DIME Conference on Knowledge-Based Entrepreneurship: Innovation, Networks, and Systems

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1 DIME Conference on Knowledge-Based Entrepreneurship: Innovation, Networks, and Systems Milan, Italy, June 4-5, 2007 The mismatch between high participation in EU funded technology collaboration networks and science-based innovation in the Greek ICT sector: In search of a mechanism that converts research outputs into viable products and services Yannis Caloghirou 1, Aimilia Protogerou and Evangelos Siokas Laboratory of industrial and Energy Economics National Technical University of Athens (LIEE/NTUA) st 1 Draft 1 Corresponding author: Prof. Yannis Caloghirou, Laboratory of Industrial and Energy Economics, School of Chemical Engineering, National Technical University of Athens, 9 Heroon Polytechniou, Zografou Campus, Athens, Greece 1

2 Abstract Networks different institutions that are linked for a time-limited, specific purpose are increasingly acknowledged as an important tool for knowledge creation and diffusion. They are particularly important to the European Research Area as a way to link geographically distant centres of excellence and to disseminate knowledge across Europe. This vision of a networked knowledge economy is central to the Lisbon objectives. The present paper attempts to examine knowledge networks that are established through the funding by the Information Society and Technology (IST) Priority of the th th th European Community s 4, 5 and 6 Framework Programmes. In particular, it focuses on the regional networks resulting from the participation of Greek organizations in the wider IST network. Although the network participation of Greek organizations can be assessed as considerably high, there seems that there is a lack of ability to successfully transform the innovative outputs of their collaborative R&D activity into viable product and services. This mismatch between network participation and science-based innovation identified in the Greek ICT sector can be attributed to several causes, such as the low national R&D endowments, the industrial structure and its inability to absorb this type of innovations, the type of entrepreneurial activity exercised in the Greek environment (shallow entrepreneurship, low rate of ventures undertaken by highly-educated entrepreneurs etc.). Social network analysis will provide some evidence on the role of Greek organizations -large firms, small and medium-sized entrepreneurial firms, universities and research institutions- in the creation and diffusion of knowledge within this network. In addition, using facts from case-studies conducted with network participating organizations we will try to identify the reasons of low entrepreneurial activity related to innovative project results. In doing so we will also attempt to explain why knowledge-based entrepreneurship can be a mechanism which may assist the conversion of research outputs into specific products and services. Furthermore, based on stylized facts we will try to shed some more light on the role of universities and venture capital in the enhancement of knowledge-based entrepreneurship with the Greek system of innovation. 2

3 1. Introduction The relationship between scientific research and its industrial exploitation is a matter of intense debate both within the scientific community and the policy-shaping and policy-making circles in Europe. This debate has largely emerged as an attempt to interpret and respond to Europe s increasing knowledge and innovation gap with the United States. In this context the notion of a European paradox has emerged, i.e. the idea that although EU countries play a leading role world-wide in terms of scientific research and output they are lagging behind in the ability to convert research results in marketable and economically viable applications (products and processes). Recently, the so-called European Paradox has been challenged by Dosi et al. (2006) who claim that this is a wrong diagnosis which leads to misguided policies. In short, they support the view that Europe s weaknesses reside both in its system of scientific research and in a relatively weak industry. Furthermore, they argue that Framework Programmes have led to a networking frenzy and to a state of affairs which is detrimental to research, wasteful for society and bad for business and they propose strong EU support for basic research coupled with the use and re-discovery of industrial policies to foster European strength in the most promising technological areas. Other researchers challenge the Research Paradox on the grounds that a new paradigm cannot be understood with old concepts, measurements and indicators (Chatziparadeisis, 2006). Nevertheless, beyond different types of measurements, interpretations and policy suggestions, European collaboration in Research and Technology Development is a reality that should be further explored and well studied. In this respect, the nature and the impact of policy-driven Research and Innovation Networks are thoroughly examined within the DIME Network of Excellence. In that context, this paper aims at the exploratory study of the impact of the research collaboration networks formed under the 4 th, 5 th and 6 th EU Framework Programmes during the period in the area of Information Society Technologies (IST) focusing on the Greek presence and its influence on industrial innovation. 3

4 2. Greek participation in ICT FP-driven networks 2.1. EU-funded research joint ventures and networks Most innovations involve a multitude of organizations. This is especially the case for the most knowledge-intensive and complex technologies such as Information and Communication Technologies. The growth in the number of collaborative innovation agreements, such as strategic technology alliances or research joint ventures has led to the emergence of complex technology networks (Borgatti and Foster, 2003; Duysters and Verspagen, 2004). The growing significance of these networks introduced a shift in the literature away from the dyadic relations between firms focusing on inter-organizational network structures which affect learning and innovation (Kogut, 2000; Powell et al., 1996). When analysis is focused on a set or a group of alliances the entire set of collaborative activities becomes the network. This implies that both direct and indirect linkages are being studied. Indirect links result when partners have access not only to an immediate partner but also to those partners with whom their immediate partners collaborate. Research partnerships can be defined as innovation-based relationships that involve, at least to a certain extent, a major effort in research and development (Hagerdoorn et al., 2000). A special case of R&D partnerships are subsidized Research Join Ventures (RJVs) that have been established through project-based ventures in the European Research Area. These research partnerships are contractual agreements among independent entities such as firms, universities, research institutes and other organizations generally aimed at undertaking joint work towards specific goals in a pre-defined area. The work undertaken in the context of an RJV is usually of precompetitive nature, which practically means that the fact that two ore more organizations are sharing and developing new technological knowledge does not necessarily lead to joint product development. The networks formed in the context of Framework Programmes are the result of selforganized partnering by participating entities under the thematic priorities and funding rules imposed by EU. They can be characterized as exploration networks since they are mainly focused on pre-competitive research. In this way, they provide information on a different stage of the innovation process compared to networks formed by 4

5 alliance data, patents, patent citations or scientific publications and thus may offer useful complementary evidence. Moreover, they involve a wider set of actors, i.e. Universities, research centers and government agencies, compared to other R&D collaboration forms. In sum, we could argue that RJV networks can provide valuable information on the organizational fabric and social infrastructure of European science and technology Background of IST-RTD Programmes Research in information and communication technologies within Framework Programmes was initiated with ESPRIT in FP1. In FP2, RACE (on communications technologies) and three individual Telematics research programmes were added. The latter three merged under FP3, whilst RACE and ESPRIT continued to exist as separate programmes. In FP4, ESPRIT and Telematics were carried on, while a new programme on Advanced Communications Technologies and Services (ACTS) was included in the framework. The ACTS, Telematics and ESPRIT IV Programmes in the FP4 had a common strong user orientation as well as a focus on the development of applications with a view of implementation and commercial exploitation in a short period after the termination of the funded projects. These three research activities were brought together and extended under FP5 ( ) into the Information Society Technologies (IST) programme, to provide a single and integrated programme that reflected the convergence of information processing, communications and media. The IST programme in FP5 had a stronger focus on long and medium-term research and a clearer engagement for precompetitive technology development. Thus, a major difference between FP4 and FP5 were the lower expectation for commercial deployment soon after the end of projects. Furthermore a significant difference between FP5 and previous programmes was the enhancement of a closer articulation between research and policy needed for a coherent and inclusive information society. However other fundamental objectives, such as to promote the development of European solutions and technologies, to enhance European competitiveness and economic development, to encourage the cooperation of companies, universities and research laboratories from different 5

6 European countries in pursuit of common technological goals remained more or less the same between the two FPs. By bringing together researchers form all over Europe and by making it possible to pull together diverse and complementary technical resources and capabilities of different actors, the FPs have contributed significantly to the development of a large number of networks even extending formal collaboration. Therefore, EU cooperative research projects have a decisive impact on the strengthening of the knowledge base, skills and networking links of the RJVs participants. In the 6 th Framework Programme, which was approved in 2002 and was run from 2003 to 2006, Information Society Technologies was one the seven priority themes within the specific programme for Integrating and strengthening research and technology developments in the European Research Area. The political climate which influenced the objectives of the IST priority in FP6 was quite different from FP5, since at that time the foundations for the European Research Area had been laid and the Lisbon and Barcelona Councils had set out a basis for making Europe the world's most competitive and dynamic economy. The IST Thematic Priority objectives exhibited a clear shift toward longer-term technology development and a major change in the instruments for its implementation. More specifically, two new funding mechanisms, Integrated Projects (IP) and Networks of Excellence (NoE) were introduced in FP6 alongside with the traditional instruments. Both of them were aimed at structuring and integrating European research better than the earlier mechanisms. This was mainly to result from a radical increase in the scale and size of the research projects, and in terms of consortium size The participation intensity and central role of Greek organizations in EU-funded ICT research networks In the present study the assessment of the Greek presence in the EU- funded RJVs in the Information Communication Technologies area is based on a dataset drawn from the most recent version of the STEP to RJVs database which is developed and maintained by LIEE/NTUA. This is an extensive database presently including detailed information on all collaborative cross-national research projects funded by the European Commission from FP1 to FP6. The primary information source for the 6

7 database construction is CORDIS (CORDIS search 2007), the official information service of the European Commission. The main difficulty encountered during the database construction was the inconsistency of raw data retrieved from CORDIS. Apart from correcting incoherent spelling in organizations names, particular attention was given to cleaning in detail the poor quality data on organization types. Furthermore, wherever possible, missing information regarding the geographical/regional location of organizations was added in the dataset. In particular the present paper s dataset comprises RJVs belonging to the 4 th, 5 th and 6 th Framework Programmes ( ) in the ICT area. More specifically the RJVs under study belong to ESPRIT 4, TELEMATICS 2C and ACTS Programmes of the 4 th FP and the IST thematic priority of the 5 th and 6 th FPs and involve at least one firm participant in the project consortium. The database contains information on all IST projects pertaining to the 4 th and 5 th FPs, while the available information for FP6 includes all projects with starting date in December Table 1 summarizes the overall participation by organizations based in different countries indicating also RJV coordinators. While entities originating from a wide variety of countries have participated in the examined network, it is entities from EU member states that have dominated participation. Germany ranked first both in terms of participation intensity and total number of participating entities. At the second place, organizations from the UK are somewhat more than those of France, whereas French organizations slightly outnumber those of UK in terms of participation. The increased participation intensity of these three countries can be explained taking into consideration their size and population as well as their R&D intensity and innovative performance (for example see TrendChart for Innovation). Most interestingly, Greece, despite its small size and lagging innovative performance relative to the EU 15/ 25, exhibits a significant number of participations and participating entities ranking in the th th 6 and 7 position respectively among 87 countries in total. Table 1: Participation in IST RJVs ( ) 7

8 Country Participations % % Prime % prime Entities participations entities Contractor contractors Germany France United Kingdom Italy Spain Greece Netherlands Belgium Sweden Switzerland Austria Finland Portugal Denmark Norway Ireland Poland Israel Hungary Czech Republic Slovenia Bulgaria Romania United States Cyprus Luxembourg Other Total Research work undertaken up to now on the networks formed under EU Framework Programmes taking into account either the network as a whole or the networks formed in the context of specific thematic areas such as the IST thematic priority, has confirmed that these networks are highly dependent on a core of central actors which gain in connectedness and significance over time by their repeated participation in different FPs. These actors are usually located in strategic or central positions within the network and therefore are those that are extensively involved in relations with other actors (Burt 1980; Wasserman and Faust, 1994). They may also have greater 8

9 access and control over resources and in consequence they are likely to be highly associated with innovative activity (Powel et al., 1996, Rogers, 1995, Bell, 2005). We next focus on the participation of the most central players per country in the IST RJVs network. The identification of these prominent actors was based on social network analysis and more specifically on the calculation of four centrality measures for each entity, namely degree centrality, eigenvector centrality, betweenness centrality and closeness centrality. Each of these four measures quantifies a different aspect of centrality: Although degree centrality is one of the simplest centrality measures it is also a highly effective measure of prominence or power. In many social settings actors exhibiting multiple connections with other actors tend to be more powerful. A more sophisticated version of degree centrality is eigenvector centrality. This index does not only address the quantity but also the quality of connections an actor has. In this way, connections to actors who are themselves well connected are more influential than connections to poorly connected actors. Therefore having a large number of connections does not necessarily give advantage to a specific actor, it also matters to whom it is connected to. The eigenvector centrality of node i is the sum of its connections to other nodes, weighted by their degree centrality. Betweenness centrality refers to the number of times an actor is located on the geodesic path between two other actors (Wasserman and Faust, 1994). In a network where information is diffused, an organization that exhibits a high degree of betweenness centrality can act as a gatekeeper and therefore has the potential to control the flows of information between other organizations (Freeman, 1979; Knoke and Kuklinski, 1982). Closeness centrality focuses on how close an actor is to all other actors in a network, indicating that actors occupying central network positions can quickly communicate information to others (Wasserman and Faust, 1994). Closeness centrality is lower for nodes that are more central in the sense of having a shorter network distance on average to other nodes. The above mentioned centrality indices were calculated for all organizations and a synthetic index has been produced by the joint rankings of organizations in terms of these four indicators. Since we are interested in the core actors of the network we focus the analysis on the sub-groups including the top 1% and top 5% of the 9

10 organizations on the basis of their joint ranking. Table 2 presents the participation intensity of the most central organizations in the EU 15 countries. The table indicates that although a small number of entities from each country assume a central role in the network (numbers in parentheses nest to entities indicate the share of central entities as a percentage of the total number of entities originating from each country) their participation intensity is disproportionately higher (numbers in parentheses indicate the share of the most central actors participations in the total number of participations of each country). For Greece, this general observation seems to hold even more prominently as a small number of central actors which represent just the 7.1% of the total number Greek participating entities accounts for the 42% of the total Greek memberships. Therefore, this finding points out that the presence of Greece in the IST RJV network is quite prominent and becomes even more important when the most central actors are taken into account. Table 2: Participation of the most central organizations per country in the IST RJV network Country Network of top 1% most central actors % of % of Participations Entities total total Network of top 5% most central actors % of % of Participations Entities total total Germany France Italy United kingdom Greece Spain Belgium Netherlands Sweden Austria Finland Portugal Denmark Ireland Luxembourg Further analysis of the Greek participation in the FP-driven IST network indicates that the role of Attica region in terms of shaping the total participation intensity of Greece is very important. A recent study has also indicated that Attica is among the top EU- 15 regions taking into consideration the intensity of participation in FP6 IST-RTD 10

11 projects of organizations located in each region (Malerba et al., 2006). Nevertheless the classification of the same regions according to their strength of science, technology and economic endowment indicated that Attica region was lagging behind This region is the urban conglomeration of the cities of Athens, Piraeus and suburban towns with an estimated population of 3,761,000 people (about 36% of the national total). Most administration institutions are there as well most national financial and commercial activities (e.g. 55% of the banking activity, 80% of the heavy industry, 80% of the seaborne commerce etc.). Table 3 points out that the organizations established in the Attica region account for the 71.7% of the total Greek entities participating in the IST network and for the 71.3% of the overall participations. Therefore the overall Greek membership is highly dependent on organizations activated in the Attica region. Table 3: Participation of the Attica region in the FP-driven IST network ( ) No of entities 391 Share of total entities 71.7% No of participations 1418 Share of total participations 71.3% No of prime contractors 76 Share of total prime contractors 74.5% Participation of prime contractors 198 Share of total prime contractors participations 74.2% Furthermore table 4 shows that although the total presence of Universities and research centers activated in the Attica region is small (8% of the total) compared to that of participating firms (73.4% of the total), they account for the 30% of the overall participation intensity. Moreover, a few of these institutions, especially Universities, assume a very central role in the network mainly by developing a large number of connections in the IST RJVs through the years. This finding is in the same line of reasoning with other studies which also suggest that educational institutions and research centers tend to have a more active and prominent role in the FP IST networks. On the other hand, firms have a less active and stable presence in these networks mainly because their participation is usually not oriented towards the exploitation of research outputs but primarily to the acquisition of new technological 11

12 knowledge, the setting of the new standards required for the development of new markets etc. Table 4: Participation by organisation type in the Attica region Total Network Top 1% Top 5% Type Participations Entities Participations Entities Participations Entities Education Industry Other Research Total The impact of FP-driven IST research networks on innovation in Greece: evidence from cases studies In order to better explain the relationship between FP-driven ICT networks and innovation, a number of case studies were conducted in organizations established in the Attica region. In particular, eight in-depth interviews were carried out so as to asses the effectiveness of European and national/regional IST-RTD projects in facilitating the development and deployment of IST technologies in this specific Greek region. Lengthy face-face interviews were carried out with eight different key players. The sample was indicative of the ICT research actors in Greece and it is comprised of four firms, two Universities, one public research institute and one non-profit research foundation. All interviewees assessed the role of IST-RTD network in advancing innovative ICT products, and services as very important. They also stressed that the network added value to the development and deployment process of innovative products, in direct or indirect ways. The direct network impact, which was described as commercial deployment or development of modules that can be readily used for the expansion or the development of an improved ICT product or service, was assessed as generally less extensive or significant compared to the indirect impact. All institutions pointed out that even if the development work in the IST-RTD projects leads to a prototype, it 12

13 appears that in practice much further work and resources should be allocated in order to transform this prototype to one suitable for commercial deployment. The indirect effect was described as the skills and knowledge diffused through the network, as well as the relations and trust built between partners. In particular, the interviewed firms emphasized the importance of the technological knowledge diffused during a project to their future involvement in the deployment of innovative ICT products in the Greek market. For example, all organizations emphasized that the knowledge accumulated through the network can be used for the improvement of services provided by the Greek public sector. All organizations, also stressed the importance of knowledge diffusion to the improvement of their human capital s capabilities and skills. Finally, the relations structured in the network context have been proved beneficial not only to the formation of future IST-RTD collaborations, but also to co-operations concerning the development and commercial deployment of other novel products or services in the Greek context. In sum, it was pointed out by all interviewees that the value of IST-RTD networks, which are primarily promoting pre-competitive research, lies for the most part in the learning effects that occur between partners and the impact that these may have on their capacity to innovate in the future. Therefore, although the immediate project outputs, measured in terms of patents and commercialized products, processes or services may be limited, the indirect or intangible network effects, beneath the innovation outputs are of major importance to the participating entities. 4. Further evidence for the occurring mismatch based on some revealing stylized facts Preceding empirical analysis- based on social network analysis and case studies- has identified a long, sustained and strong mismatch between Greece s high participation and central role in EU policy-driven IST research networks and science-based innovation in the Greek ICT sector. The occurrence of such a mismatch can be further supported by a broad set of revealing stylized facts regarding innovation in general in the Greek ICT sector as well as the level of ICT-related Networked Readiness Index of the country, which is treated as a proxy to the effective and productive use of ICT. In particular, the following pieces of evidence drawn from a variety of studies can be taken into consideration: 13

14 Greece is positioned in ICT below EU average both in the share of market novelties in turnover (i.e. importance of the ICT sector in the structurally adjusted indicator the share of sales due to market novelties of a country compared across countries) and in the labour productivity growth (i.e. importance of the ICT sector in the structurally adjusted indicator for labour productivity growth of a country compared across countries) [Europe Innova, 2007]. th Greece is positioned 24 among EU-25 and 48 among all countries included in the ranking based in the Networked Readiness Index, which measures the propensity of countries to leverage the opportunities offered by ICT for development and increased competitiveness (WEF s Global Information Technology Report s). 5. Why this mismatch? th A number of reasons have been identified in the Greek environments which prohibit the conversion of science and research- produced knowledge to commercially viable applications. Such barriers exist both in the supply and the demand side. But as a prominent Greek venture capitalist claims (Doxiadis, 2006): Most innovative applications and plans usually fail, in most places. But they do not fail everywhere for the same reason. In Greece innovations fail mainly because they are not been related early enough with users and potential customers. It is obvious that every new activity related to a new product or service, in its first steps to the market, needs a group of users who will choose to support and assist its development. This can be a group of early adopters in the case of a mass product or big reference clients in a business or an industrial market (public or private). Regarding the Greek ICT sector in particular the barriers identified by relevant empirical studies (Study of the ICT sector in Greece: Current situation and Future Trends, 2004 and 2006) and policy-makers and venture capitalists observations can be summarized as following: The size and the nature of Greek ICT firms constitute a barrier for the deployment of new science-based and innovative applications. Greek ICT sector and especially the IT segment is comprised of a large number of small 14

15 firms operating in a relatively small market where everyone sells everything. In this context R&D activity is limited to a small number of firms, which mostly collaborate with universities in a longer-term perspective. Most of the participating firms in research joint ventures with universities are doing so on an occasional basis. Creators of technological knowledge in Greece, mainly academics, do not usually think in terms of exploiting market opportunities. This historically shaped attitude prevents Greek scientists and developers from incorporating early enough in their research activity the perception and the needs of the potential customers. Greek market is of a relatively small size, thus lacking a critical mass of demanding users willing to exploit any promising research-based innovation. Moreover the Greek environment operates in a rather disorganized and anarchic manner which means loose rules; selective compliance to standard procedures and specifications, relatively weak and in many cases unclear commitments. Such an environment does not favour experimentation and innovation. Very limited role and scope exists for the public sector as a first user of and test-bed for innovations. This applies when the public sector functions as an intelligent and demanding customer, which is not the usual practice in most cases in Greece. Moreover, most of the ICT suppliers involved in public procurement bids behave as bad losers i.e. whenever they lose a competition they appeal to the court procedures, even when this not justified. This attitude creates delays and mistrust which prohibits experimentation and innovation in terms of products, services and procedures. 6. Knowledge-based entrepreneurship as a potential driving force for converting research results to innovative output Entrepreneurship is identified (Carlsson et al., 2006) as a missing mechanism converting economically relevant knowledge into economic activity. In this view, therefore, the existence/creation of economically relevant knowledge and the availability of dynamic entrepreneurship must be aligned in a sense, for knowledge- 15

16 spillover to have maximum impact on a nation s growth path. Importantly, the emphasis here is on the notion of alignment, as it is not any kind of scientific knowledge, nor any type of entrepreneurship, that can achieve this result. But what is the nature of new entrepreneurship in Greece? Based on the findings of the GEM (Global Entrepreneurship Monitoring) study for Greece for the years it appears that Greek entrepreneurs continue to be overwhelmingly focused on consumer-oriented endeavours, which represent almost 70% of the whole in 2005 (and are consistently above 55% throughout the three year period), which is the highest rate among all participating GEM countries. On the basis of these findings, new entrepreneurship in Greece has been described by Ioannides and Tsakanikas (2006) as shallow, in the sense that it is largely ineffective in improving the whole value chain of the Greek economy, as it focuses merely on the last link of this chain: the final consumer. Such activities are expected to have rather limited effects on economic growth in terms of employment, exports, etc. Moreover, they claim that the most disappointing finding is that the shallow character of entrepreneurial activity in Greece proves to be a characteristic not only of new ventures but also of established entrepreneurship. Indeed more than 60% of the established ventures address the final consumer. Hence, new entrepreneurial activity in Greece tends merely to reproduce the sectoral distribution of activities in the Greek economy, rather than restructure it. For the amount of high-potential knowledge-based entrepreneurship to increase an important driver is missing. To put it metaphorically what is required is the alignment between scientific and technological competence with the propensity and the ability to pursue entrepreneurial activity. In this paper, we argue that enriching the human capital of a social group that is most exposed to scientific and technological knowledge, i.e. engineers, and in particular ICT related engineers, early enough (i.e. during their undergraduate studies), towards entrepreneurship will increase the specific weight of a particular kind of opportunity entrepreneurship i.e. technological entrepreneurship. This in turn can foster and upgrade the growth prospect and the development trajectory of the country. But, how enriching this type of human capital can happen? It is well argued that mental thought processes that entrepreneurs engage in to discover, evaluate and exploit opportunities are not fixed and may be taught (Acs et al, 2005). Thus, by providing engineering students in their curriculum the necessary business and market related knowledge as well as complementary skills 16

17 the engineering education system could empower them to better recognize and perceive technological opportunities during their career path and convert them to market opportunities and business ventures. In this respect, technical thinking and engineering feeling can be complemented during engineering education studies with a knowledge background on market and business environment understanding, managerial and strategic thinking and entrepreneurial feeling. The major strategic issue is how to motivate and prepare engineering students to undertake at some point in their careers entrepreneurial initiatives based on knowledge and high-tech. If this is the case, to that end a very important shift is needed in the engineering education in Greece. References Acs Z. J., Audretsch D.B., Braunerhjelm P., Carlsson B., The Knowledge Spillover Theory of Entrepreneurship, Discussion Papers on Entrepreneurship, Growth and Public Policy , Max Planck Institute of Economics, Group for Entrepreneurship, Growth and Public Policy. Bell G.G Clusters, networks and firm innovativeness, Strategic Management Journal, 26: Borgatti S.P., Foster P.C The network paradigm in organizational research: a review and typology, Journal of Management, 29(6): Burt RS Models of network structure. Annual Review of Sociology, 6: Carlsson B., Acs Z. J, Audretsch D. B., Braunerhjelm P The knowledge filter, entrepreneurship, and economic growth. Paper presented at the DRUID 2006 Summer Conference on Knowledge, Innovation and Competitiveness: Dynamics of Firms, Networks, Regions and Institutions, June, Copenhagen, Denmark. Chatziparadeisis A The R&D indicators in the knowledge-based economy: The research paradox, Proceedings of the European Conference on Quality in Survey Statistics, April, Cardiff, UK. 17

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19 Rogers E.M Diffusion of Innovations (4th edn).free Press: New York. Tsakanikas A Current Trends and Prospects of the ICT Sector in Greece. FEIR/IOBE. Wasserman S., Faust K Social Network Analysis: Methods and Applications. Cambridge University Press, Cambridge. World Economic Forum, Global Information Technology Report, : Connecting to the Networked Economy. 19