‘Regions for Economic Change – Innovating through EU Regional Policy’

1. COLLABORATIVE INNOVATION andINTER-REGIONAL NETWORKS Prof. Nicos KomninosURENIO Research Unit – Aristotle Universitywww.urenio.org ‘Regions for Economic Change – Innovating through EU Regional Policy’ EU Conference, Brussels, 12 - 13 June 2006

2. Collaborative Innovation (an introduction) • En emerging model of K-networks and I-switches • Collaborative innovation is shaping all forms of innovation: • Product innovation, linked to the development of new products and the rise of new industry sectors; product innovation characterizes the early stages of an industry when many small companies co-exist introducing a lots of novel products; • Process innovation, related to the use of more advanced production technologies; they become more important as volume is rising and industry searches for economies of scale and scope; • Organizational innovation, introducing more efficient cost arrangement by re-organizing the entire supply chain though just-on-time delivery systems, lean production, co-operation networks, flexibility, and optimization of producer-supplier relations. • Most newer theories of innovation (systems of innovation; brokering theories of innovation; open innovation model) acknowledge that external knowledge has become more important than internal knowledge. This trend is feeding CI.

3. Collaborative Innovation • Knowledge networks in product innovation

4. Collaborative Innovation • Knowledge networks in process innovation

5. Collaborative Innovation • Knowledge networks in organizational innovation Information-Knowledge Products - Services

6. Collaborative Innovation • K-networks are developing at three directions Partnerships with academia have become a strategic component of collaboration. Companies tap to knowledge found in universities and in many cases localization decisions are driven by the prospect of such collaboration. Partnerships with academia is a core objective in most national R&D policies, and the US and European Union science and technology policies as well. Inter-firm strategic technology collaborations are more and more frequently used as a source of knowledge. Joint R&D is used to complement internal resources in the innovation process, enhancing the innovation input and output. The intensity of in-house R&D also stimulates collaborations and the number of joint R&D activities with other firms and institutions. Customers are asked to express their needs and suggest products and services. Complaints and ideas are routed from the front-line customer contacts, people in sales and marketing departments to R&D and product design team. New product ideas are no longer developed in an isolated research laboratory, and customer input is important in shaping product development process.

7. Collaborative Innovation • Knowledge networks: an endless typology • The selection of partners engaged in networking appears to be related to the degree of innovation (product/ process /organizational): • Incremental innovators rely more frequently on their customers as innovation partners. • Firms that have products new to the market are more likely to collaborate with suppliers and consultants. • More advanced innovators, and the development of more radical innovations, demand more interaction with research centres and universities. • Networks differ with respect to: • The organizer partner (inventor, innovator, financier, marketer); • The way partners areconnected (on the supply chain, pursuit of common objectives, use of a resource); • The level of integration – organizational interdependence (subsidiary, external transaction); • The geographical location of partners (intraregional, interregional, global)

8. Case 1: Innovation based on intra-regional K-networks • Regional innovation poles, Greece Regional innovation poles is a new policy of the GSRT of Greece, which supports the development of inter-connected clusters in regions of Greece showing a critical mass in certain industry sectors. Every pole is creating a sectoral system of innovation, based on small number of clusters or sectors (up to 3), and extended cooperation networks between the R&D labs, businesses, and technology intermediary organizations. An ICT pole, based on manufacturing of communication equipment (NACE 32), telecommunications services (NACE 64), and computer services (NACE 72)

9. Case 1: Innovation based on intra-regional K-networks • Instruments for networking within the poles

10. Case 2: Innovation based on inter-regional K-networks • New product development over EU regions NPD-Net, Interreg 3C project: Key concept is the ‘distributed product development’: break down of product development process into a suite of actions /tasks. Each task is be executed by a different organisation (University lab, research centre, specialised consultant, technology intermediary organization, market research company, marketing agency) located in different regions. The logical sequence of tasks is transformed to a network of interconnected actors, which cooperate for resolving a defined problem along an established methodology.

11. Case 2: Innovation based on inter-regional K-networks • New product development over EU regions A regional New Product Development Centre coordinates interregional networks and the exchange of expertise among regions. In the NPD-net, each regional NPD centre is specialising in a small number of industries, which show high demand for product innovation, and may sustain a market of product development services. The selection of partners is competitive. The NPD Centre and its expert networks have to focus on selected industries to be able to gather and offer state-of-the-art product development services.Both the demand and supply of product development are extremely sectoral sensitive. This is particularly true for the more technical aspects of product development, testing, and manufacturing.

12. Case 3: Innovation based on global K-networks • InnoCentive • InnoCentive is a global R&D and innovation network. It uses the Internet to connect research-driven companies to top scientists worldwide. • Seeker companies announce anonymously scientific problems (as Challenges) and the award that intend to pay in case of solution. • Solver scientists are registered and attempt to give a solution to posted problems. Solvers work simultaneously and competitively. • InnoCentive facilitates the collaboration process, defines the intellectual property rights of the collaboration, and guaranties the award payment. Economist Magazine Innovation Prize, 2005 The Business Processes Award

13. Case 3: Innovation based on global K-networks • InnoCentive Seeking companies come mainly from the chemical and bio-medical sectors, while it is expected an extension to ICT and engineering industries. Solvers are individual scientists or organized labs. InnoCentive has about 80.00 registered scientists from 180 countries. Collective subjects representing an R&D department or a university lab may register as Solvers and submit solutions springing from their collaborative research. To enrich a wide network of expertise, InnoCentive has signed memoranda of understanding with universities and research centres all over the world. India: India’s Council of Scientific and Industrial Research, the National Chemical Lab in Pune, the Indian Institute of Chemical Technology in Hyderabad. China: the Chinese Academy of Sciences, the National Natural Science Foundation of China. Russia: the Moscow State University, and St. Petersburg University.

14. Conclusions • 1. In the collaborative innovation model, innovation is based on a combination of knowledge networks (skills and know-how) & institutional switches (agreements between network partners). • 2. Knowledge networks are mainly inter-regional; what changes is the degree of inter-regional composition of partners; most intra-regional; most inter-regional; most global. However, an emerging trend is towards global networks, integrating partners from the developing world, India and China. • 3.Every network is creating its own 3D space: physical, institutional, and digital. The physical space of the network is based on the geographical location of partners. The institutional space on the agreements between the partners (IPR, joint product development, exploitation of IPR, spin-offs) and their and regulation mechanisms. The digital space of the network is based on online forms of communication and real-time digital interaction. There is trade off between these spaces: the more geographically dispersed is a network, more tight institutional and digital interaction is needed.

15. Conclusions • 4. Knowledge networks and institutional switches may be set by any partner in the innovation process: companies, universities, technology producers; private and public organizations. Networks /switches are emerging from the market (bottom-up), but may also be set by policy makers (top-down). • 5.Networks should be sustainable. After a first period of eventual public support, they should cover the running costs through the provision of useful services at market prices. • 6.The selection of network partners should be based on competitive procedures (auctions, open calls, tenders). It is a matter of equal treatment (competition policy), but also selecting the most effective partners. • 7. Cooperative innovation and knowledge networks enforce the fusion of innovation with information technologies, introducing a next paradigm of innovation: Intelligent Innovation