Regional Innovation Systems in Policy Laboratories

Andreas Pyka,Matthias Mueller,Muhamed Kudic

doi:10.3390/joitmc4040044

Abstract

Innovation policy and business strategy often expect that investing in private and public research and development will immediately produce a flow of products and processes with high commercial and social returns. Policymakers and managers implicitly follow the logic underlying most linear innovation models assuming a well-defined and uni-directional relationship between R&D spending as input and innovation rents as output of the innovation process. Modern innovation economics dismisses the simplified approximation of knowledge by R&D investment and, instead, considers complex knowledge generation and diffusion processes in innovation networks. From this angle, the disappointing performance of traditional approaches is traced back to strong limits of conventional steering, control, and policy instruments. In this paper, we show that the new view of knowledge generation and diffusion in innovation networks allows for an alternative and has led to systemic approaches in innovation analyses. Combined with computational approaches like agent-based modeling, this new view enables today innovative tools in policy consulting. Using the example of regional innovation policy, we introduce a policy laboratory in which innovation processes can be analyzed in depth to see the impact of different innovation policy instruments in-silico. This ex-ante evaluation helps considerably to improve the understanding of innovation processes and with it the performance of innovation policy.

Highlights

Policy makers all over the world are concerned with the provision of good conditions for income generation in their regions
Whereas an exploitative regional innovation policy focuses on the strengthening of existing industries and eventually the attainment of global industrial leadership, the explorative policy design is embedded in long-term considerations to maintain a globally competitive industrial portfolio
The aim of this paper is to introduce the reader to a policy laboratory designed for a region in the southwest of Germany, namely Heilbronn-Franken, to support the design of future-oriented policy instruments

Summary

Introduction

Policy makers all over the world are concerned with the provision of good conditions for income generation in their regions. Regional innovation policy is considered as one of the most important policy instruments to support incomes by allowing a competitive industrial structure to emerge, thereby generating high-skilled and well-paid jobs (e.g., [2]). Decisions are to be made concerning the distribution of the policy attention between a support of prevailing industrial structures and the support of the emergence of new industries. This can be considered as the regional counterpart of the well-known firm level trade-off between exploitation and exploration [3]. The exclusive focus on existing structures maximizes the support of short-term incomes but endangers sustainable income generation in a global environment characterized by structural change driven by innovation and

Objectives

Results

Conclusion