vs. spatial innovation approach to development An innovation systems approach to sustainability transitions J.P van Heyningen 3
4 Core Concepts Briefly Defined What is Innovation? An innovation is the implementation of a new or significantly improved product (good or service), or process, a new marketing method, or a new organizational method in business practices, workplace organization or external relations (OECD 2005). Something NEW that Works! An innovation systems approach to socioeconomic development and sustainability J.P van Heyningen
5 Core Concepts Briefly Defined Sustainability transitions are defined as the shift of socio-technical systems to more sustainable socio-technical systems. Innovation systems can be defined as the production and diffusion of knowledge in various institutional, political and organizational settings that lead to the development and diffusion of innovations in a specific region, nation state or internationally. Socio-cognitive institutions are the collective bodies of knowledge cultures, as established patterns of information flow and thinking, and the attitudes, norms and values inherent in society. [Societies thinking + knowledge base] An innovation systems approach to socio-economic development and sustainability J.P van Heyningen
6 Three Investigative Themes and Aims Investigative theme I and first aim: The first and broad aim of the study was to position Innovation Systems theory within the context of socio-economic and socio-technical transitions to sustainability. Investigative theme II and second aim: The second aim was to comprehend which factors within the framework of regional innovation systems (RIS) contribute to their sustainabilityorientation. Investigative theme III and third aim: was to try to unpack and link both scalar perspectives and socio-structural/ systemic perspectives within the framework of RIS dynamics. An innovation systems approach to socioeconomic development and sustainability J.P van Heyningen
7 Transition from Horse-Drawn Carriage to Automobiles ( ) An innovation systems approach to socioeconomic development and sustainability J.P van Heyningen
8 An innovation systems approach to socioeconomic development and sustainability J.P van Heyningen
9 Example of a fossil fuel Car Regime American Free ways An innovation systems approach to socioeconomic development and sustainability J.P van Heyningen
10 Sustainability Transitions require a Factor 10 Improvement From a broad perspective the problem is regarded as a socio-economic structural issue hence the need for socio-technical and socio-economic transitions to sustainability! Source: Geels 2010
11 Research Problem: Unsustainable structures Socio-economic pathways need to shift course, and there is little understanding of how Innovation systems may enable or hamper a shift towards a more sustainable direction. Structures in my research refers to the integration of social systems and economic systems. The general problem is that they are unsustainable, entrenched or locked-in (incremental innovation). Radical or System Innovation - Radical or drastic changes to products, services or systems that produce products. Innovation (systems) can change this WHAT/HOW?
12 National Innovation Systems are drivers of Innovation National Innovation Systems (Friedrich List 1841; Nelson 1987; Freeman 1987; Lundvall 1985) Aalborg School qualitative interactions for innovation are beyond conventional explanation of market forces. Lundvall, expressed the notions of interactive learning (search; exploration). Role of non-market institutions. Long-term interactive learning is more easily organised in a setting where there are few linguistic and cultural constraints for the transfer of tacit knowledge and where a multi-lateral system of trust relationships can most easily be organised (Lundvall et al. 2002:220). An innovation systems approach to sustainability transitions J.P van Heyningen 12
13 The Systemic Nature of Innovation
14 What are Regional Innovation Systems (RIS)? The region as unit of analysis/ sub-component of NIS? Provincial boundary, Metropolitan area, city-region, citydistrict, local municipal area Provides an analytical function and governance framework to understand the interactions between components, elements and mechanisms of agglomeration economies as a system. Intra- and Extra- territorial networks (Embeddeness)
15 Exploration of the literature on innovation, innovation systems Regional Innovation Systems (Cooke; Asheim, Doloreux, Parto) (Todling & Trippl 2005) 15
16 Elements of RIS Firms become learning organizations in RIS & are the innovating agents Institutions act as guideposts for social interactions (formal rules, laws / Informal culture, habits, norms, kinships) Knowledge & Innovation Infrastructure exchange Universities, R&D/Science Parks, Incubators, Tech Transferoffices, innovation hubs/districts, city spaces (Govt) Innovation Policy The region is regarded the most responsive level for innovation, to support firms
17 Internal Mechanisms of RIS Interactive Learning involves interactions between the elements or components of the RIS Localized learning = face to face interactions (Tacit knowledge & Learning) Sticky knowledge = not easily transferable (experience, learning by interacting, trust relationships etc.) Extra-regional learning = Based on codified or ubiquitous knowledge (not special to the region) Vertical learning (suppliers, user-producer, production systems) vs. Horizontal learning (clusters, knowledge bases, competition) Proximities different forms of proximity affect learning and thus innovation inputs! Functional (Accessibility) vs. Relational (Intangible connectedness ) Geographic / Organizational / Social / Institutional/ Cognitive Local Buzz Vs. Global Pipelines
18 Internal Mechanisms of RIS Embeddedness social and cultural relations that characterise the regional network, defining the regional network also extra-territorially (Intertwined proximities). Knowledge Production Knowledge combinations of know-what, know-why, know-who and know-how Search firm looking for new combinations (Internal R&D) Synthetic Knowledge Exploration More long-term University lead Joint R&D - Analytic knowledge Financing financing matters, in the ability of regions to innovate and is directly linked to their innovative capacity. (Administrative autonomy)
19 Importance of Spatial Agglomerations Technopoles locational interaction between industry and academia. Learning Regions - places that attract and retain knowledge, through specialized infrastructure and environments for learning, idea generation and commercialization. Innovation milieu - has been used to described such locations but with a greater focus on the cultural elements that foster innovative practices for local competitiveness. Industrial Districts - have been used to describe agglomeration of firms, in a particular spatial location. They are characterized by inter-firm learning, collaboration and trust. Clusters - multiple firms, co-located within a specific geographic region or proximity. Clusters usually refer to one industry or related industries, their institutional connectedness, and shared production systems and markets. Science and technology parks, and more recently innovation districts are important spatial components within regional innovation systems (Although more compact geographies).
20 Styria, Austria Case ( ) Interviews with CEO s in clean-tech sector, University v-rectors, and government Five Universities, four competence centres Several tours, conferences, events, awards and engagements in the region Highly (global) networked and functional RIS! Sustainability was/is a top priority in the region! An innovation systems approach to sustainability transitions J.P van Heyningen 20
21 Case Studies & Findings Austria Styria, Austria has a functional regional innovation system, strong science system and great emphasis was placed on sustainability. While it did not emphasize geographical co-location, it was highly networked and the ability to share knowledge and information between the elements in the RIS was evident. It was government s response and ability to support new research, new ideas and entrepreneurs that came from the general community, that lead to a transition of the socio-economic landscape there. An innovation systems approach to sustainability transitions J.P van Heyningen 21
22 History of Technopark Brief Background Prof. Christo Viljoen, dean of Engineering 1985 Background to the TPOA became the TechStel NPC Started as an attempt to look after the interests of Technopark Owners 2008 Research Interventions National & Local Government (COFISA) Stellenbosch University (PhD Research on Technopark/Stellenbosch as Innovation Hub)
23 VISION & FUTURE STRATEGY To enable and create a Sustainable, Vibrant and Active Innovation Community The Journey towards Transforming Technopark Towards an Innovation Hub began in It was clear that connections to the rest of the town was required, especially the University and Municipality The Dept. Science & Technology Funded project Stellenbosch Innovation District (SID) was born The park now has its own independent management structure (NPC)
24 Technopark as SMART innovation hub within Stellenbosch Innovation District
25 Stellenbosch Innovation District in W.C. RIS
26 Case Study Findings (Stellenbosch & W.C. RIS) Generally dysfunctional Regional Innovation System in the Western Cape i.t.o institutional connectedness. While there are siloed initiatives, there is a lack of any co-ordinated response to sustainability challenges at the regional level. University research and industry needs are misaligned. Past Apartheid infrastructure has lead to communities of disconnect. (Along socio-cultural lines) Considerable opportunities exists for innovation, through connecting institutions through spatial agglomerations (in South Africa)! An innovation systems approach to sustainability transitions J.P van Heyningen 26
27 SoIS, discussion, conclusion and recommendations MAIN RQ - How do SCIs within RISs constrain or enable pathways to socio-economic development for sustainability, in turn affecting socio-technical transitions to sustainability at different structural and scale levels? Answering the main research question: There was substantial evidence from both cases to support the notion that SCIs not only provide frameworks for decision-making within RIS, but also determine the directions of search and research. It was clear that stronger and more functional RIS have a greater ability to transition to sustainability than weaker ones. However, it is not the strength of ISs that determines their direction, but rather the SCIs inherent in them. 27
28 Sustainability-Oriented Innovation Systems! An innovation systems approach to sustainability transitions J.P van Heyningen 28
29 General Findings & Recommendations The need for sustainability-oriented innovation systems! (For inclusive economic growth). Agglomeration economies need to take into consideration socio-spatial divides of the past an approach to rebuild city core social fabric in South Africa. Science systems, and knowledge transfer needs to become more relevant to business, sustainability and social development issues. A greater understanding and emphasis needs to be placed on the socio-economic drivers of change (sustainability transitions). An innovation systems approach to sustainability transitions J.P van Heyningen 29
30 Difference in Cases Austria (Ecological Focus) An innovation systems approach to sustainability transitions J.P van Heyningen 30
31 RSA Both Ecological and Social Challenges An innovation systems approach to sustainability transitions J.P van Heyningen 31
32 In connecting the disconnected The Disconnect between formal & informal, between leading systems & lagging systems Cognitive Distance Institutional Distance Organizational Distance Social Distance 1. UNIVERSITY Is knowledge generation Appropriate? Spatial Distance 2. GOVERNMENT Are our policies appropriate? 3. BUSINESS How do we integrate horizontally & vertically
33 An inclusive innovation/ Entrepreneurial space
34 Philippi Village Innovation Hub
35 Inclusive Innovation System? Monitoring Economic/ Social development impact Co-defining problems through appropriate research Balancing University Push & Society Pull with appropriate policies Including in the innovation & commercialization process (shared value) Localized learning through F2F engagement
36 Levels of Innovation Systems, their Governance/Management Economy Wide (Policies, Taxes, Incentives, Push & Pull Forces) Economic Sectors/ Clusters Economic Sectors/ Clusters Economic Sectors/ Clusters Economic Sectors/ Clusters Entrepreneurial activity Entrepreneurial activity Geography and design of innovation & Innovation spaces is vital
37 Further Recommendations for Discussion How do we engineer our innovation systems to deal with challenges for sustainable development on the continent? Millennium Goals now replaced by SD Goals! BRIC Country Challenges What about Africa? Africa is far behind! What is the opportunity for South Africa? Geography of Innovation Conference 2014 Pieter van Heyningen 37
38 Sesspools to Sewer Systems
39 An innovation systems approach to sustainability transitions J.P van Heyningen 39
40 Famous last words We need spaces for experimentation testing new technologies, social arrangements. Innovation districts, science & technology hubs should form stronger links with the innovation system. Some municipalities should become testing-grounds, with a special fund, and relaxed legislation to support change. E.g. Stellenbosch. City centres, districts should be re-imagined as the spaces for learning, interacting and creating the unique local buzz that will drive our economy into a new direction. An innovation systems approach to sustainability transitions J.P van Heyningen 40
41 Thank You! Pieter van Heyningen Founder SustNet Associate SGGF, School of Public Leadership, Stellenbosch University, South Africa +27 (0) An innovation systems approach to sustainability transitions J.P van Heyningen 41
42 Additional Slides/ Examples hereafter An innovation systems approach to sustainability transitions J.P van Heyningen 42
43 Real-World Issues: (South) Africa Transitioning to Sustainable Development in Africa? Africa is predicted to grow very rapidly! (Deloitte 2012; McKinsey 2010) What kind of development? How? BUT Global Report by Ernst & Young, suggests Africa does not feature in cleantech. Are Africa developing capacity for solutions? Too little! What about implementation of sustainable solutions? Not really! Geography of Innovation Conference 2014 Pieter van Heyningen 43
44 Projected African Growth US$93-billion is needed annually over the next decade to overhaul sub-saharan African infrastructure. $60-billion of that is needed for entirely new infrastructure and $30-billion for the maintenance of existing infrastructure. Only about $25-billion annually is being spent Deloitte 2013 Mckinsey Global Institute suggests that of the top 10 fastest growing economies in the next 25 years 6 will be African. ARE OUR INNOVATION SYSTEMS GEARED TOWARDS THIS?
45 Some Statistics
46
47
48 What are the Transition Problematics in Context of S. Africa? 2 Main Capacity Problems: Provision of Alternatives (= Strength of Innovation Systems) Implementation of Alternatives (= Complexity and context of Transitions) Q1. What is the Capacity for Innovation for Transitions at the local level? (How does the local system of Innovation help us to understand and identify the problem of provision of alternatives ie. Eco-innovations/ appropriate technologies) Q2. What is the capacity and barriers to implementation of eco/alt. innovations at the local level? Geography of Innovation Conference 2014 Pieter van Heyningen 48
49 Appropriate rural electrification systems 49
50 Appropriate African urban systems 50
51 Appropriate water purification 51
52 Appropriate water supply 52
53 Urban-rural integration (Food Systems) 53
54 Energy (Biogas digester) 54
55 Secondary sewerage treatment: biolytic filter 55
56 ICT and social media as backbone 56
57 Sesspools to Sewer Systems
58 An innovation systems approach to sustainability transitions J.P van Heyningen 58
59 Thank You! Pieter van Heyningen Founder SustNet Associate SGGF, School of Public Leadership, Stellenbosch University, South Africa +27 (0) An innovation systems approach to sustainability transitions J.P van Heyningen 59
60 Research Questions (Primary + Sub) Primary research question How do SCIs within RISs [Regional innovation systems] constrain or enable pathways to socio-economic development for sustainability, in turn affecting socio-technical transitions to sustainability at different structural and scale levels? Sub-Research Question 1: Do strong and functional RISs have a greater capacity than weak ones to enable socio-economic transitions to sustainability? Sub-Research Question 2: How do SCIs within RISs enable the direction and qualities of innovation outputs in the regional/local economy? Sub-Research Question 3: How do socio-cognitive institutions develop and how are they shaped by various forms of proximities on different structural and scale levels An innovation systems approach to socio-economic development and sustainability J.P van Heyningen
61 Discussion, conclusion and recommendations Sub-P1a: Strong and functional RISs have a greater capacity to enable socio-economic transitions to sustainability. Sub-P1b: Weak RISs, have less capacity to produce and diffuse innovations, and hence enable socio-economic transitions to sustainbility. Discussion of findings of theme I ISs, their strength and functionality are a vital condition for STs Weak and dysfunctional ISs are a major constraint to achieving STs Weak ISs hamper the ability to transition to sustainability more rapidly Strong ISs are a necessary condition to achieving sustainability transitions An innovation systems approach to sustainability transitions J.P van Heyningen 61
62 PART IV SoIS, discussion, conclusion and recommendations Sub-P2a: Socio-cognitive institutions are a primary enabling factor for determining the direction of innovation in RISs. Sub-P2b: Socio-cognitive institutions are a primary constraining factor for determining the direction of innovation in RISs. Discussion of findings of theme II (Sub-P2a & 2b) Knowledge systems and production are the most important drivers of SCI orientations SCI shape their environments, and are shaped by their environments Formal vs. informal SCIs, structures and institutionalization processes SCIs for sustainability, are required for innovation systems to become sustainable! 62
63 SoIS, discussion, conclusion and recommendations Sub-P3a: Socio-cognitive institutions develop and are shaped in different ways by various forms of proximities on different structural and scale levels. Discussion of findings of theme III (Sub-P3) SCI proximities within an RIS All forms of proximities are vital in shaping new Socio-cognitive institutions. Hence a strong focus on spatial agglomerations and their design is extremely important in re-shaping South African identity, culture and socio-economic capabilities. The role of innovation districts is very important within innovation systems. There needs to be a stronger link between spatial agglomerations and the innovation systems itself. 63
64 Local Buzz Combination of RIS elements in a local setting (Local Interactions) creates local buzz coffee culture Sticky Knowledge is linked to proximity, and knowledge spill-overs Localized Learning relatively tight clusters within similar or related industries benefit significantly due to their geographical proximity (Malmberg & Maskell 1997) Absorptive Capacities the ability of local firms to absorb extra-regional or global information and knowledge, and with that opportunities to innovate.
65 Global Pipelines Extra-regional (Global) knowledge & opportunities Geographical proximity does not matter in this case - Codified & Ubiqutious knowledge flows Extra-regional networks (External Knowledge) important for stimulating new ideas, organizational learning and innovation. Absorptive capacity is about the ability to recognize and obtain ubiquitious knowledge that may be useful to local innovation. Absorptive capacity requires some cognitive proximity.
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