UNDERSTANDING INNOVATION ECOSYSTEMS Catriona Sissons 1 , Dion O’Neale 2 , Shaun Hendy 1,2 1 Victoria University of Wellington 2 University of Auckland Te Pūnaha Matatini The Centre for Complex Systems and Networks
NEW ZEALAND’S ECONOMIC HISTORY Te Pūnaha Matatini The Centre for Complex Systems and Networks
NEW ZEALAND’S ECONOMIC HISTORY Te Pūnaha Matatini The Centre for Complex Systems and Networks
NEW ZEALAND’S ECONOMIC HISTORY “The mystery is why a country that seems close to best practice in most of the policies that are regarded as the key drivers of growth is nevertheless just an average performer.” OECD Economic surveys: New Zealand (2003). “If we adopt an economic geography perspective, there is nothing really paradoxical about New Zealand’s productivity performance.” Phil McCann, New Zealand Economic Papers (2010). Te Pūnaha Matatini The Centre for Complex Systems and Networks
SCIENCE AND INNOVATION • It is generally recognised that science and innovation are the key drivers of long run productivity growth • NZ under-invests in R&D compared to other OECD countries but is not an outlier given its size, distance from markets and industrial mix (Crawford, 2007) • That is, we look like Australia • We need to understand the economic geography of the production of knowledge before we can identify causes Te Pūnaha Matatini The Centre for Complex Systems and Networks
UNDERSTANDING KNOWLEDGE • Knowledge is a partially excludable, non-rival good • Firms benefit from R&D conducted by others via knowledge spill-overs • Firms will under-invest in R&D and/or an economy may become too specialised • The value of knowledge spill-overs is of the same order of magnitude as the private returns from R&D Te Pūnaha Matatini The Centre for Complex Systems and Networks
UNDERSTANDING KNOWLEDGE • The economic value of scientific knowledge is considerably greater than it’s market value • If government can stimulate science and innovation then its economy could grow faster than under laissez- faire • Governments have a key role in addressing this market failure (patents, R&D grants, R&D tax credits, public research system) Te Pūnaha Matatini The Centre for Complex Systems and Networks
KNOWLEDGE IN SMALL COUNTRIES • New Zealand produces 0.2% of the world’s scientific knowledge so much of the knowledge we use will be generated overseas • We can’t free-ride as our ability to absorb knowledge depends on the strength of our own R&D capability (Cohen and Levinthal, 1989) • Decisions on where or how we invest should be made with regard to “the rest of the world” (Jaffe 2013) Te Pūnaha Matatini The Centre for Complex Systems and Networks
KNOWLEDGE IN SMALL COUNTRIES But small countries face choices: • Scale (intra-industry spill-overs) or diversity (inter-industry spill-overs)? • Competition or collaboration (public/private)? We need to understand the economic geography of innovation before we can understand the implications of these choices Te Pūnaha Matatini The Centre for Complex Systems and Networks
THE INNOVATION ECOSYSTEM Te Pūnaha Matatini The Centre for Complex Systems and Networks
THE INNOVATION ECOSYSTEM Number of companies with greater revenues 1 10 100 10000000 1000000 1000000 100000 Average mass (grams) Revenue (NZD '000) 10000 1000 100 100000 10 1 0.1 0.01 0.001 10000 0.01 0.1 1 10 100 1000 10000 100000 1000000 Density (plants per square metre) Te Pūnaha Matatini The Centre for Complex Systems and Networks
THE INNOVATION ECOSYSTEM % of firms with more than N patents 0.1 1 10 100 10000000 1000000 Biomass distribution 100 100000 Average mass (grams) Number of patents, N New Zealand patents 10000 1000 100 10 10 1 0.1 0.01 0.001 1 0.01 0.1 1 10 100 1000 10000 100000 1000000 Density (plants per square metre) Te Pūnaha Matatini The Centre for Complex Systems and Networks
THE INNOVATION ECOSYSTEM % of firms with more than N patents 0.001 0.01 0.1 1 10 100 10000000 100000 1000000 100000 10000 Average mass (grams) Number of patents, N 10000 1000 1000 100 10 100 United States Australia 1 New Zealand 0.1 10 Finland 0.01 0.001 1 0.01 0.1 1 Density (plants per square metre) Te Pūnaha Matatini The Centre for Complex Systems and Networks
THE INNOVATION ECOSYSTEM Te Pūnaha Matatini The Centre for Complex Systems and Networks
THE INNOVATION ECOSYSTEM 350 Finnish Engineering PhDs per year 300 New Nokia inventors per year 250 200 150 100 50 0 Te Pūnaha Matatini The Centre for Complex Systems and Networks
SCALE Sydney 10000 Melbourne Adelaide Brisbane Number of patents Auckland Canberra 1000 Wellington Waikato Christchurch 100 10 1 10000 100000 1000000 10000000 Regional population Te Pūnaha Matatini The Centre for Complex Systems and Networks
ECONOMIC GEOGRAPHY OF INNOVATION Bigger cities produce more patents per capita Stylised fact: Te Pūnaha Matatini The Centre for Complex Systems and Networks
CONNECTIVITY 0.90 Melbourne Fraction of authors in largest Sydney 0.85 connected component Brisbane 0.80 New Zealand Perth 0.75 Canberra Auckland 0.70 Adelaide 0.65 0.60 5000 10000 15000 20000 25000 30000 35000 Total number of scientists Te Pūnaha Matatini The Centre for Complex Systems and Networks
ECONOMIC GEOGRAPHY OF INNOVATION Bigger cities produce more patents per capita Stylised fact: Stylised fact: Innovators are better connected in bigger cities Te Pūnaha Matatini The Centre for Complex Systems and Networks
KNOWLEDGE SPILLOVERS FROM DIVERSITY • Some knowledge is highly specialised; other types of knowledge are broadly applicable Medical science Vet science Soil science Te Pūnaha Matatini The Centre for Complex Systems and Networks
KNOWLEDGE SPILLOVERS FROM DIVERSITY P A B Christchurch A B D Auckland C Q R • Some knowledge travels (codified) but some knowledge doesn’t (tacit); tacit knowledge is difficult to observe Te Pūnaha Matatini The Centre for Complex Systems and Networks
KNOWLEDGE SPILLOVERS FROM DIVERSITY • Examine the revealed comparative advantage of regions or countries diverse novel ubiquitous specialised Te Pūnaha Matatini The Centre for Complex Systems and Networks
KNOWLEDGE SPILLOVERS: WORLD Food Manufacture Medical Devices Dairy, Oils Counters & Preparations & Fats & Clocks Biotech Digital Food Processing Communication Book Binding Nanotech Paper Oscillators & Spinning/ Amplifiers Weaving Foundries Fibers Alloys Sewing Inorganic Chemistry Garments Electrolysis Bicycles Furnaces Fluid Separation Small Arms Turbines Nuclear Reactors Military & Radiation Glues, Inks, Organic Enzymes Paints Chemistry Patent Space (TL3 Regions) Te Pūnaha Matatini The Centre for Complex Systems and Networks
KNOWLEDGE SPILLOVERS: NEW ZEALAND Semiconductors & nanotechnology Surgical tools Food processing Amplifiers; Clocks resonators; Biotech oscillators Enzymes & biomolecules Te Pūnaha Matatini The Centre for Complex Systems and Networks
KNOWLEDGE SPILLOVERS: REGIONS Electronics Electronics Te Pūnaha Matatini The Centre for Complex Systems and Networks
DIVERSITY VS POPULATION 80 70 60 50 Diversity 40 30 20 10 0 10000 100000 1000000 10000000 Population Te Pūnaha Matatini The Centre for Complex Systems and Networks
ECONOMIC GEOGRAPHY OF INNOVATION Bigger cities produce more patents per capita Stylised fact: Stylised fact: Innovators are better connected in bigger cities Stylised fact: Bigger cities support a greater diversity of patents Te Pūnaha Matatini The Centre for Complex Systems and Networks
UBIQUITY VS POPULATION 1600 1400 Mean ubiquity 1200 1000 800 600 400 10000 100000 1000000 10000000 Population Te Pūnaha Matatini The Centre for Complex Systems and Networks
ECONOMIC GEOGRAPHY OF INNOVATION Bigger cities produce more patents per capita Stylised fact: Stylised fact: Innovators are better connected in bigger cities Stylised fact: Bigger cities support a greater diversity of patents Stylised fact: Bigger cities tend to have more novel patent portfolios Te Pūnaha Matatini The Centre for Complex Systems and Networks
ECONOMIC GEOGRAPHY OF INNOVATION Bigger cities produce more patents per capita Stylised fact: Stylised fact: Innovators are better connected in bigger cities Stylised fact: Bigger cities support a greater diversity of patents Stylised fact: Bigger cities tend to have more novel patent portfolios Hypothesis: Innovators are exploiting the density and diversity of the networks available to them to generate new knowledge Te Pūnaha Matatini The Centre for Complex Systems and Networks
We need to build a city of We need to build a city of four five million people four million people Te Pūnaha Matatini The Centre for Complex Systems and Networks
OPEN INNOVATION 10% of companies now produce 80% of all patents Japan USA Germany Sth Korea China France Te Pūnaha Matatini The Centre for Complex Systems and Networks
We need to build a city of We need to build a city of four five million people four million people We need a dating service for ideas Te Pūnaha Matatini The Centre for Complex Systems and Networks
Recommend
More recommend
