Innovation Policies for Small and Medium Size Enterprises in Asia: An Innovation Systems Perspective

The point of departure for this chapter is that in developing countries SMEs2 are responsible for the largest part of employment and a significant share of added value. And that innovation policy supporting the particularities of SMEs has been widely ignored (occasionally SMEs have even been discriminated). This chapter aims at shedding soe light on the immensely complicated issue of innovation policy for SMEs in developing countries, or more specifically Asian SMEs. The chapter applies the so-called regional innovation systems approach. In this paper, we analyze four clusters of SMEs that have been especially successful in entering the global market; special attention is paid to the so-called soft infrastructure, the industry specific needs for cluster (e.g. interaction) and RIS dynamics/polices (e.g. needs for devolution; industry specific needs for building knowledge creating institutions).The chapter is structured as follows. After introducing stylized facts on SMEs innovative performance attention is turned to the theoretical framework. Taking into account the localized nature of SMEs economic activity, our level of analysis is the regional system of innovation (RIS). We provide a general introduction, contextualize this to Asian situation, and introduce the industry differences (inspired by Pietrobelli and Rabelotti’s typology). Then we turn to the empirical section where special attention is paid to the four cases. Finally, we turn to drawing general conclusions on innovation policies and need for restructuring of Asian innovation systems (the accent is on the former).Innovation Policy; Developing countries; Innovation systems

From theory to practice: the use of systems of innovation approach in innovation policy

The main objective of this chapter is to discuss the implications of the adoption of the Systems of Innovation (SI) Approach in innovation policymaking. One of the main criticisms of the SI approach is the difficulty in translating it into real policymaking. This paper proposes a way of dealing with this complex problem. By breaking down the operation of the SI into ‘activities,’ the role of the government and the interplay between private and public actors can be discussed, and specific recommendations on how and when public actors should intervene can be made. The authors propose ten activities that capture the operation of an innovation system. The role of the public sector in each activity is then discussed, and a new research agenda is proposed.innovation systems; innovation policy

From new to the firm to new to the world. Effect of geographical proximity and technological capabilities on the degree of novelty in emerging economies

This paper investigates empirically what it takes for a firm to move from new to the firm to new to the domestic market and new to the world innovations. More specifically, the paper analyses the relationship between, on the one hand, the degree of novelty of product innovation and on the other hand the accumulation of technological capabilities at firm level as well as the geographical spread of the innovation activities of the firm. The analysis is based on a unique firm level data collected in Pune(India) and Beijing (China) in 2008. The paper shows that the role of the region supporting the move from new to the firm to new to the world is limited. In order to achieve a higher degree of innovation global networks are more important than local networks.degree of novelty; technological capabilities; technological sourcing; research collaboration; region

Innovation System Policies in Less Successful Developing countries: The case of Thailand

The issue of the rationale for public intervention under the systems of innovation perspective has recently received an increasing attention among scholars and practitioners. However, with few exceptions, this literature has been based on the analysis of innovation policies and innovation systems in the industrialized countries neglecting almost completely the specific policy dilemmas arising from weak and fragmented innovation systems that characterize developing countries. In the last few years, a growing number of developing countries have adopted the system of innovation approach officially in their innovation policy. Yet, there has not been an adequate attempt to systematically analyze how (and if) this has been done in practice. This paper attempts to shed some light on this issue by analyzing the innovation policy of Thailand. The paper suggests that while innovation system approach might have been officially adopted by a government, the practice follows old innovation paradigms and hardly addresses the profound systemic problems of the Thai innovation system.Keywords: innovation policies; systems of innovation approach; less successful developing countries; public intervention; Thailand.

Do regions make a difference? Exploring the role of different regional innovation systems in global innovation networks in the ICT industry

The access to global innovation networks (GINs) has been extremely unequal across regions around the globe. While certain regions are considered knowledge hubs, able to link to global knowledge flow, other still remain marginalized, pointing out to the role of regional innovation systems in the emergence and development of GINs. Using firm-level data collected through a survey and case studies in 2009-2010, this article systematically compares the patterns of global networks in the ICT industry in a selection of European and non-European regions. Contrary to what we expected, the results show that GINs may emerge in regions which are neither too innovative nor institutionally thick (like Tier 1) nor too thin (like Tier 3).globalization; innovation networks; regions; Europe; India China

Different competences, different modes in the globalization of innovation?. A comparative study of the Pune and Beijing regions

Since the seminal work of Archibugi and Michie (1995) on the globalization of innovation, several authors have tried to understand the complex relationship between innovation and internationalization, mainly using firm or sectoral level data. However, most of them tend to focus on just one form of globalization of innovation – exploitation of technology, research collaboration or offshoring of R&D – and often One traditional indicator of innovation, like patents or R&D investments, thus ignoring the complexity of the phenomenon. Furthermore, little attention has been paid to the interplay of the micro characteristics of firms, the region in which they are embedded and different forms of globalization of innovation. Our paper is based on three distinct modes of globalization of innovation: global exploitation of innovation, global sourcing of technology and global research collaboration, thus adapting Archibugi and Michie’s taxonomy to a developing country context. We then use this taxonomy to explore empirically the linkages of firm-level competences, the nature of the international activities and the region in which the firms are located: Pune in India and Beijing in China. We use primary data on the two regions to show that the Pune region is specialized in the three types of globalization of innovation, and in particular in the exploitation of innovation more than Beijing. A deeper analysis of the micro characteristics of the firms shows that the three modes of globalization of innovation are associated to different competences. Firms with technological and organizational competences show a higher propensity to develop international linkages, while firms with a high level of educated human resources seems to focus more on the domestic market.globalization; innovation; regions; competences; China; India

Globalisation of Knowledge Production and Regional Innovation Policy: Supporting Specialized Hubs in the Bangalore Software Industry

This paper is concerned with the changing role of regional innovation systems and regional policies in supporting the transition of indigenous firms in developing countries from competing on low costs towards becoming knowledge providers in global value chains. Special attention is paid to policies supporting the emergence and development of the regional innovation system in this transition process. Regional innovation systems in developing countries have very recently started to be conceptualised as specialized hubs in global innovation and production networks (Asheim, B., Coenen, L., Vang-Lauridsen, J.,2007. Face to- face, buzz and knowledge bases: socio-spatial implications for learning,innovation and innovation policy. Environment and Planning C: Government and Policy 25(5), 655–670; Chaminade, C., Vang, J., 2006a. Innovation policy for small andmedium size SMEs in Asia: an innovation systems perspective. In:Yeung, H. (Ed.), Handbook of Research on Asian Business. Edward Elgar, Cheltenham; Maggi, C., 2007. The salmon farming and processing cluster in Southern Chile. In: Pietrobello, C., Rabellotti, R. (Eds.), Upgrading and Governance in Clusters and Value Chains in Latin America. Harvard University Press). A specialized hub refers to a node in a global value chain that mainly undertakes one or a few of the activities required for the production and development of a given good or service or serves a particular segment of the global market. In global value chains, firms in developing countries have traditionally been responsible for the lowest added-value activities. However, a few emerging regional innovation systems in developing countries are beginning to challenge this scenario by rapidly upgrading in the value chain. There is, however, still only a poorly developed understanding of how the system of innovation emerges and evolves to support this transition process and what the role of regional innovation policy is in building the regional conditions that support indigenous small and medium size enterprises (SMEs) in this transition process. This paper aims at reducing this omission by analyzing the co-evolution of the strategies of indigenous SMEs and the regional innovation system of Bangalore (India).Regional innovation systems; Evolution; Globalization of innovation; Software industry; Bangalore

Transformative paths, multi-scalarity of knowledge bases and Industry 4.0

This chapter discusses the role of combinatorial knowledge and its multi- scalarity in shaping the transformation paths of local productive systems (LPSs) that are affected by the gales of contemporary technological change. Specifically, we look at how access to – and the combination of – different knowledge bases at different territorial scales (local/ regional, national, international/ global) can support different paths of industrial upgrading for LPSs in the face of the challenges posed by Industry 4.0 (I4.0)

Technology-Driven FDI by Emerging Multinationals in Europe

The article is aimed at understanding the dynamics and consequences of technology-driven foreign direct investments, undertaken predominantly with the aim of accessing and learning to master technologies by Emerging Market Multinational Enterprises (EMNEs) in Europe, with a particular focus on India and China. The results are grounded on a database, which contains all the investment deals by EMNEs in the EU between 2003 and 2011. It shows that agglomeration economies play a key role in attracting investments from emerging economies, which tend to concentrate in areas with a massive presence of firms in the same industries