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INTELLIGENT CITIES Towards Global – Intelligent Innovation Ecosystems
Nicos KomninosURENIO Research, Aristotle University
www.urenio.org
PhD seminar “Intelligent cities: Systems and Environment of Innovation”
Lecture 2
1
Contents
2nd G: Regional systems of innovation
1st G: Innovation clusters and technology districts
3rd G: Intelligent / global innovation ecosystems
Introduction: Intelligence and Innovation
2
Research on human intelligence clearly links intelligence and innovation,arguing that intelligence is bears elements of novelty, problem-solving,achieving something that has never been done before by the particular
individual.“I think of intelligence as the high-end scenery of neurophysiology – theoutcome of many aspects of an individual’s brain organisation which bears on doing something one has never done before . . . This captures the element of novelty, the coping and groping ability needed when there is no ‘right’ answer, when business as usual isn’t likely to suffice”.
Calvin, W.H. (1998) How Brains Think. Evolving Intelligence, Then and Now, London: Phoenix. pp. 14 and 18.
The concept of the ‘intelligent city’ integrates all aspects of human,collective, and artificial intelligence enabling innovative behaviour andperformance of a population / community / city.
Innovative behaviour and performance, however, is systemic, emerging from systems of interactions between science, technology, production, funding, intermediary organisations and end-users. The foundation of intelligent cities are on territorial (place-based) systems of innovation. 3
Introduction: Intelligence and Innovation
Systems of innovation exhibit a continuous spatial and social enlargement enabling an increasing number of actors to be involved in the innovation process. Knowledge interactions and boundaries of innovation systems expand geographically all over the world.
Small innovation systems, based on physical proximity within clusters, have evolved into larger-scale regional / national systems due to institutional agreements and state policies; then with the introduction of advanced information and communication technologies they have become more intelligent and further enlarged to wider supra-national and global scales.
Three generations of territorial systems of innovation can be traced: (1) cluster-based, (2) regional / national systems, and (3) intelligent / global systems.
Observe,
watch,
evaluate
Acquire
existing
(state-of-the-
art) know-how
Invent /
create new
knowledge
Develop
knowledge
application
capability
Disseminate
new
knowledge
(embodied into new
products)
Knowledge interactions along the innovation process
4
1st Generation systems:Innovation clusters and technology districts
5
6
Explanations linking innovation and territory appeared in early 1980s in theliterature about industrial districts. The foundations of this paradigm canbe traced back to 1977, when Bagnasco and Becattini published theirstudies on the Third Italy, describing small cities and communities ofcentral Italy flourishing on the basis of innovative small company clustersbelonging to the same industry.
Michael Porter popularized the concept of industry clusters is his book TheCompetitive Advantage of Nations (1990). Porter recognized that themajority of economic activity takes place at the regional level and his ideasare commonly applied to cities and regions.Porter provides a simple definition of two types of clusters: verticalclusters, and horizontal clusters. Vertical clusters are made up of industriesthat are linked through buyer-seller relationships. Horizontal clustersinclude industries which might share a common market for the endproducts, use a common technology or labour force skills, or requiresimilar natural resources.
The basic concept of the cluster is a geographical concentration of industriesthat gain performance advantages through co-location and agglomerationeconomies, either of scale or scope.
1st generation systems of innovation Innovation clusters and technology districts
A group of the same or similar elements gathered or occurring closely together < <http://www.thefreedictionary.com/cluster>
Α group of small firms from similar industries that team up and act as one body <http://dictionary.bnet.com/definition/business+cluster.html>
A business cluster is a geographic concentration of interconnected businesses, suppliers, and associated institutions in a particular field. Clusters are considered to increase the productivity with which companies can compete, nationally and globally. In urban study, the term agglomeration is used.
This term industry cluster, also known as a business cluster, competitive cluster, or Porterian cluster, was introduced and the term cluster popularized by Michael Porter in The Competitive Advantage of Nations(1990). The importance of economic geography, or more correctly geographical economics, was also brought to attention by Paul Krugman in Geography and Trade (1991).<http://en.wikipedia.org/wiki/Business_cluster>
1st generation systems of innovation Clusters definition
7
Type A – Cohesive ClustersCohesive Clusters are the oldest type. The operational characteristics of these agglomerative economies were mentioned by Weber (1909) and Marshall (1925). Cohesive clusters are groups of firms which initially located together to reduce costs. They tended to specialize in industries such as fashion items, reproduction furniture, and printing. The main economic advantage has traditionally been described as the reduction of ‘transaction costs’ particularly transport costs.
Type B – New Industrial Districts New Industrial Districts tend be knowledge-based – that is they often have a high proportion of companies in high-tech sectors such as computing, Information Technology (IT) and micro-electronics. They rely extensively on R&D for the creation of new products. They tend to be located on the fringe of urban areas or even at some distance from them – examples include Silicon Valley in California and the M4 Motorway Corridor in Britain. Type B clusters are composed of a range of different size firms, from Trans-Nationals to SMEs. The large firms form, often, long-standing relations with their smaller suppliers and they work jointly on projects – in some cases with time horizons of decades.
Type C – Innovative MileuxThe description of the third type of cluster is largely based on the work of the group of researchers called GREMI which emphasized the importance of social capital and collective learning in promoting innovation. The Type C Clusters actively seek to promote innovation rather than simply rapidly responding to it and actively work together to promote common, medium and long-term innovative goals.
Type D – Proximity ClustersProximity clusters are so called because they are located in a relatively close spatial relationships with each other but do not form the kind of Local Production Network which the previous three clusters exhibited in different ways. They are not so much embedded in an area but weakly attached to it.
Source: D.A. Hart, Innovation clusters: key concepts, http://www.reading.ac.uk/LM/LM/fulltxt/0600.pdf8
1st generation systems of innovationInnovation clusters typology
9
Basic elements
Specialised firms / skilled workers
Buyers / catalysers
Structuring elements
Flexible combinations
Nontraded inputs
Technological spillovers
Buyers / catalysers
Specialised firms / Skilled workers
Flexible combinations
Technological spillovers Nontraded inputs
1st generation systems of innovationIndustrial districts in traditional sectors
10
The Silicon Valley patternFundamental processes sustaining innovation in the Valley are:
Basic research, knowledge generation and application capability of the kindnormally found centred on advanced private research or leading edge publicresearch laboratories.
Venture capital is crucial as the means by which ideas have been screenedand selected are given a chance to fly as commercial products or services.
Law firms are important as gatekeepers, advising firms on appropriateinvestors, counselors assisting entrepreneurs to access other services, andsources of contracts for many things ranging from recruitment to contractmanufacturing.
Specialist consultants in business and technological services ranging frommanagement accountants rather than simple auditing services, head huntingservices and specialist engineering, software and media, and regulatoryadvisers or property development services, including specialised publicprovision.
A local value chain of firms that can conduct, for example contractmanufacturing, design and fabrication, and various fairly prosaic supplies likelogistics, or exhibition organisation and specialised catering services.
Source: Cooke, P. (2003) ‘Economic globalisation and its future challenges for regional development , IJTM, V.26
1st generation systems of innovationTechnology districts in high tech sectors
11
Enterprise
SME
EEE
Enterprise
SME
Big Firms
Public Sector
National/Regional
Administration
Business
Consultants:
Services
Universities
Technology
Centres
Finance-
Banks
Valu
e C
hain
Clu
sters
Mento
ring S
chem
es...
Inno
vation
Sup
port
Sch
emes
Bus
ines
s In
nova
tion
Cen
tres
Innovation Management
Techniques
Technology Audits
Technology Foresights
Intermediaries
Clu
ster
Pol
icy…
Bus
ines
s For
ums
Seed C
apita
lventu
re C
apita
lB
usin
ess A
ngels
Technolo
gy T
ransfe
r
Pro
jects
R&
D V
alo
risatio
n
Graduate P
lacement
Schem
es
University-E
nterprise
Cooperation...
The Networked Economy
Lawson and Lorenz (1999) argue that the technological dynamism of districts is dependent on the firms within them, sharing two forms of cooperation: (1) the provision of collective goods and services such as training, education, R&D, and (2) sharing of certain norms of reciprocity such as information, subcontracting, refraining from wage competition. Reciprocity was identified as the key element of technological dynamism, reducing the risks associated with new product development and discouraging wage competition.
Source: Landabaso, 1999
1st generation systems of innovationInnovative milieu
12
Technological valorisation of property Spin-offs Tech Transfer Attraction of firms Tech Transfer New round of investment
(A) R&D Units
(C) Innovative Firms
(B) Technology Transfer
Organisations
Technology diffusion
(D) Space, Property, infrastructure
1st generation systems of innovationPlanned districts: Science and technology parks
The complexity of networks within the district makes ‘technology districts planning’ extremely complicated.
The nearest application of the district concept to urban and regional planning comes through science and technology parks.
About 400 cases in Europe
Four constituting elements: (a) land / infrastructure, (b) R&D institutes, (c) technology intermediary organisations, (d) innovative companies.
Four types of technology cooperation: joint R&D, technology transfer, spin-off creation, technology dissemination.
13
The innovation mechanism within the cluster / district is based on threefactors:
The concentration of many and diverse skills in the cluster or districtcovering various fields of knowledge and production. Even in cases wherethe whole cluster focuses on a single industrial sector, the multiplicity ofskills comes from specialisation in different stages of the productionprocess.
The cooperation networks between the members of the cluster.Cooperation produce innovation, as the later stems from the combinationof skills, knowledge, and qualities that are put together. A minimumnumber of cluster members is necessary to actualise spontaneousnetworking (i.e. 100 companies has been considered as the threshold forthe definition of a production complex as an industrial district).
The presence of “catalysts” that facilitate combinations among the manyand diverse skills and units. The function of the catalyst, at Prato, forexample, is ensured by the “impannatori”, who constantly re-organise theproductive processes of the district in relation to trade orders. VC functionsas catalyst also in high tech clusters. The central administration and liaisonoffices in the case of technology parks.
1st generation systems of innovation Cluster-based innovation mechanisms
2nd Generation systems: Regional systems of innovation
14
15
In 1990s, a radical shift from district theory took place. Three changes occurred:
From district theory to learning regions. The contribution of the District theory write Lawson and Lorenz (1999) was more in the area of understanding the territorial foundations of inter-firm cooperation than in understanding the contribution of territorial clustering to a firm’s capacity to learn and generate new knowledge.
From individual to organisational learning (OL): Individual learning refers to theacquisition of information, knowledge, understanding and skills, throughparticipation is some form of education, training, whether formal or informal.Organisational learning depends upon individual learning and builds upon. OLamplifies the knowledge created by individuals, by appropriating knowledge fromoutside or by creating new knowledge in interaction and collaboration to otherorganisations
From linear (within the Lab) to systemic (within the territory) innovation : A process hermetically sealed within the research lab of the large company has been transformed into a system that covers an entire city-region involving participants from the finance, the technological, and the production communities.
2nd generation innovation systemsAn institutional breakthrough
16
RESEARCH AND
TECHNOLOGICAL
DEVELOPMENT
Research institutes University research
R&D in large companies
Innovative SMEs
INNOVATION FINANCE
Venture capital funds
Technology incentives
Regional incentives and aids
Spin-offs / start-ups
NEW PRODUCT
DEVELOPMENT
Provision of
management, product,
market, and quality
services
Specialised centres
Business consultants
PROCESS
INNOVATION
Clusters and networks
Technology co-operation
Supply chains
Alliances
Distribution &
Promotion
TECHNOLOGY
TRANSFER
Co-operation between
universities and
companies
Technology brokerage
Licensing
R&D Innovation
Funding
Production
Re-toolingNew
Product
Development
Strategic
Company
Planning
Market
Research
Production
Runs
2nd generation innovation systemsAn institutional breakthrough
17
REGIONAL SYSTEM OF
INNOVATION
Innovation Financing
Banks, Business Angels,
Venture Capital, Regional
Incentives
Technology Transfer
Organisations
Tech Parks, Tech Networks,
Brokers, Consultants
Universities /
Research
Institutes
Public R&D
Laboratories
Private R&D
Departments
and Centres
Technological Information System
Patents, Standards, Technical
Publications, Emerging Markets,
Foresight
CLUSTERS
Group of companies in co-
operation
Vertical / Horizontal
The region is conceptualised as living organism with technology learning, management, selection, and knowledge development capabilities
Innovation is based on a system of clusters, R&D, tech transfer, and finance
The system includes (1) demand and supply institutions, (2) knowledge networks
Networks allocate ‘formal’ and ‘tacit’ knowledge and enable collaborative innovation
Institutions work as switches selecting (on) and rejecting (off) innovations
Priorities are on intangible infrastructure, skills, human capital, finance, cooperation and social capital.
2nd generation innovation systemsLearning regions / regional systems of innovation
18
2nd generation innovation systemsLearning regions / regional systems of innovation
19
The model denotes the “university-industry-government” relationships as a complex of interdependent institutional spheres, which overlap and complement each other along the process of innovation.
2nd generation innovation systemsTriple helix alliances
C
TT R&D
FU INT
R&D: Research and development; TT: Technology transfer; INT: Information intelligence; C: Companies (innovative) and Clusters; FU: Funding.
2nd generation innovation systemsPrecarious regional systems of innovation – Missing elements
20
21
In 1994, core concepts of the ‘learning region’ paradigm (collaborative networks, organisational learning, institutional agreements, social capital, political consensus) were adopted by the European Commission
A new family of policy schemes was introduced having a strategic view over technology and innovation at the regional level: Regional Innovation and Technology Transfer Infrastructures and Strategies (RITTS), Regional Technology Plans (RTP), Regional Innovation Strategies (RIS), and Programmes of Regional Innovative Actions (PRIA).
The objective is to create regional systems of innovation capable to sustain and facilitate innovation in small companies in manufacturing and services
2nd generation innovation systemsPolicy model: Regional Innovation Strategies
22
RIS principles are reflected in the policy’s methodology :
1. Raising awareness about innovation and building a regional consensus among key regional actors;
2. Analysis of the regional innovation system (its actors and their interaction), including technology and market trends assessment, technology foresight and benchmarking with other regions ;
3. Analysis of the strengths and weaknesses of regional firms: assessment of regional demand for innovation services, including technology audits (in SMEs in particular) and surveys regarding firms’ needs and capacities, including management, finance, technology, training, marketing, etc.;
4. Assessment of the regional innovation support infrastructures and policy schemes;
5. Definition of a strategic framework – including a detailed action plan and the establishment of a monitoring and evaluation system. The action plan may involve pilot actions and feasibility studies as well as concrete projects that might be financed under existing structural funds operational programmes.
2nd generation innovation systemsPolicy model: Regional Innovation Strategies
23
Strategic priorities to support
a regional system of innovation
Advance R&D
capability
Strengthen
technology
transfer
capability
Improve intra-
company
innovation
capability
Offer risk
and start-up
funds to
innovation
Advance
market and
technology
watch
2nd generation innovation systemsPolicy model: Regional Innovation Strategies
24
INNOVATION POLES In some countries (France, Italy) more
than one districts, clusters, and science parks were developed within the same urban system, creating larger innovation poles.
Innovation Poles rely on multi-cluster systems.
The emphasis is on clusters and networks. Networks of collaboration, communication and co-ordination ensure the cohesion and synergy among the individual poles.
Dev. Org. Univ. Labs
Res. Inst.
Tech Park
Cluster
ClusterMontpellier: An early multi-cluster concept in master plan of the city (1980’). Four clusters (Agrofood, Pharmaceutical, Media, Automation) + Housing + Leisure
2nd generation innovation systemsPolicy model: Innovation Poles / multicluster systems
3rd Generation: Intelligent / global innovation ecosystems
25
New trends in innovation Open innovation and rising Asia
Business R&D expenditure rose by 5.2% in North America, 2.3% in Europe, and 3.8% in Japan during 2000-05, but by 17% in India and China, and by 19.7% in Australia, Brazil, Singapore, South Korea,
and Taiwan combined. 26
New trendsInnovation offshoring
The majority of the new R&D centers to be created by MNCs will be located in India, China and Asian cities
Cisco has R&D facilities in Bangalore
Toyota in Thailand
Nokia operates nine satellite design studios located in India (Bangalore), China (Beijing), and Brazil
Source: United Nations (2005) UNCTAD Survey on the Internationalization of R&D
27
New trendsGlobalization of innovation clusters
28
Bangalore (India) one of the largest ΙΤ clusters (satellite platform).
Zhongguancun High Technology Development Zone (China), cluster in consumer electronicς.
Taiwan, Hsinchu Science Park, cluster leader in semiconductors.
Singapore, new clusters in disk drivers, multimedia, broadband technologies, financial services.
Korea, Teheran Valley near Seoul, a nucleus of national industry, clusters inbroadband technologies and mobile communications.
Malaysia, long term effort in semiconductors, electronics, and software: Multimedia Super Corridor, and cyber cities Cyberjaya, Purtajaya, Penang.
New trendsEmerging innovation clusters in China, India, Malaysia
29
New trendsGlobal online technology brokers
30
New trendsGlobal online science communities
31
Collaborative innovation environments based on community spaces, enable the involvement of population in innovation development: Creative communities
New trendsInnovation co-design with end-users / Crowdsourcing / Living Labs
32
New trendsGlobal online networks over innovation ecosystems
New trends (innovation offshoring / digital brokers) create a global virtual / organizational space over the local / regional system of innovation
Glocalisation of innovation: Local systems open to global cooperation, global networks in technology acquisition, global product development, global supply chains, product promotion
Intelligent cities enable local innovation systems to integrate global networks and advance people-led innovation
Innovation System
33
34
R&D
NET
TT
FIN
PD
Innovation ecosystem Physical Space
Innovation ecosystem Virtual Space
All these trends (global innovation supply chains, open innovation, Crowdsourcing, web-based innovation) create a new innovation spatiality, linking territorial systems of innovation to the web, online knowledge management tool, and digital cooperation / communication spaces.
Key processes:Dematerialisation of infrastructureOnline learning and technology
managementVirtual technology co-operation and
exchangeVirtual communitiesDigital promotion of innovationTechnology transfer as communication
Intelligent cities and regions are territories combining strong innovation systems with IT infrastructure and digital innovation services
3rd generation systems of innovationIntelligent cities and regions
35
Advantages Weaknesses
Clusters/
Technology districts
• Direct participation of companies
• Well known and wide spread concept
• Planning barriers
• High development costs
• Innovation through infrastructure ?
Learning regions /
Regional systems of innovation
• Wider system of reference
• Participation of R&D institutions
• Emphasis on institutions
•Public policy support
• Need for high institutional thickness
• Strong public-private partnership
•Sustainability after the public support period
Physical – virtual environments of innovation /
Intelligent cities
• Low development cost
• Easy access
• Global communication and networks
• Involvement of people
• Digital gap
• IT literacy
• Complex environments
• Need for simultaneous physical / digital interaction
Territorial systems of innovation: Continuous enlargementAdvantages and weaknesses
36
More:
Komninos, N. (2002) Intelligent Cities: Innovation, knowledge systems and digital spaces, London and New York, Taylor and Francis (Part 1 and 2)
Komninos, N. (2008) Intelligent Cities and Globalisation of Innovation Networks, London and New York, Routledge (Chapters 3 and 4)
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