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Innovation ecosystems as drivers of regional innovation - validating the ecosystem


Written by Meirion Thomas

Reviewed by David Walburn

 

The concept

Step in the RIS process

What can be expected?

How to implement it?

Quotes

References

Expert's comments

 

The concept


The concept of the innovation ecosystem has begun to attract attention as a framework for policy makers only in recent years[1],[2]

Innovation ecosystem is the term used to describe the large number and diverse nature of participants and resources that are necessary for innovation.  These include “entrepreneurs, investors, researchers, university faculty, venture capitalists as well as business development and other technical service providers such as accountants, designers, contract manufacturers and providers of skills training and professional development[3].

The principles that underpin the role and value of interactions and relationships within the innovation ecosystem can be depicted as follows[4]:

While traditional innovation system analysis focuses on the innovation investments and (infra)structures that support and develop innovation activity in geographic or sectoral settings – Structural Capital; by broadening attention to the innovation ecosystem, more intangible, qualitative and subtle but important interactions and relationships that affect innovation – Human and Relational Capital - can be isolated, identified and understood.

A recent benchmarking analysis of international science and innovation system prepared for the UK Government notes that “Science and innovation systems are complex and made up of a large number of complementary elements; their effectiveness is crucially determined by how well the elements interact within and respond to the demands of the broader economic and societal system.”[5]

This is a point also picked up by the European Commission's 2012 Policy Communication on the European Research Area which noted that a lack of effective collaboration or strong mutually beneficial relationships between public sector research performers and private sector commercial companies is a weakness within the ERA[6].

 

Step in the RIS process


Analysis of the Innovation Ecosystem as part of the RIS3 process will be particularly relevant to Steps 1 and 2 of the RIS3 -   Analysis of the regional context and potential for innovation, and, Governance: Ensuring participation and ownership.

In Step 1 - Analysis of the regional context and potential for innovation – a mapping of the region’s innovation ecosystem will illuminate the understanding of the competitive advantage of a region and, in particular, the role, workings and collaborations of the local knowledge base and its ability to interact and collaborate effectively to support innovations and commercialisation of research.

In Step 2 – Governance – the RIS3 process can be enhanced by deployment of the innovation ecosystem concept, where the participation of the key actors, their working relationships and their contributions to and ownership of the innovation culture of the region can be defined and understood.

The use of the innovation ecosystem concept will also ensure that, in Step 5 - Definition of coherent policy mix, roadmaps and action plan– the range of actors that need to be engaged in implementation of the action plan and the subtleties of their relationships can all be taken into account as a result of the innovation ecosystem mapping.

In all Steps of a RIS3, the broad description of the regional actors that is implicit in the innovation ecosystem concept to include public authorities, universities and other knowledge-based institutions, investors and enterprises, civil society actors, and external experts will enhance the effectiveness of the benchmarking and peer review processes.

 

What can be expected?


Successful innovation systems are typically characterised by an active knowledge economy, comprising academic, public sector and business R&D and innovation activities with effective commercialisation and all supported by flexible public policy mechanisms. Additionally, successful innovation ecosystems also need a culture of innovation based on interaction, and openness to international opportunities and change.

An effective innovation ecosystem therefore enables entrepreneurs, companies, universities, research organisations, investors and government agencies to interact effectively to maximise the economic impact and potential of their research and innovation.

Thinking about the innovation ecosystem in this way suggests some important features that lie at the heart of why and how the innovation ecosystem is a useful focus for a RIS3.

  • Firstly, an ecosystem is dynamic and flexible, allowing new entrants to become part of the ecosystem with minimal entry barriers while allowing parts of the ecosystem to fade and leave active involvement.
  • Secondly, an ecosystem is an open system with no respect for jurisdictional boundaries or geographies.
  • Thirdly, an ecosystem is not concerned with its structures but is rather focused on the range and quality of interactions within and between the structures in the ecosystem.

The degree of flexibility and dynamism; the openness of the ecosystem and the extent and quality of its interactions and relationships will provide important evidence of the health of the innovation ecosystem and the contribution that the innovation ecosystem can potentially make to the region and its innovation performance.

These characteristics provide an appropriate framework for analysis or mapping of the innovation ecosystem.

 

How to implement an innovation ecosystem project?


To help understand the innovation ecosystem it is useful to identify the key stakeholders, participants and contributors within the innovation ecosystem. This will help to focus later discussion around the interactions and relationships at play within the ecosystem and, crucially, the engagement and interaction of innovative companies in the innovation ecosystem.

The OECD notes that one of the key success factors for strong regional partnership is the presence of regional facilitators who act as gatekeepers between different networks. They point to some OECD countries where closer co-operation has been encouraged between universities and other institutions in the region in order to facilitate the formation of critical mass for economic growth

A number of important caveats are needed however; firstly, no mapping of this sort can ever be comprehensive or fully accurate and secondly, mapping the innovation ecosystem in this way should not obscure the important fact that at the core of any innovation ecosystem are companies, people and relationships and not organisations or investments.

Figure 1 describes the innovation ecosystem picture that emerged from an earlier exercise (2011) undertaken by the authors for Northern Ireland in the UK:

Developing this map will allow the type and extent of relationships, interactions and collaborations to be effectively understood and analysed.

 

The majority of the organisations that were mapped in the Northern Irish innovation ecosystem were, on closer investigation, multi-function organisations whose contribution to, and impact on, the innovation ecosystem was achieved as a ‘by-product’ of their main functions and responsibilities rather than as the prime task.

Identifying this feature was important in later informing the development of the roadmap and action plan for innovation and commercialisation of research in Northern Ireland since it strongly suggested that further ‘bridge building’ and ‘spaces’ for innovation collaboration would be needed to encourage actors to fully engage and contribute to the innovation ecosystem.

 

Quotes


  •  “Ecosystems are complex systems that contain a few large players and lots of small players.” by Enquist, Brown and West Nature 395 (1998)
  • "Besides assembling the actors who will contribute to the innovation ecosystem, a healthy ecosystem also provides a mechanism for building relationships and other intangibles between the actors and entities." by Deborah Jackson, Arlington, Virginia (2011)

 

References


  • Adams, M. and Olesak, M. (2010) ‘Innovation ecosystems: built from the bottom up I-Capital Advisors, Washington DC
  • European Commission (2012) ‘Communication on the European Research Area’ http://ec.europa.eu/research/era/era_communication_en.htm
  • Jackson, DJ. (2011) ‘What is an Innovation Ecosystem?’ National Science Foundation, Arlington, VA
  • Massachusetts Technology Collaborative (2014) http://www.masstech.org/innovation-ecosystem
  • UK Department for Business Innovation and Skills (2011) ‘Innovation and research strategy for growth’
  • UK Department of Business Innovation and Skills (2014) “Insights from international benchmarking of the UK science and innovation system” BIS Analysis Paper 03, January 2014, https://www.gov.uk/government/publications/science-and-innovation-system-international-benchmarking

 

Mr Meirion Thomas


Meirion ThomasMeirion Thomas has over 30 years experience in economic development and SMEs where his expertise covers a range of interests including innovation, knowledge transfer, social enterprise, venture capital, and sustainable development. After holding senior positions in the Welsh Development Agency and Cardiff University, Meirion also established and became a director and partner in CM International Group, a strategic innovation and management consultancy with offices in Paris, Lille and Cardiff.

Since 1990 Meirion has led a wide range of innovation and economic development assignments and projects across Europe, North America and Southern Africa and in recent years he has also acted as a Director of Finance Wales plc and Chairman of the Cardiff-based specialist advisory group, the Cultural Enterprise Service Ltd.

m.thomas@cm-intl.com

 

Expert's comments


The use of metaphor in describing scenarios for the application of public policy is usually intended to crystallise meaning in circumstances where a detailed description might not convey a concept with clarity. It does not always work. The overuse of metaphor can degenerate into jargon which can just as effectively obscure meaning as clarify it. We are swamped with “roadmaps” when a simple “plan” would be sufficient. The use of “ecosystem” in this particular circumstance though, is highly appropriate, being drawn from “ecology”, defined by the Concise Oxford Dictionary as a “branch of biology dealing with living organisms’ habits, modes of life, and relations to their surroundings”. The innovation ecosystem refers to all the organisations which interact with each other to produce some given level of innovation in an economy and the relation of that complex to the influences which surround it. For practical purposes here, public policy to boost the scale and quality of innovation could form part of those surroundings. The analysis of the ecosystem as set out in the paper could be the preliminary to developing a strategy and specific programmes to improve innovation performance.

All ecosystems are dynamic and subject to change depending on the behaviour of the organisms within and the external factors which influence them. As the paper rightly points out, the mapping of an ecosystem can never be comprehensive or fully accurate, and as a tool in developing policy, accuracy is not the point. As the paper again points out in its description of the mapping of the innovation ecosystem, it is the understanding of the dynamics of the system which is key.

Effective programmes of public policy in economic development – or indeed in any other area of government – depend on understanding. This means research and preparation. Too often in economic development, policy is made hastily on the basis of what may be described as common sense or gut feel, or taken from other jurisdictions without an understanding of what may be the different dynamics there. Any approach which encourages policy-makers to deepen their understanding of their region and the practicalities of what they are trying to achieve has the potential to be of great value.

One would simply make a plea that “ecosystem” should not become the word of choice to describe any situation where organisations interact with each other. That would be another case of jargon obscuring communication.

 

Mr David Walburn


After a career in business David Walburn joined Greater London Enterprise in 1986 where he was responsible for venture capital and other small business support, before becoming Chief Executive of the organisation. He was the Chair of the London Business Angels Network and played a key role in the setting up of the European Business Angels Network. He has worked with the UK government and the European Commission on developing public policy initiatives to improve the financing of small and medium-sized enterprises. He was the Chair of Capital Enterprise, the umbrella body for organisations supporting micro business development in London, until 2012.

For the last ten years he has been a Visiting Professor at London South Bank University where he headed the Local Economy Policy Unit and was the managing editor of the journal Local Economy.

He has served as President of EURADA, and been a member of a number of advisory bodies of the European Commission.  He has been an active member of the International Economic Development Council in Washington DC and has a wide range of international contacts with economic development organisations.

He continues to write and lecture on small business finance and regional economic development.

davidwalburn@europe.com



[1] Department of Business Innovation and Skills (2014) “Insights from international benchmarking of the UK science and innovation system” BIS Analysis Paper 03, January 2014 https://www.gov.uk/government/publications/science-and-innovation-system-international-benchmarking

[2] European Commission (2012) ‘Communication on the European Research Area’ http://ec.europa.eu/research/era/era_communication_en.htm

[3] Jackson, DJ. (2011) ‘What is an Innovation Ecosystem?’ National Science Foundation, Arlington, VA

[4] UK Department for Business Innovation and Skill (2011) ‘Innovation and research strategy for growth’ - refers extensively to the innovation ecosystems of ‘Global Innovation Leaders’.

[5] Massachusetts Technology Collaborative (2014) http://www.masstech.org/innovation-ecosystem

[6] Adams, M. and Olesak, M. (2010)  ‘Innovation ecosystems: built from the bottom up I-Capital Advisors, Washington DC

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