Constructing regional advantage from innovation systems

The idea of “regional innovation systems” came about by combining the regional innovation policy already in existence in the UK with regional innovation networks. The systems are defined as a set of nodes in the innovation chain, including knowledge-generating firms and institutions, as well as knowledge exploiting-exploring enterprises, and a number of specialised intermediary functions such as service infrastructure, financing instruments, commercialisation and market expertise and policy support.

The key to successful regional innovation is "a self-organising, open system which translates 'exploration' knowledge […] to the point where it can be successfully exposed to 'exploitation' knowledge in the form of a commercial innovation on the market, embodying new knowledge, whether scientific, technological or creative."

This is a key process by which regions may ‘construct advantage’ for themselves

Regional innovation systems require transparency and openness between the “exploration” knowledge sub-system and the knowledge “exploitation” sub-system. Between the two lies a third sub-system which communicates knowledge generated to the exploitation sub-system. In entrepreneurial system set-ups this intermediary sub-system “is occupied by lawyers, accountants and investors of various kinds, knowledge entrepreneurs who solve problems or seek solutions, financial engineers like venture capitalists, varieties of specialist consultants, incubator and accelerator managers, even well-functioning knowledge transfer offices in universities."

It is this third subsystem, according to Prof Cooke, which may potentially solve the innovation paradox, facilitating ‘constructed advantage’ efforts of regional policy makers – the phenomenon where, compared to more advanced regions, the regions that would most need to increase investment in innovation to stimulate growth have a much lower capacity to absorb funding and develop an appropriate level of innovation-related activity.

Governments can also assist in the development of these systems by implementing policies that "reduce political conflicts, especially where they concern human wellbeing" and by establishing "an innovation culture that is inclusive, open and transparent to all actors and institutions." So far, in Europe, it is ‘social welfare’ economies like Sweden and Norway that have adopted explicit regional innovation system building strategies at the national level. The EU has encouraged such systems in over 100 regions across all Member States, notably through the RIS initiative. This is good news as current research indicates that effectiveness increases exponentially if there are more systems to network with.

These systems provide the necessary platform to encourage public and private investment in the sources of complex knowledge, such as universities, and which can also offer these centres and their staff incentives and opportunities to network. As a result, "good quality, well-resourced and globally benchmarked centres of research excellence will be the key drivers of constructing advantage from next-generation innovation."

About Phil Cooke

Philip Cooke is University Research Professor in regional economic development, and founding director (1993) of the Centre for Advanced Studies, University of Wales, Cardiff. In 2002 the UK Economic & Social Research Council awarded core-funded UK Research Centre status to CESAGen, a partnership initiative on the Social and Economic Analysis of Genomics in which Prof. Cooke’s Centre has ‘flagship project’ (Economics of Biotechnology Innovation) status. His research interests lie in studies of Biotechnology, Regional Innovation Systems, Knowledge Economies, Entrepreneurship, Clusters and Networks. He co-edited the first & second editions of ‘Regional Innovation Systems’ (UCL Press & Routledge) in 1998 & 2004; co-authored 'The Associational Economy' published in 1998, and 'The Governance of Innovation in Europe' in 2000. He is Special Theme editor and contributor for two issues of The Journal of Technology Transfer focused on ‘Regional Innovation Systems’, 2002 & 2004/5. In 2003 he was Special Theme editor for the issue of European Planning Studies on ‘Biotechnology Clusters & Beyond’ that explored regional biotechnology systems. In 2002 he released a fast-selling ‘clusters’ book – ‘Knowledge Economies’, published by Routledge. In 2004 Regional Economies as Knowledge Laboratories’ co-edited with Andrea Piccaluga is published by Edward Elgar Publishing Co. Prof. Cooke is a UK government advisor on innovation, and advises national & regional governments, the EU, OECD, World Bank and UNIDO on regional innovation systems. He is also Editor of 'European Planning Studies' a bi-monthly+4 journal devoted to European urban and regional governance, innovation and development issues. In 2003 he was elected Academician of the UK Academy of Social Sciences. In 2004 he was made Distinguished Research Fellow (PRIME) of the University of Ottawa School of Management. He is board member of the Canadian ISRN and Swedish CIND and CIRCLE research centres. In 2006 he was awarded an honorary PhD by the University of Lund, Sweden.