innovation in peripheral areas sara davies and rona michie scottish parliament cross party rural...
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Innovation in Peripheral Areas
Sara Daviesand Rona Michie
Scottish Parliament Cross Party Rural Policy Group, 26 January 2011
UK Innovation Centre (BIS, ESRC, NESTA and TSB)
Sara Davies and Rona Michie, European Policies Research Centre, University of Strathclyde
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Ongoing debates
• Innovation is seen to be fuelled by the concentration of people - sharing ideas, knowledge and skills – so in cities not peripheral areas?
• Is co-location enough? Do cluster policies work?• Does ICT end the benefits of F2F? Does it
generate new kinds of proximity?• Other challenges for businesses in peripheral
areas – cost of reaching suppliers & customers – small labour pool
Sara Davies and Rona Michie, European Policies Research Centre, University of Strathclyde
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• Few exceptional places with leading firms in global markets (e.g. Finland, Norway) – long-term policy
• R&D-driven innovation based on immobile natural resources (e.g. sea, cold) – external expertise
• Solutions to local problems (e.g. tele-medicine, social enterprise) - potential wider application
• Image-based innovation (e.g. food, tourism) – selling to large external markets – role of ICT
• New ways of working (e.g. business/knowledge services) - serving large external markets – ICT
Innovation in the periphery differsbecause sectors differ
Sara Davies and Rona Michie, European Policies Research Centre, University of Strathclyde
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Innovation in the periphery differs because the context differs
(Source: Miles et al., 2009)
• Entrepreneurship• Skills• Finance• Public research• Competition• Demand• Openness
Sara Davies and Rona Michie, European Policies Research Centre, University of Strathclyde
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Policy recommendations (1):Support existing strengths
• Questions over value-for-money of cluster policies – path dependence
• Not impossible to create world-leading innovation in the periphery but it takes long-term political commitment & funding
• Focus targeted support on existing strengths – Innovation linked to immobile natural resources (e.g.
sea, cold, dark, space)– Innovation linked to solving local problems with a
potential wider application (e.g. tele-services, social enterprise)
Sara Davies and Rona Michie, European Policies Research Centre, University of Strathclyde
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Policy recommendations (2):Build openness
• Core problems for peripheral areas are– Few people – Distance to other people
• Many weaknesses in the innovation context can be overcome via openness– Broadband (& transport) infrastructure – Human brokering
• E.g. Norway: external R&D and funding plus own human and natural resources
Sara Davies and Rona Michie, European Policies Research Centre, University of Strathclyde
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Openness:Broadband infrastructure
• Firms can find out about and access:– External finance– External research, knowledge & ideas– External customers– External competitors
• Significant demand in peripheral areas– Coverage and speed
• High priority in many small peripheral countries; also in Wales and Cornwall
Sara Davies and Rona Michie, European Policies Research Centre, University of Strathclyde
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Broadband lines per 100 inhabitants, 2009(Source: EUROSTAT)
0
5
10
15
20
25
30
35
40
Nethe
rland
s
Sweden
Finla
nd
Germ
any
Fran
ce UK EU
Irelan
d
Spain
Italy
Lithu
ania
Latv
ia
Poland
Roman
ia
Bulgar
ia
Sara Davies and Rona Michie, European Policies Research Centre, University of Strathclyde
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Households with broadband (%) 2008(Source: EUROSTAT)
0
20
40
60
80
100
H&I
Denm
ark
Nethe
rland
s
Sweden
SE Eng
Finla
nd UK
Scotla
nd
Fran
ce
Germ
any
SW S
cotla
nd
East S
cotla
nd
Poland
Greec
e
Roman
ia
NE Sco
tland
Sara Davies and Rona Michie, European Policies Research Centre, University of Strathclyde
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Household download speed (Mbps)(Source: www.netindex.com)
0
510
1520
25
3035
40
South
Kore
a
Lithu
ania
Latvi
a
Romania
Sweden
Nether
lands
Germ
any
Finlan
d
Hungar
y
Franc
eUK
Spain
Poland
Irelan
d
Greec
e
Sara Davies and Rona Michie, European Policies Research Centre, University of Strathclyde
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(a) Threshold=512Kbps (b) Threshold=1Mbps (c) Threshold=4Mbps (d) Threshold=8Mbps
Areas with download speed lower than the threshold indicated
(Source: Bernardi & Marina, 2010)
Sara Davies and Rona Michie, European Policies Research Centre, University of Strathclyde
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Openness: Human brokering to external excellence
• To access private finance outside the region– Not a major focus– Regional venture capital (e.g. Sweden’s Norrland Fund) may
increase capacity to broker to external funders• To work with excellent researchers in UK / internationally
– E.g. Tekes (Finland) helps firms access universities and research centres abroad
• To find out about world class competitors in UK / world– E.g. 15 ELY centres (Finland) help firms to find information on
competitors abroad via searches, seminars, funding for trade fairs
• To engage with leading users and customers– E.g. 20 Innovation Norway offices help innovative SMEs find
customers and manage contracting
Sara Davies and Rona Michie, European Policies Research Centre, University of Strathclyde
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Policy recommendations (3):Develop human capital
• Core problems for peripheral areas = few people and distance to other people
• Innovation = generation, adaptation and absorption of knowledge– Often not about radical ideas but about combining and
applying existing knowledge
• Depends on high level of skills across the whole population – so high quality education for all
• QoL to retain/attract people & facilitate returning
Sara Davies and Rona Michie, European Policies Research Centre, University of Strathclyde
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Highest qualifications by Scottish school-leavers, %, 2008-09
(Source: Scottish Government, 2010)
05
101520253035
Tota
l
Larg
e ur
ban
Other
urb
an
Acces
sible
small
towns
Small
rem
ote
towns
Acces
sible
rura
l
Remot
e ru
ral
Sara Davies and Rona Michie, European Policies Research Centre, University of Strathclyde
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Mathematics, average score,15 year olds(Source: PISA, 2009)
420
440
460
480
500
520
540
560
Sara Davies and Rona Michie, European Policies Research Centre, University of Strathclyde
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Reading below Level 2, % of 15 year olds
(Source: PISA, 2009)
0
5
10
15
20
25
Sara Davies and Rona Michie, European Policies Research Centre, University of Strathclyde
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Education in Finland(OECD, 2010)
• Consistently close to top of international league tables since 2000 with small differences between top and bottom students (and schools)
• Gradual reform to a comprehensive (non-streamed) system from 1970s, with:– Commitment to ensuring that each child achieves, concern
beyond education – Highly qualified, autonomous teachers – Systems of professional accountability – Emphasis on creativity, problem-solving, teamwork, self-
direction– Modest funding focused on the classroom
• Difficult socio-economic context– Precarious history & difficult Cold War situation– Poorer than neighbours & banking crisis / recession in 1990s– Internal socio-cultural & political divisions
Sara Davies and Rona Michie, European Policies Research Centre, University of Strathclyde
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Innovation policy for peripheryin time of fiscal constraints
• Key context factors for innovation in peripheral areas are openness and skills
• Policy recommendations– Support existing strengths (esp. where the
periphery has real advantage)– Upgrade broadband coverage and speed– Build policy capacity to broker to external
excellence on behalf of firms – Work to improve education standards for all
Sara Davies and Rona Michie, European Policies Research Centre, University of Strathclyde
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Thank you for listening
Sara.Davies@strath.ac.uk
http://www.eprc.strath.ac.uk/irr
Sara Davies and Rona Michie, European Policies Research Centre, University of Strathclyde
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Sources & useful links
• Bernard G and Marina M (2010) BSense – a system for enabling automated broadband census, University of Edinburgh, http://broadbandforall.net
• Miles et al. (2009) The wider conditions for innovation in the UK, Report for NESTA, London
• OECD (2010) Strong performers and successful reformers in education, Paris
• Scottish Government (2010) SQA Attainment and school leaver qualifications in Scotland: 2008/09, Edinburgh
• www.netindex.com• www.pisa.oecd.org• http://www.ukirc.ac.uk/
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