innovation

Report
Why is Oslo not Innovative? A
Review of the Constraints &
Challenges
PD Phil Cooke, Director, Centre for Advanced
Studies, Cardiff University; Development
Studies, Aalborg University; & Management
School, University of Florence
Competitiveness 2009-10
Sources: WEF Global Competitiveness Report, 2010-2011 and
IMD World Competitiveness Yearbook 2011
Ranking
Switzerland
Sweden
Singapore
USA
Germany
Japan
Finland
Netherlands
Denmark
Canada
Hong Kong
Ukraine
Taiwan
Norway
France
Australia
WEF Competitiveness
2010
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
WEF Competitiveness
2009
1
2
3
4
5
7
6
8
9
10
11
13
12
14
15
16
IMD Competitiveness
2010
5
4
3
1
10
26
15
14
12
7
1
57
6
13
29
9
European Innovation Performance
Source: Innovation Union Scoreboard (IUS) 2010 (SII Summary Innovation Index)
Sweden
Denmark
Finland
Germany
UK
Belgium
Austria
Netherlands
Ireland
France
EU
Iceland
Slovenia
Estonia
NORWAY
Portugal
Italy
Czechia
Spain
Greece
Hungary
Croatia
75
73
70
68
65
63
59
58
57
54
52
49
48
47
46
44
43
42
39
37
34
30
European Union Innovation
Scoreboard
Source: The 2007 Summary Innovation Index (SII)
EU Interpretation of Innovation
Groupings
• Estonia, Australia, Norway, Czech Republic,
Slovenia, Italy, Cyprus and Spain are the moderate innovators
with SII scores below that of the EU27.
• Sweden, Switzerland, Finland, Israel, Denmark, Japan,
Germany, the UK and the US are the innovation leaders, with
SII scores well above that of the EU27 and most other
countries. Sweden has the highest SII of all countries, but its
leading position is mostly based on strong inputs.
• Luxembourg, Iceland, Ireland, Austria, the Netherlands,
France, Belgium and Canada are the innovation followers,
Technology Intensity in Total Value
Added by Source
Source: OECD
Technology Intensity
• This means that countries are ranked according to
total business technology intensity
• Table shows that the share of own R&D activity of
business enterprises is about one-half of the total
business R&D content in countries with a
relatively high level of GDP per capita
• It is below this share in countries with lower level
of income.
Norway’s GDP to Innovation is a low
Ratio
• The ration of GDP level to innovation
performance is moderate
• For unclear reasons high GDP is not translated
into high innovation
• This can have three sources:
– Low investment of high GDP by business in innovation
– Low government investment in innovation
– Low production of innovation by other institutions
e.g. universities
• On investigation of the input-output ratio of
Norwegian effort seems to give poor returns
• All countries spend more on inputs than they get
back in innovation outputs,
• However, Norway gets a bit less than half the
investment in innovation returns
• Other countries, nearer the top of the
performance range e.g. Switzerland and
Germany, get more innovation input for output
Selected European Knowledge
Economy Disparities
Region
>40% Knowledge Economy
Region <40% Knowledge Economy
EU Position
Stockholm (S)
London (UK)
Gothenburg (S)
Gilf’d-Bri’t’n (UK)
Bergen (NO)
Oslo (NO)
Trondheim (NO)
Helsinki (Fi)
Paris (Fr)
Stavanger (NO)
Utrecht (NL)
Denmark (DK)
Edinburgh (UK)
Wales (UK)
Dublin(IR)
58.65
57.73
53.70
53.17
52.42
52.23
52.10
51.50
50.17
48.76
47.49
47.46
47.05
43.39
40.18
(1)
(2)
(3)
(4)
(6)
(7)
(9)
(14)
(15)
(22)
(29)
(30)
(33)
(59)
(89)
EU Position
Gelderland (NL)
Düsseldorf (G)
Väli-Suomi (Fi)
Hannover (G)
N.E. Scotland (UK)
Namur (BE)
Lombardia (I)
Liguria (I)
N. Ireland (UK)
Pais Vasco (E)
Emilia-Romagna (I)
H. & Islands (UK)
Cataluña (E)
Navarre (Sp)
Aegean Islands (Gr)
39.99
39.37
39.10
38.27
38.09
37.70
37.55
37.35
37.31
36.30
35.22
34.45
33.48
32.06
12.70
(91)
(104)
(105)
(109)
(110)
(112)
(114)
(115)
(116)
(119)
(130)
(136)
(141)
(149)
(192)
Source: Cooke & De Laurentis (2002) EU Knowledge Economy Index, Cardiff, Centre
for Advanced Studies
Interpreting Knowledge Economy
Indicators
• Knowledge –intensive business services plus high
tech manufacturing
• Oslo and Norway’s other main cities have very high
KIBS ratios
• All cities and regions have much smaller HTM than
KIBS
• KIBS are not occupations but sectoral employment,
(e.g. banking, administration,
management, consultants)
• Many such posts are routine rather than ‘innovative’
Oslo’s Innovation Advantages and
Challenges
• Karlsson 2001, Isaksen, 2003 and Aslesen 2007 found
Oslo to be competitive, export-minded and innovative
in software engineering
• In software, Oslo was more export and innovationminded than Stavanger or Trondheim
• Characteristic of Oslo software were some university
Internet start-ups, venture capital and consultancies
selling services to larger Oslo firms
• Oslo had no greater intensity in R&D investment than
some medium cities on turnover from exports and
percentage of turnover invested in innovation
Oslo’s Challenge
• Could it be that Oslo’s innovators occupy
‘bloody red water’ of high competition for low
margins?
• We know Oslo suffers from high overhead
costs, so can enjoy only limited innovation
margins except in very high value-added
activity
• Notice the ‘smiling curve’ of added value in
the following slide
The ‘smiling curve’ of added value in ICT Global
Innovation Networks (GINs)
Synthetic
Design
Symbolic Design
Contract
Manufacturing
Electronic
Contract
Manufacturing
Original Design
Manufacturing
Flagship Marketers,
Apple, Google
‘Android’, Silicon
Valley, Taiwan,
Seoul, South Korea,
Cambridge
TIS, ARM, CSR
Chip Design
Value
‘Apps’ Design,
Silicon Valley,
‘Silicon
Roundabout’,
Toronto, Malmö
Original Design
Manufacture
TIS Mediatek,
Taiwan
Contract Manufacturing Platform, ‘World
Factory’, Shenzhen, Dongguan, Shanghai
Electronic Contract manufacturing,
Guangdong
GIN-TIS
Flagship
Markets
How did the ‘smiling curve’ happen?
• Chipset Design &
Advanced GIN Logistics
• Territorial Innovation
Systems In ICT GIN
Agent: e.g. ‘Apps’ UX-UI,
LBS @ TAT, Polar Rose &
Malmö, Ottawa, Silicon
Valley Platforms
PPlatformsPlatformsPlatf
orms
Principal: e.g. Apple,
SonyEricsson, HP, Nokia
Agent: e.g. Advanced
Embedded Software &
Systems @ ARM, Autonomy
CSR, & Cambridge Platform
Agent: e.g. ‘World Factory’ Contract
Manufacturing Platform @ Foxconn,
Celestica, Sanmina, Flextronics &
Shenzen, Dongguan platforms
Sub-Agents: ODM (Original Design
Manufacturers) e.g. Compal, Arima,
Hong Hai @ Taiwan
Sub-Agents: EMS (Electronic
Contract Manufacturing), e.g.
PCBs, Cables, PC Parts, Metals
Västra Götaland region’s ‘Iconic Projects’
resilience to ‘eco’ and ‘healthcare’ shocks
Tunnel Infrastructure
Visioning
Sustainable
City
Recycling
Renewable
Fuels
Forest
Plastics
Greenshipping
Health Imaging
Green Procurement
Medtech
GU/CH
Research
Goteborg
BIO
Green Logistics
Auto
Safety
Medtech
Environment
Recycling
Digital
Signals
Processing
Biodiagnostics
ICT
Healthcare
Petroleum
& Health
Smart
Textiles
Pharma
Complex Systems: What’s Going On?
• Regional Innovation Systems are helping firms
find innovative partners outside their sector
• Innovative firms are seeking ‘relatedness’ from
‘strange attractors’
• Policy ‘emergence’ from below up to the global
(Gothenburg model of Lisbon Agenda)
• Innovation by Cross-pollination
• Inkjet printer now used in Clothing, Ceramics, and
Shoes clusters/industries
Discussion & Conclusions
• Norway is wealthy in narrowly specialised
fields
• These are related, too, but are big and
independent, oil, offshore engineering,
shipping, energy
• Innovation comes from ‘recombination of
knowledge’ (Schumpeter)
• Innovator city-regions are ‘thinking laterally’
not only ‘vertically’

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