A Tale of Different Realities: Innovation Capacity in the European Union Regions

A Tale of Different Realities: Innovation Capacity in the European Union Regions

Pedro Nuno Rebelo Pavão (University of the Azores, Portugal), João Pedro Almeida Couto (University of the Azores, Portugal) and Maria Manuela Santos Natário (Polytechnic of Guarda, Portugal)
Copyright: © 2019 |Pages: 19
DOI: 10.4018/978-1-5225-5849-1.ch013

Abstract

This chapter aims to identify the determinants that affect innovation capacity at regional level in Europe. It proposes modelling the territorial innovation capacity and identifies relevant factors with influence on the innovation capacity at a regional level. The chapter uses the Regional Innovation Scoreboard database and cluster analysis to detect behavioral patterns in terms of innovation performance in European regions. The results show that innovation capacity is related to regional governance, and particularly regional autonomy, regional control of innovation policy, influencing the affectation of structural funds, and the region's location within the European Union. Cohesion policy criteria is also a significant factor, demonstrating the adequacy of the European regional policy's new programming regarding innovation policy. These results point to the importance of the participation of regions in formulation, and implementation bottom-up strategies to develop innovation dynamics and develop partnerships with other public and/or private actors.
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Background

The national innovation capacity concept was first defined by Furman, Porter and Stern (2002), and its primary objective was to identify the source of differences between countries, with regard to visible innovation production by reflecting on the economics of innovation, systems analysis and innovation clusters. The concept of national innovation capacity in the work of Furman et al. (2002) relies on three vectors: (i) endogenous growth, based on the ideas of Romer (1990); (ii) the theory of industrial clusters, based on the competitive advantages of nations, developed by Porter (1990); and (iii) the research developed in national innovation systems (NIS) by Nelson (1993), Dosi, Freeman, Nelson, Silverberg, and Soete, (1988), and Edquist (1997).

In recent years, several authors focused on enriching the analysis, and clarifying the concept of innovation capacity using different approaches (Howells, 2005; Schiuma & Lerro, 2008; Natário, Couto, Tiago, & Braga, 2011b).

Managerial Approach

Suarez-Villa (2003) analysed the relationships among inter-organizational networks and innovation capacity, from which a new kind of organization, called ‘experimental undertaking’, emerged. Natário et al. (2011b) referred to the study of Belderbos, Carree, and Lokshin (2004), which analysed the impact of R&D in cooperation with the company’s innovative performance in terms of job creation and innovation productivity, to consider the countries of the community innovation survey (CIS).

Organizational Approach

Natário et al. (2011b) related to a set of authors for this approach. Camel-Ordaz, Hernandéz-Lara and Valle-Cabrera (2005), who studied how the characteristics of certain top management teams influence enterprises’ innovation capacity, measured in terms of levels of product innovation. Ganzaroli, Fiscato and Pilote (2006) examined the relationships between business succession and innovation capacity to explore business transfers as a potential source of innovation in small-and medium-sized enterprises (SMEs). Henttonen (2006) highlighted the role of internal and external innovation networks to boost a company’s innovative capacity.

Key Terms in this Chapter

National Culture: The set of norms, behaviors, beliefs, customs, and values shared by the population of a sovereign nation. Also refers to specific characteristics such as language, religion, ethnic and racial identity, and cultural history and traditions.

Regional Autonomy: Regional autonomy is decentralization of governance to outlying regions. An autonomous area is defined as an area of a country that has a degree of autonomy or has freedom from an external authority. It is typical for it to be geographically distant from the country, or to be populated by a national minority.

Regional Innovation Capacity: The ability of regional innovation networks to exploit existing resources, and to create a sustainable competitive advantage by driving innovation activities in a constantly changing environment.

Global Competitiveness: The set of institutions, policies, and factors that determine the level of productivity of a country.

Regional Innovation Systems: In the study of innovation systems, a regional innovation system (RIS) encourages the rapid diffusion of knowledge, skills, and best practice within a geographic area larger than a city, but smaller than a nation.

Innovation Capacity: The ability to come up, consistently, with novel ideas that deliver short and long-term profits to an organization. It comes from the ability to link insights, concepts, and facts in a new/different way.

National Innovation Systems: The National Innovation System (also NIS, National System of Innovation) is the flow of technology and information among people, enterprises, and institutions which is key to the innovative process on the national level.

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