Industrial Innovation is in transition; what
about innovation policies?
Erkki Ormala
Professor, Aalto University
• Industrial Innovation in Transition
– Innovation ecosystem
– Democratising innovation
– It takes two to tango
• Absorptive capacity of firms
• Policy conclusions
Industrial Innovation
in Transition
This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement
Photo:
No 64935. The European Commission has no liability in respect for the above
contents.
Sample
Count Interviews Interviews in
ry conducted
analysis
Distribution of sample
Manufacturing 2%
19,2%
ICT 1%
AT
75
100 %
CZ
75
100 %
DE
50
100 %
EE
80
100 %
ES
90
100 %
FI
69
100 %
IE
44
100 %
IT
45
100 %
NL
48
100 %
PT
25
100 %
UK
93
100 %
26,5%
29,3%
28,4%
39,1%
Agrofood 3%
23,2%
10 %
13,3%
22,0%
23,3%
8%
0%
32,9%
38,6%
Cleantech 2%
BiopharmaCle
32,9%
16,4%
34,8%
36,4%
20 %
30 %
40 %
< 10
10-49
50-249
10,6%
14,1%
32,3%
50 %
60 %
250-3000
70 %
80 %
4,3%
5,1%
90 %
100 %
>3000
Size: # of
employees
N.B. In some questions
multiple choices were
allowed
694
Total
4
© NOKIA
EO./16.1.2008
This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement
No 64935. The European Commission has no liability in respect for the above
contents.
Photo:
5278205683_dcbcda7fea_o_Flickr_CCAttribution_BY_Horia_Varian_Modified
Innovation Ecosystem
enable new ways of knowledge creation and utilization
with orchestration capability
to extended enterprise
Demand
orchestration
Demand
orchestration
Architecture
orchestration
From traditional large
enterprise
Architecture
orchestration
Supply
orchestration
Innovation
orchestration
Supply
orchestration
Innovation
orchestration
Demand
orchestration
Partners
Demand
orchestration
Architecture
orchestration
Core
Supply
orchestration
Innovation
orchestration
Core
Architecture
orchestration
Supply
orchestration
Innovation
orchestration
Innovation
orchestration
Demand
orchestration
Demand
orchestration
Architecture
orchestration
Architecture
orchestration
Supply
orchestration
Demand
orchestration
Innovation
orchestration
Architecture
orchestration
Supply
orchestration
Demand
orchestration
Innovation
orchestration
Architecture
orchestration
Architecture
orchestration
Innovation
orchestration
Supply
orchestration
Demand
orchestration
Innovation
orchestration
Supply
orchestration
Supply
orchestration
Innovation ecosystems – an embedded
approach?
Change in IES relevance
100%
90%
85%
80%
70%
60%
56%
50%
44%
40%
30%
15%
20%
10%
0%
0%
0%
Increased
No change
ALL (n=464)
Decresed
Finland (n=13)
Change in relevance of innovation
ecosystems in the last 5-10 years
This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement
No 64935. The European Commission has no liability in respect for the above
contents.
Photo:
5278205683_dcbcda7fea_o_Flickr_CCAttribution_BY_Horia_Varian_Modified
IES Stakeholders
Innovation Ecosystem Stakeholders
Total n=694, Finland n=69
30%
25%
25%
22%
20%
20%19%
18%
17%
15%
17%
15%
11%
7%
10%
12%
7%
4%
5%
5%
0%
Customers
Public
research
Suppliers Regulators
ALL
•
•
Finance
Other
Other infra
FINLAND
Customers have the highest importance for companies.
Interestingly they are followed by PRB (interaction with
knowledge providers is rated high).
This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement
No 64935. The European Commission has no liability in respect for the above
contents.
Photo:
5278205683_dcbcda7fea_o_Flickr_CCAttribution_BY_Horia_Varian_Modified
IES interactions: Most important elements
Most important elements of the
ecosystem
100%
80%
60%
46% 46%
40%
18%
20%
24%
15%
14%
8%
16%
5%
7%
0%
Knowledge
flows
Financial
support
Services
ALL
Mobility of
people
Other
Finland
Knowledge flows are central for companies
(reinforces the result of public research
bodies being crucial for companies).
This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement
No 64935. The European Commission has no liability in respect for the above
contents.
Photo:
5278205683_dcbcda7fea_o_Flickr_CCAttribution_BY_Horia_Varian_Modified
Democratising innovation
• The physical and virtual worlds blend allowing
people to contribute and be involved
• Clouds, Do-It-Yourself (DIY), social media, blended
worlds and sensing surroundings will become key
platforms for innovation.
• Creativity and imagination combined with good
competence are key characteristics of future
innovators.
Big Data usage in Innovation;
Industry Sectors
Use of BIG DATA
(ALL, n=563)
100
71%
80
70%
60
40
77%
69%
46%
29%
30%
54%
31%
23%
20
0
Agrofood
Biopharma
Clean
technologies
Yes
ICT
Manufacturing
NO
This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement
No 64935. The European Commission has no liability in respect for the above
contents.
Photo:
5278205683_dcbcda7fea_o_Flickr_CCAttribution_BY_Horia_Varian_Modified
Open Innovation
Engaging external partners
• Access and drive global intellectual vision
and insight
• Form strategic
collaborations with world-leading institutions
to multiply our efforts
• Build global test beds to learn from broader
audiences
IES interactions: OI-activities
• All, N = 566; Fin, N = 27
• 76 % of the companies indicated
that they engage in OI-activities.
This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement
No 64935. The European Commission has no liability in respect for the above
contents.
Photo:
5278205683_dcbcda7fea_o_Flickr_CCAttribution_BY_Horia_Varian_Modified
Three basic missions of universities
Research
University
Knowledge
sharing
Education
Absorptive Capacity of firms; Six Key
Principles
•
•
•
•
•
•
Personal motivation and incentives
Enabling mangement system
Efficient use of web tools
Extensive collaboration with external partners
Stimulating corporate culture
Creative and innovation oriented people
Public policy plays an important role
Barriers for industrial innovation
100%
90%
80%
70%
60%
50%
55.6%
45.8%
54.5%
47.5%
52.7%
45.8%
40%
42.3%
39.0%
41.9%42.4%
37.1%
34.3%
34.1%
27.1%
30%
18.6%
20%
23.8%
18.6%
10.2%
10%
0%
Finance
Capabilities
Regulation
Markets
Knowledge
ALL
IP-Systems
Standards
Parnerships
Other
Finland
Includes only “yes”-answers, multiple
choices were allowed.
This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement
No 64935. The European Commission has no liability in respect for the above
contents.
Photo:
5278205683_dcbcda7fea_o_Flickr_CCAttribution_BY_Horia_Varian_Modified
Initiatives for innovation
Public policy initiatives
100%
80%
60%
40%
20%
44%
31%
15%11%
13%
2%
11%
3%
9%
0%
24%
8%
8%
2%
14%
7%
0%
ALL
Finland
This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement
No 64935. The European Commission has no liability in respect for the above
contents.
Photo:
5278205683_dcbcda7fea_o_Flickr_CCAttribution_BY_Horia_Varian_Modified
Policy initiatives by countries
MOST IMPORTANT PUBLIC POLICY INITIATIVES
UK
32%
PT
5%
24%
0%
NL
12%
13%
11%
6%
FI
44%
ES
19%
EE
15%
DE
42%
CZ
2%2%
0%
24%
0%
10 %
R&D Grants
20 %
R&D Loans
Tax incentives
50 %
14%
17%
17%
13%
Public procurement
Educ& Training
0%
13%
20%
10%
12%
5%
60 %
9%
11%
12%
16%
0%
9%
35%
5%
40 %
10%
4%
3% 3%
30 %
22%
3%
15%
0%
23%
10%
15%
1%1%
0%
1%
0%
44%
26%
20%
4%
56%
AT
11%
0%3%0%3%
22%
2% 1% 4%
14%
26%
5%
15%
39%
6%
28%
10%
30%
11%
0%
6%
18%
IE
5%
12%
38%
IT
16%
1% 3%
14%
70 %
Cons. Support
7%
80 %
Publ. Research
13%
3%
7%
90 %
Other
This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement
No 64935. The European Commission has no liability in respect for the above
contents.
Photo:
5278205683_dcbcda7fea_o_Flickr_CCAttribution_BY_Horia_Varian_Modified
100 %
Policy recomendations, IIT Finland 2014
• Innovation policy should help the natural integration of the new
innovation instruments into the innovation processes in companies
• Improving conditions for public/private partnerships
• Increasing the understanding of the role of innovation in economic
and social development as well as in job creation
• In Finland the most important issue in reforming innovation policy
is to strengthen the part of the innovation system that genuinely
supports the development of new and internationally competitive
business
– Understanding of business concepts, emerging value domains and the
ways of capturing the value
– Improving systems integration in the innovation system
– Funding of growth companies
– Developing company spin-offs and business incupators
Preliminary Policy Conclusions, IIT 2017
• Ecosystems drive innovation
• People
– Reform education to provide skills for innovation and entrepreneurship
– Increase cross-sectorial mobility of people
• Financing
– Improve public funding for innovation (volume, rules and impact)
– VC: seed funding; growth phase
• Ecosystem game:
–
–
–
–
–
Improve conditions for public/private partnerships
Adopt systemic approach: support the evolusion and expansion of ecosystems
Assess always the impact of a regulation on innovation
Increase public procurement of innovative solutions
Improve access to markets
Learning outcomes
• A general understanding of innovation, innovation processes and
innovation management, in different contexts, and their role in society and
in business strategy.
• Understand how innovation can (and cannot) be fostered, managed or
steered, and which policies, processes and tools are needed, offering
case-based insights in what works and what does not.
• Understand how innovation is related to other functional business areas
such as finance, marketing, buying, customer relations and to the over-all
business design.
• Understand specific issues and topics in fostering and managing
innovation, e.g. technology platforms and innovation strategies,
innovation in inter-organizational networks, service innovation, user
driven innovation, collaboration in innovation, open innovation
arrangements such as IP management, business model innovation, etc.
Essay topics
• On-line communities & user-diven innovation in software
development
• Innovation capability and business perfomance: two cases
from Finnish small and medium sized hidden champions
• Innovation policy influence on renewal of forest industry –
case UPM biofuels
• Transportation systems in transition: why have we not seen
the quantum leap in Finland
Feedback
• What have you learned?
• How to improve?
Any questions regarding the Essay Writing?
Thank you