INTERNATIONAL SYMPOSIUM ON
ACCELERATING INNOVATION IN DEVELOPING
COUNTRIES
INNOVATION SYSTEMS IN A
NEW GLOBAL CONTEXT:
STILL A USEFUL FRAMEWORK?
Michiko Iizuka
UNU-MERIT
Kuala Lumpur, Malaysia
November, 2012
2
What is innovation?
“Implementation of a new or significantly improved
product (good/service) or process, a new
marketing methods, or a new organization
methods in business practices, workplace
organization or external relations.”
‘Implementation’ means introduced to the market
(OECD/Eurostat 2005)
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What is innovation system?
• Act as a ‘focusing device’ for policy via
• Identifying actors and firm as driving force
• Understanding interactions for knowledge flow
• Differentiate actors from contextual conditions
• Institutional settings
• Culture, religion
• Provided holistic vision of barriers/functions of
innovative behavior (policy dimension)
• Policy aimed to accelerate innovation activities of
firms
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Innovation System
Innovation system (UNIDO, 2007)
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Knowledge flow & Innovation system
• Importance of informal knowledge flow
• Factors that influence the degree and speed of
knowledge flow
• Social capital
• Trust
• Culture
• History
6
Changing conditions for innovation
process
• New challenges
• Globalization of knowledge diffusion & flow
• New types of innovation in changing world
• User Innovation
• Social Innovation
• Public sector innovation
• Innovation for inclusive development
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Globalization of knowledge diffusion & flow
• Increasing interaction through trade, investment (FDI) and
people (migration) created knowledge flow at global level
• Development of ICT (information communication technology)
and provision of IPR(intellectual property right) also support flow
of knowledge
However,
• Mixed results for developing countries because
• Indigenous capability is required for adaptation
• Absorptive capacity
• Proper institutional set up/ intermediaries is required for appropriation of
knowledge in equitable manner (benefit sharing mechanism)
• Local capacity needs to be strengthened
• http://www.youtube.com/watch?v=k_8-YDA9Dc4&feature=related
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Story about commercializing
indigenous knowledge
-Need an idea
- belong to different segment of society
-Linking knowledge
- Tacit/Traditional/Local & Generic/Scientific/Global
-Intermediary linking institution
-NGO, local government, Local academic institution,
local community
-Establishing mechanisms of fair distribution of
benefits
Globalization-opens opportunity but need
local capacity
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New types of innovation
User Innovation
Social Innovation
Public sector innovation
Innovation for inclusive development
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User innovation
• Creation or alteration of goods or services by user with an
aim to increase the benefit of its use
• Consumers and users are the driving force for innovation
• User innovation may not directly contribute to the Market
contrary to the official definition provided by the Olso
manual
• Often very difficult to be noticed(though information being collected)
• Diffusion process varies (user-producer, user becoming
entrepreneurs, users sharing the knowledge among themselves)
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Social Innovation
• Innovation that served society and enhance
social capacity to act or creates social
impact in meeting social goals: ‘creating
solutions’
• Not directly connected to market
• Driving force is not always firm but some
firms do
• Non pecuniary-measurement difficult: happiness,
quality of life, desirable innovation?
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Public sector innovation
• Improve efficiency and productivity of public sector in their
delivery of services to the citizens
• Recently focused due to financial crisis in developed
countries
• The innovation is not directly introduced to market but to
users
• Needs to establish criteria for measurement
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Innovation for inclusive development
• Focus on innovation in informal settings that
allows marginalized population to take part in
formal economy and benefit from it.
• Not connected to market—if not partially.
• Community/ marginalized group centered
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Features of innovation for inclusive
development
Informal setting
- Idea often comes from community (demand side) due to
lack of services or goods to solve problems
ex. Mobile phone banking and
• Multistakeholder knowledge diffusion and
innovation
• Unconventional actors such as NGO, informal media,
local corner shops
• Collaborative learning
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Summary of emerging changes 1
• Aim of innovation
• Productivity of firm
Solution for society
• Driving force/main actor of innovation
• Firm
Self organizing users and
consumers/community
• Actors
• Conventional formal
informal
Non-conventional/
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Summary of emerging changes 2
Knowledge flow
• Interactions at multiple dimensions
• Global –local, formal-informal, Economic-Social,
User-Producer
Type of solutions
• Technology fix to Holistic solution
• Complex and out of box
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Conclusion
• Innovation system need to expanded to accommodate
• Solve non pecuniary problem under less understood
environment
• Informal
• Traditional
• Community of practice
• Involving unconventional actors and different types of
interactions