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Assessing Innovation Systems in Australia Don Scott-Kemmis Innovation Management and Policy Program National Graduate School of Management Australian National University. Evolution of Innovation Systems. NIS a useful concept but not yet a strong framework for analysis and evaluation

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Assessing innovation systems in australia don scott kemmis

  • Assessing Innovation Systems in Australia

    • Don Scott-Kemmis

    • Innovation Management and Policy Program

    • National Graduate School of Management

    • Australian National University

Evolution of innovation systems
Evolution of Innovation Systems

  • NIS a useful concept but not yet a strong framework for analysis and evaluation

  • Innovation systems approaches challenging to apply in Australia – fragmentation, international links.

  • Systemic failure can be a driver of evolution

  • Analysing how innovation systems evolve and respond to failure should give insight into the NIS

The laggard perspective on australia
The Laggard Perspective on Australia

High dependence on natural resources- 80% of the top fifteen export products are resource-based commodities with a low level of processing

Failing to develop new areas of specialisation and growth

Productivity growth in the 90's the result of one-offs: micro-economic & ICT

Weaknesses in new firm formation

The poor performance in R&D and patenting signals the weaknesses in management, scale and international positioning of Australian industry.

Declining position in many ‘high tech’ sectors indicates the extent to which Australia is being left behind the frontier of innovation and growth- Large and growing trade deficit in ICT products and services

One of the lowest in the OECD in

  • BERD

  • investment in venture capital;

  • International patenting activity (per mill. Population)

The boom perspective on australia
The Boom Perspective on Australia

A broadly based dynamic and flexible economy, diversified across markets, and increasingly sectors, underpinned by competitive domestic markets and flexible labour markets.

High-level human resources and strong research organisations facilitate the rapid uptake of new knowledge produced anywhere.

Imported knowledge and equipment combined with local knowledge and capability supports active problem solving and systems integration in a range of sectors generating relatively high levels of productivity.

A ‘fast-user’ strategy combined with natural and human resources is a sound basis for future prosperity.

  • High and increasing productivity;

  • Relatively high level of public sector R&D;

  • Substantial growth in niches markets in key manufacturing sectors: automobiles and components, wine, boats.

  • Maintaining strong competitiveness in resources sectors through the effective application of new technology, including IT;

  • A strong ICT services sector and high growth in ‘knowledge based services’;

  • Rapid and broadly-based uptake of new ICT.

Characteristics of australian innovation 1
Characteristics of Australian Innovation-1

Knowledge Based Resource Industries

Conservative Evolution

  • Scientific strengths

  • Technological specialisation

  • Patenting behaviour

  • Specialisation in export products

Assessing innovation systems in australia don scott kemmis
Changes in ‘revealed comparative advantage’ in Australian scientific publications output in four periods

Science linkage vs technology cycle time 1980 2001
Science Linkage vs. Technology Cycle Time (1980-2001) Australian scientific publications output in four periods

Characteristics of australian innovation 2
Characteristics of Australian Innovation-2 Australian scientific publications output in four periods

Systems Integration Plus

  • No core technology production

  • Problem solving – but sophisticated

  • Technology mobilisation for resource based industries and services

  • ICT diffusion through the innovation system

Approach to analysis looking at change sectoral approach more or less
Approach to Analysis: Looking at Change. (RF),2000–01 (% of GDP)Sectoral Approach– more or less!

  • Building Blocks

  • Actors and Networks: interaction, competences

  • Knowledge Bases: appropriation, acquisition, increasing returns

  • Institutions: coordination, incentives, ‘rules of the game’, standards.

  • Technological structure

  • Problem solving

  • Innovation system evolution phases
    Innovation System Evolution Phases (RF),2000–01 (% of GDP)

    Techno-economic opportunity




    Techno-economic problem

    A possible approach to functions in the evolution of innovation systems
    A Possible Approach to Functions in the Evolution of Innovation Systems

    Guide Search

    Resource supply

    Reduce social uncertainty

    Incentives to innovate

    Identify Problems

    Create new Knowledge


    Recognise the potential for growth

    Facilitate Kn & Info Exchange

    Stimulate/ create markets

    Counteract resistance to change

    Based on Johnson, 2001

    A possible approach to an innovation systems failure framework

    Innovation Systems Failure Framework Innovation Systems

     ‘Rules’: System failures

    Actors – missing actors



    Kn. Org’ns

    Third Parties

    Infrastructural failures:

    Institut’l failure




    Interact’n failure



    Capabilities failure

    A Possible Approach to an Innovation Systems Failure Framework

    Based on Woolthuis et al (2004)

    Systemic problems and responses in the evolution of the wine industry

    Knowledge Base Innovation Systems

    Actors & Interaction



    Excess capacity

    major corpns brings prof’l mngmt

    Dev’t of export market Kn.

    Old family companies

    Growth of large local wine companies

    Breaking out of the euro paradigm


    Developing the robust product design and the ‘system’

    Kn. Based prod’n

    Specialisation in all aspects

    Strong networking

    Strong training organisations

    rural R&D framework.

    industry associations effective collective action & lobbying

    Export standards

    Industry ‘visions’


    Rapid growth

    Strong kn. base in major firms

    Kn. sharing.

    use of int’l Kn.

    new analytical techniques

    Increasing scale

    specialist service providers

    vocational training.

    Consolidation of the institutional framework.

    Systemic Problems and Responses in the Evolution of the Wine Industry

    Emerging photovoltaic innovation systems

    Increasing returns Innovation Systems

    Institutional Alignment

    Standard’n and Reuse of knowledge

    System Failures


    Lack of economies of scale

    Ad-hoc policies

    lack of political & social legitimation

    Low level of subsides and incentives

    Excellent science base but policies have limited the level of experimentation

    Relevant but fragmented knowledge base -mainly exploited by overseas innovation systems

    Much of the RAPS based knowledge cannot be applied to urban systems

    Lack of industrial actors with resources to bring technology to mass-production

    Level of incentives to attract large firms

    Lack of a national climate for supporting renewable energy

    Emerging Photovoltaic Innovation Systems

    Focus and change
    Focus and Change Innovation Systems

    • Specialisation and Coordination

      -organisations and institutions for bridging, collaboration, coordination

    • Local problem solving and global search

    • Focus and Diversity

      -Co-evolution of supply and demand,

      -Broad kn & education base ensuring diversity for perceptions of problems & opportunities, initiating new trajectories problem solving, renovation of knowledge bases