National Systems of Innovation and Entrepreneurship: In Search of a Missing Link

The literature on national systems of innovation (NIS) has neglected the issue of entrepreneurship because of several incompatibilities between the two notions. The Schumpeterian legacy, the current person-centric view of entrepreneurship, and methodological problems related to treating entrepreneurship at the macro-level, have made it difficult to integrate entrepreneurship into the NIS perspective. At national level it is more appropriate to treat entrepreneurship as a 'property' (dimension) of NIS. In order to link NIS and entrepreneurship we must establish a common conceptual basis. Our argument is that the functional view of NIS and entrepreneurship presents a common basis for such an approach. We develop criteria for the entrepreneurial NIS which we define as being those that can change balance between individual and cooperative entrepreneurship; that enhance both the opportunity and skill aspects of entrepreneurship; and that can balance generation of uncertainty with support to business models and other organisations which pool uncertainty. From the NIS perspective, we explain entrepreneurship as a systemic phenomenon driven by complementarities between technological, market and institutional opportunities. This framework builds on three research traditions in the entrepreneurship/NIS literature (Schumpeterian, Kirznerian and Listian) which jointly form a multi-level, multi-dimensional framework for understanding entrepreneurship from a NIS perspective. This framework could be useful as a heuristic for empirical research on entrepreneurship. Finally, we analyse policies for entrepreneurship and find that they are highly dependent on underlying and previously discussed conceptions of entrepreneurship

Research and Development and Competitiveness in South Eastern Europe: Asset or Liability for EU Integration?

This paper explores the relationship between research and development (R&D) and competitiveness of the SEE economies from the perspective of the EU integration and the EU as a knowledge based economy. Specifically, the paper addresses the question of whether SEE is a potential asset or a liability in this process. SEE countries are quite diverse in terms of levels of competitiveness, with visible effects on the role of R&D which is confirmed by analysis of the demand and supply factors of R&D. Although tentative, results show that innovation policy that takes account of the supply and demand side factors of R&D is essential to knowledge based growth in the SEE economies. This poses some limits to traditionally defined S&T policy as a sectoral activity and calls for new approaches, which are discussed in the paper

Defining systems of innovation: a methodological discussion

Current definitions of systems of innovation (SI) which define SI in institutional terms only, do not resolve difficulties encountered when conceptualizing this notion. This paper develops a conceptual framework for a more structured understanding of SI based on four building blocks: technological regime, institutional set-up, market, and pre-market selection environments. SI can then be defined as the co-evolution of technological regimes and institutional set-up molded by the mechanisms of market and pre-market selection. (C) 1998 Elsevier Science Ltd. Air rights reserved

Divergence or Convergence in Research and Development and Innovation Between ‘East’ and ‘West’?

Book description: Research suggests that innovation and technological change are crucial for the economic recovery of the former centrally planned countries in Central and Eastern Europe. This book analyses the development of innovation systems and technology policy in this region from various perspectives, demonstrating not only its importance but also its complexity

European integration and complementarities driven network alignment: the case of ABB in Central and Eastern Europe

The depth of industry integration between European ‘West’ and ‘East’ depends on the simultaneous existence of several factors, which, through mutual complementarities, align global and local networks. This paper takes the case of Asea Brown Bowery (ABB), one of the first large investors in central and eastern Europe (CEE), to show that the successful penetration of this company into CEE was the result of the simultaneous occurrence of several factors, which had mutually reinforcing complementarities. Changes in the strategy of ABB towards knowledge-based services may be weakening these complementarities and dis-aligning local and global networks in CEE. By integrating the insights of Milgrom and Roberts (1995) on complementarities the paper further develops the ‘network alignment’ perspective (Kim and von Tunzelmann, 1998) on growth

Pan-European industrial networks as factor of convergence or divergence within Europe

Book description: European integration can no longer be understood as a west European experiment mainly focused on functional and economic policy cooperation. The issues addressed include security and defence, as well as core concerns of European society. This volume explores three interlocking dimensions of integration; functional, territorial, and affiliational. Each dimension influences how countries across the continent engage with European integration. This first volume in the One Europe or Several? series identifies the agenda of a research programme, funded by the British Economic and Social Research Council

Growth, Integration and Spillovers in the Central and East European Software Industry

This paper explores growth and competitive advantage in CEE software firms; it looks at the role of strategic partnerships and industry (spillover) effects. The empirical analysis is based on survey data from 224 software firms from six CEE countries (Bulgaria, Czech R, Estonia, Serbia, Slovenia, Romania). The results of the descriptive analysis are interpreted from the perspective of the role of capabilities in industrial development. The analysis shows that the patterns of growth are a mix of sector, region and sub--region specific determinants and show important national differences. This suggests that the CEE software industry cannot be considered as a homogenous phenomenon. There is no general tendency towards an expansion in exports; based on our sample only Romania is developing an export oriented software industry. Research shows that the CEE software industry is populated by young, dedicated, domestic firms, which are independent, and privately owned and which are mainly oriented towards localisation of software. They are strongly dependent for trade and production on alliances and strategic partnerships with foreign partners and a small share of technology based partnerships. There is an extensive process of industry upgrading underway, involving country and sub-region specific changes. The spillover effects are significant, through links with clients and intensive intra-industry knowledge transfer through high employment turnover and potentially high knowledge transfer from foreign to local projects. Differences between central and eastern Europe are strong in terms of degree of diversification of software supply, industrial upgrading and quality of demand. The pattern of software development in CEE differs from that in other emerging markets in the sense that it is domestic market oriented, but with an emerging export market for services. Its further growth and upgrading will be strongly dependent on the acquisition of organisational capabilities by local firms

La industria electronica en los paises de Europe central y oriental: una nueva localizacion de la production global (The electronics industry in Central and Eastern Europe: a new global) production location)

Central and Eastern Europe (CEE) has emerged as a new global location in electronics industry. The paper analyses (i) which factors explain the emergence of CEE as global production location in electronics, and (ii) what management and policy lessons we can draw from the success of CEE electronics. Integration this industry has been driven by foreign direct investments and global production networks. Hungary has moved the furthest along this path, positioning itself as a major low-cost supply base in the region. Hungary, together with Czech R and Poland form the first tier of CEE countries with other countries being the emerging second tier in electronics industry. A remarkable success of central Europe in this sector rests on still slim foundations as further growth is far from ensured due to weaknesses in national innovation systems. This calls for industry specific innovation policy whose elements are analysed

The issues of enterprise growth in transition and post-transition period: the case of Polish 'Elektrim'

Case study of Polish company Elektrim illustrates the changing basis of growth of enterprises between the transition and post-transition periods. Elektrim grew primarily through conglomeration in the transition period. After the exhaustion of this mode of growth Elektrim has started to focus on a few core areas (telecoms, cables, energy). The strategic shift to telecommunications has been based on partnerships with foreign firms and it is likely that this will be the pattern in other areas. In this respect, the case of Elektrim shows the importance of internationalisation for the growth of enterprises in CEE. Based on the case study the paper draws several analytical issues: First, Elektrim's shift from conglomeration to focusing suggests that the institutional context, which drives firm strategy in post-socialist economies like Poland, is, perhaps, also changing. Second, in order to grow Elektrim is forced to enter into equity relationships and partnerships like with French Vivendi. This suggests that the possibilities for firm growth in post-socialist economies, like Poland, through generic expansion are still fewer when compared to growth based on mergers & acquisitions or different forms of alliances. Third, Elektrim's relationship with government is complex and refutes the simplified dichotomy of markets vs. governments. This raises the issue of to what extent post-socialist governments operate as a 'compensatory mechanism' on which firms like Elektrim can rely to grow. Fourth, the opening of the CEECs has led to relocations of EU and other MNCs into this region with the result that they are also transferring the oligopolistic competition from EU into new markets. The case of Elektrim shows how CEE companies and goverment regulations become factors in the oligopolistic competition between big EU companies. CEE companies and governments may use this competition to their advantage but also their limited bargaining powers may lead to outcomes unfavourable to them