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KIT Knowledge, Innovation and Territory. ESPON 2013 Programme European Territorial Evidence for EU Cohesion Policy and Programming 13-14 June 2012 Aalborg, Denmark. The project team. Lead Partner (LP): BEST, Politecnico di Milano, Italy :

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Kit knowledge innovation and territory

KIT

Knowledge, Innovation and Territory

ESPON 2013 Programme

European Territorial Evidence for

EU Cohesion Policy and Programming

13-14 June 2012

Aalborg, Denmark


Kit knowledge innovation and territory

The project team

  • Lead Partner (LP):BEST, Politecnicodi Milano, Italy:

    • Project Coordinator: Prof. Roberta Capello (Full Professor in Regional Economics)

    • Project Manager: Camilla Lenzi (Assistant Professor)

    • Prof. Roberto Camagni (Full Professor in Urban Economics)

    • Dr. Andrea Caragliu (Post-Doc Fellow)

  • Project Partner 2 (PP2):CRENOs, University of Cagliari, Italy:

    • Prof. RaffaelePaci (Full Professor of Applied Economics)

    • Proff. EmanuelaMarrocu and Stefano Usai (Associate Professors of Econometrics and Economics)

    • Dr. Alessandra Colombelli (Post-Doc Fellow)

    • Dr. Marta Foddi (Research Assistant)

  • Project Partner 3 (PP3): AQR, University of Barcelona, Spain:

    • Prof. Rosina Moreno (Full Professor in Applied Economics)

    • Prof. JordiSuriñach (Full Professor in Applied Economics)

    • Prof. Raúl Ramos (Associate Professor in Applied Economics)

    • Dr. Ernest Miguélez (Technical Researcher and PhD student)


Kit knowledge innovation and territory

The project team

  • Project Partner 4 (PP4):LSE, Great Britain:

    • Dr. RiccardoCrescenzi (Lecturer in Economic Geography)

    • Prof. Andrés Rodríguez-Pose (Professor in Economic Geography)

    • Prof. Michael Storper (Professor in Economic Geography)

  • Project Partner 5 (PP5): University of Economics in Bratislava, Slovakia:

    • Prof. Milan Buček (Full Professor in Regional Economics and Policy)

    • Dr. Miroslav Šipikal (Coordinator - Senior Lecturer)

    • Dr. Rudolf Pástor (Lecturer)

  • Project Partner 6 (PP6):University of Cardiff, Great Britain:

    • Prof. Phil Cooke (Full Research Professor in Regional Economic Development)

    • Dr. Selyf Morgan (Researcher)

    • Julie Porter (Support Coordinator)


Kit knowledge innovation and territory

General goal of the KIT project (1)

The KIT project has the general aim to help – on the basis of sound scientific research – the setting up of strategies on innovation that are consistent with the overall reforms of EU Cohesion Policy.

The KIT project provides suggestions for implementing smart specialization policies in the field of innovation - called for by the EU in its official document Regional Policy Contributing to Smart Growth in Europe (EU, 2010) - and to launch a territorial strategy to achieve a “smart growth” in the years to come.


Kit knowledge innovation and territory

ERDF Reform 2009 - 2012

DG-Regio and ESPON 2006-2013

DG Research - 2009

Europe 2020 - 2010

Barca Report

2009

KIT Project ‘Regional Patterns of Innovation’ 2011-12

‘Smart Specialization’ in R&D policies

Smart Growth pillar ‘Innovation Europe’ Flagship Initiative

Smart Innovation Policies

General goal of the KIT project (2)

The KIT project is at the heart of an important policy debate.


Kit knowledge innovation and territory

General goal of the KIT project (3)

The achievement of such a goal requires greater understanding of:

  • diffusion processes of knowledge and innovation;

  • the identification of the pathways towards innovation and modernization;

  • the socio-economic impacts of innovation and knowledge in space.

  • Main result:

  • the geography of innovation is much more complex than a simple core-periphery model.

  • The identification of regional specificities in innovation patterns is essential to build targeted normative strategies efficient for a cohesion policy goal.


Kit knowledge innovation and territory

Main ideas throughtout the project

  • R&D (and formal knowledge in general) does not necessarily equate innovation;

  • innovation does not necessarily equate regional growth.

  • these linkages are strongly mediated by local territorial assets.


Kit knowledge innovation and territory

A) Main spatial trends of innovation and knowledge

B) Identification of the regional pathways towards innovation and modernization and their territorial elements

C) Impact of the different modes of innovation and knowledge on regional performance

D) Case studies

E) Policy implications for the development of a successful knowledge economy

Specific goals of the KIT project


Kit knowledge innovation and territory

A) Main spatial trends of innovation and knowledge

B) Identification of the regional pathways towards innovation and modernization and their territorial elements

C) Impact of the different modes of innovation and knowledge on regional performance

D) Case studies

E) Policy implications for the development of a successful knowledge economy

Specific goals of the KIT project


Kit knowledge innovation and territory

Definition of the Knowledge Economy

Basic idea: knowledge-based economy has not got a unique interpretative paradigm.

Different approaches are necessary:

  • A1. Sectoral approach(presence in the region of science-based, high-technology sectors).

  • A2. Functional approach(presence in the region of functions like R&D, patents, human capital).

  • A3. Relation-based approach(presence in the region of interactive and collective learning processes).


Kit knowledge innovation and territory

The Knowledge Economy in Europe

The Knowledge Economy in Europe is a very fragmented picture.

What is striking from this map is the high number of regions in which the knowledge economy is still in its infancy.


Kit knowledge innovation and territory

Spatial trends of innovation in Europe

  • Innovation

    • productinnovation;

    • processinnovation;

    • product and/or processinnovation;

    • marketing and/or organisationalinnovation

    • environmentalinnovation

    • social innovation

  • Source: CIS/EUROSTAT


Kit knowledge innovation and territory

Spatial trends of innovation in Europe

Product innovation only

Process innovation only


Kit knowledge innovation and territory

Share of innovation by type of knowledge-economy regions


Kit knowledge innovation and territory

R&D expenditures on GDP and innovation

R&D expenditure / GDP

Share of firms introducing product and/or process innovation


Kit knowledge innovation and territory

R&D expenditures on GDP (average 2006-07)

In 2007 33 regions had achieved 3% of R&D expenditures on GDP (11% of NUTS2, representing 16% of EU GDP) and concentrated in a few countries in the North of Europe. Moreover, a very high number of regions belong to the lowest class, with R&D on GDP lower than 0.5% (representing 5% of GDP).

Do we really take advantage from an innovation policy with a common aim for all countries/regions?


Kit knowledge innovation and territory

Patenting activity: comparison with China and India


Kit knowledge innovation and territory

… and USA

The spatial concentration of R&D in order to exploit economies of scale seems to be the model followed by emerging countries, re-launching in a decisive way the debate of the importance of the identification of a European Research Area.


Kit knowledge innovation and territory

Results and questions from the descriptive analysis

Results:

Only a fewregionshaveachieved the 3% ofR&D/GDP, and most are below 0.5%.

Only a fewregions show a pattern ofinnovationthatgoesfromR&Dtoinnovation.

Questions:

How do regions innovate withoutR&D?

Which are the territorialpreconditions in orderforregionstomovefromknowledgetoinnovation and togrowth?


Kit knowledge innovation and territory

A) Main spatial trends of innovation and knowledge

B) Identification of the regional pathways towards innovation and modernization and their territorial elements

C) Impact of the different modes of innovation and knowledge on regional performance

D) Case studies

E) Policy implications for the development of a successful knowledge economy

Specific goals


Kit knowledge innovation and territory

Territorial patterns of innovation

  • A territorial pattern of innovation is a combination of context conditions and of specific modes of performingthe different phases of the innovation process.

  • Context conditions:

  • Internal generation

  • External attraction

  • Different phases of the innovation process:

  • - from knowledge to innovation

  • - from innovation to regional performance

of knowledge and innovation


Kit knowledge innovation and territory

Region j

Basic knowledge

(General Purpose Technologies, GPTs)

Basic knowledge

(General Purpose Technologies, GPTs)

Education, human capital, accessibility, urban externalities

Education, human capital, accessibility, urban externalities

Specific, applied knowledge

Specific, applied knowledge

Region i

Territorial receptivity

Territorial receptivity

Cross-regional cognitive proximity

relational capacity

Collective learning

Product and process innovation

Basic knowledge

(General Purpose Technologies, GPTs)

Economic efficiency

Education, human capital, accessibility, urban externalities

Education, human capital, accessibility, urban externalities

Specific, applied knowledge

Entrepreneurship

An endogenous innovation pattern

  • A European science-based area:

  • basic general purpose technologies

2) An applied science area:

high patent activities in diversified

applied technology fields


Kit knowledge innovation and territory

Region j

Basic knowledge (General Purpose Technologies, GPTs)

Education, human capital, accessibility, urban externalities

Specific and applied knowledge

Territorial creativity

Region i

Collective learning

Product and process innovation

Economic efficiency

Specific and

applied knowledge

Capabilities

Entrepreneurship

A creative application pattern

3) A smart technological application area

External specific technologies enhancing

the upgrading of local innovation

4) Smart and creative

diversification area

External tacit knowledge

enhacing local innovation


Kit knowledge innovation and territory

Region j

Collective learning

Basic knowledge (General Purpose Technologies, GPTs)

Education, human capital, accessibility, urban externalities

Product and process innovation

Specific and applied knowledge

Entrepreneurship

Region i

Territorial attractiveness:

FDIs

Product and process innovation

Economic efficiency

An imitative innovation pattern

5) An imitative innovation area

Innovation imitation through

territorial attractiveness


Kit knowledge innovation and territory

Territorial patterns of innovation

Pattern 1= A European science-based area

Pattern 2 = An applied science area

Pattern 3 = A smart technological application area

Pattern 4 = A smart and creative diversification area

Pattern 5 = An imitative innovation area


Kit knowledge innovation and territory

Territorial conditions associated to each pattern

Regional preconditions for knowledge and innovation creation

Regional preconditions for external knowledge and innovation acquisition


Kit knowledge innovation and territory

Results and questions from the patterns identification

  • Differentiated patterns of innovation and modernization, much more complex than a core-periphery model;

  • our impression is that none of these patterns is by definition superior to another and, on the contrary, each territorial pattern may provide an efficient use of research and innovation activities generating growth.

  • But this last statement calls for empirical analysis.


Kit knowledge innovation and territory

A) Main spatial trends of innovation and knowledge

B) Identification of the regional pathways towards innovation and modernization and their territorial elements

C) Impact of the different modes of innovation and knowledge on regional performance

D) Case studies

E) Policy implications for the development of a successful knowledge economy

Specific goals


Kit knowledge innovation and territory

Migration of inventors

Research collaborations

3.2

Productivity growth

4.3

Knowledge input (R&D)

Knowledge output

Innovation

4.4

4.1

GDP growth

3.1

4.2

Employment growth

3.3

Selected questions to be answered


Kit knowledge innovation and territory

What is the return of knowledge production to R&D expenditure?

Map: Elasticity of knowledge production to R&D

The return of R&D expenditure to knowledge production increases by increasing R&D expenditure up to a certain level, then it starts decreasing.

Pattern 5

Pattern 1

Pattern 2

Pattern 4

Pattern 3


Kit knowledge innovation and territory

Elasticity of knowledge production to R&D: an international comparison


Kit knowledge innovation and territory

What is the return of knowledge production to human capital?

Increasing returns up to a certain threshold, then decreasing returns.

Elasticity is higher than for R&D.

Pattern 5

Pattern 4

Pattern 1

Pattern 2

Pattern 3


Kit knowledge innovation and territory

What is the return of knowledge production to external knowledge ?

Pattern 5

Pattern 5

Pattern 4

Pattern 4

Pattern 3

Pattern 3

Pattern 2

Pattern 2

Pattern 1

Pattern 1


Kit knowledge innovation and territory

Do knowledge spillovers play a role in producing internal knowledge?

Does innovation impact on employment growth rates?

Intra-regional inventors’ mobility

Inter regional inventors’ mobility

  • Map: Elasticity of employment growth to product innovation

  • On average, product innovation is a labour saving activity but:

  • it creates jobs in regions where production functions are present

  • (new products need to be produced)


Kit knowledge innovation and territory

Does R&D expenditure generate innovation?


Kit knowledge innovation and territory

Note: elasticity values to knowledge and innovation are computed according to the estimated coefficients reported in table 4. Elasticity values of GDP growth to knowledge are computed according to model 2 (EU average value) and model 4 (elasticity values by patterns of innovation). Elasticity values of GDP growth to innovation are computed according to model 6 (EU average value) and model 10 (elasticity values by patterns of innovation).

Elasticies of GDP Growth to Knowledge and Innovation


Kit knowledge innovation and territory

Does R&D expenditure generate GDP growth?

Map: Elasticity of GDP to R&D by patterns

A critical mass is required in order to achieve increasing returns (U-shaped form).

Pattern 4

Pattern 3

Pattern 5

Pattern 2

Pattern 1


Kit knowledge innovation and territory

Do knowledge and capabilities increase TFP?


Kit knowledge innovation and territory

Does innovation generate increases in GDP growth rates?

Yes, but if innovation achieves a critical mass!

Imitative innovation generates lower GDP growth rates than new innovation

Pattern 5

Pattern 4

Pattern 3

Pattern 2

Pattern 1


Kit knowledge innovation and territory

A) Main spatial trends of innovation and knowledge.

(both endogenous knowledge creation and flows from outside)

Output: typologies of innovative regions

WP 2.1 and 2.2

B) Territorial elements explaining spatial trends.

Different modes of innovation and knowledge creation and diffusion.

A comparison with other regional knowledge economies in more advanced and emerging countries

Output: typologies of territorial patterns of innovation

WP 2 3.1 and 2.5

C) Impact of the different modes of innovation and knowledge on regional performance.

Output: typologies of regional performance based on innovation and knowledge

WP 2.3.2

D) Case studies

WP 2.4.1 and 2.4.2

E) Policy implications for the development of a successful knowledge economy

WP 2.6

Case studies


Kit knowledge innovation and territory

12 case studies

  • 6 case case on best practiceofknowledgecreation:

  • - Electronics (Pisa, Tuscany)

  • Automotive in Piedmont

  • Biotech in Oxford

  • ICT in Cambridge

  • ICT in Kosice

  • ICT in Bratislava

  • 6 case studies on best practiceofknowledgeacquisition:

  • Wine in Tuscany area;

  • Wood processing in BanskaBystrica region

  • Digital media in Cardiff (Wales)

  • Foodsector in West Wales

  • ICT Milan (Lombardy)

  • Automotive in Bratislava region


Kit knowledge innovation and territory

Value added of the case studies

Territorialelementsexplaininnovationpatterns more than the sectoralelements.

Case studies have provided an in-depth analysis of the territorial elements behind patterns of innovation.

Case studiesdemonstrated the dynamicsofregionsfromone pattern ofinnovationtoanother.

Inductiveanalysiswitnessesthat the territorialelementssupporting the differentinnovationpatterns are thoseconceptuallyidentified.


Kit knowledge innovation and territory

A) Main spatial trends of innovation and knowledge

B) Territorial elements explaining the spatial trends

C) Impact of the different modes of innovation and knowledge on regional performance

D) Case studies

E) Policy implications for the development of a successful knowledge economy

Specific goals of the KIT project


Kit knowledge innovation and territory

Key policy messages (1)

  • Unconventional policy warnings with regard to some general beliefs, namely:

  • - an innovation-driven economy is not necessary linked to a knowledge economy;

  • formal knowledge is not the only knowledge asset on which a modern economy rests;

  • R&D expenditures are not the only policy tools to develop innovation and growth;


Kit knowledge innovation and territory

Key policy messages (2)

  • if a knowledge economy is developed, this does not give rise to the same growth opportunity everywhere;

  • external knowledge cannot easily and automatically be used in an efficient way by all regions.

  •  There is a clear need for thematically-regionally focused innovation policies.


Kit knowledge innovation and territory

Smart innovation policies

  • Smart innovation policies may be defined as those policies able to increase the innovation capability of an area by boosting effectiveness of accumulated knowledge and fostering territorial applications and diversification, on the basis of local specificities and the characteristics of already established innovation patterns in each region.


Kit knowledge innovation and territory

Smart innovation policies


Kit knowledge innovation and territory

Smart innovation policies


Kit knowledge innovation and territory

Elasticity

of GDP toR&D

New applications in new industries

1

Creation of new local competences adding local value to external competences

Reinforcement of local science-based knowledge

2

5

3

4

Diversification of technological fields in which to innovate

Reinforcement of local applied science

R&D / GDP

Evolutionary smart innovation policies


Thank you very much for your attention

Thank you very muchfor your attention!


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