CC BY
64
A. S. Ilyin D. V. Makhnev V. V. Yanovsky
А. С. Ильин Д. В. Махнев В. В. Яновский
Favorable Innovation Climate of the Region - Project Approach
Благоприятный инновационный климат региона — проектный подход
Ilyin Alexey Sergeevich
North-West Institute of Management — branch of Russian Presidential Academy of National Economy and Public Administration (Saint-Petersburg). Senior Lecturer of the Chair of Local Government and Regional Development
Makhnev Dmitry Viktorovich
North-West Institute of Management — branch of Russian Presidential Academy of National Economy and Public Administration (Saint-Petersburg) Graduate student makhnev@gmail .com
Yanovsky Valery Vitalyevich
North-West Institute of Management — branch
of Russian Presidential Academy of National Economy
and Public Administration (Saint-Petersburg)
Professor of the Chair of Local Government and
Regional Development
Doctor of Science (Economics)
ianovski@mail.ru
Ильин Алексей Сергеевич
Северо-Западный институт управления — филиал РАНХиГС (Санкт-Петербург) Старший преподаватель кафедры местного самоуправления и территориального развития
Махнев Дмитрий Викторович
Северо-Западный институт управления — филиал РАНХиГС (Санкт-Петербург) Аспирант
makhnev@gmail.com
Яновский Валерий Витальевич
Северо-Западный институт управления — филиал РАНХиГС (Санкт-Петербург). Профессор кафедры местного самоуправления и территориального развития Доктор экономических наук ianovski@mail.ru
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KEY WORDS
regional economy, congenial innovation climate, KPI principles, diffusion of innovations КЛЮЧЕВЫЕ СЛОВА
региональная экономика, благоприятный инновационный климат, принципы KPI, диффузия инноваций
ABSTRACT
The role of actors of the innovation process and the role of government in creating congenial innovation climate in the region are considered in the article. A project approach in order to solve problems of regional development is proposed in the article.
РЕФЕРАТ
В статье рассматривается роль участников инновационного процесса в устойчивом развитии региона, а также роль государства в создании благоприятного инновационного климата в регионе. Также предлагается применение проектного подхода для решения задач устойчивого развития региона.
It is now highly recognized that innovation is a key growth driver: top ranking companies like Apple, Google, Toyota Motor and others are leaders in innovation. National governments and leaders are also increasingly recognizing the importance of
innovation as a driver for sustainable development and many are proactively taking measures to create the right infrastructure to facilitate innovation [5].
The problem of "immunity" of Russian economy to innovations remains since the
g period of USSR. We suppose the problem | is in the idea of embedding itself: an ato tempt to embed any novelty in an existing o social-economic system from the outside m implies that either this system will trans-x form, or it will reject a novelty. A function-i— ing system will always reject any attempt < to transform it. Besides the system transom formation (including the transformation of a social-economic system of a region) occurs only forcedly, it usually has a structural nature: a purchase of a new equipment leads to changes in manufacturing process and remuneration plan followed by changes in product cost, quality, marketing etc.
As "where there's demand, there's supply", all necessary knowledge and inventions will be Anally created in the market system, but the main question is how long it will take. That is why it is important to permanently monitor the system with its environment and interrelations, to trace all evolution processes inside it, to forecast its near-term state and to breed above mentioned demand in advance. It is also crucial to have a developed and mobile R&D system that will be able to supply such demand — and here is the functional place of science. In this case we do not face usual implementation problems. Experience of the USA in this field gives us a very important conclusion: the activity of searching for people with entrepreneurial spirit should be decentralized. Venture industry is a typical example: it rejects approximately 90% of all ideas, but at the end the system sifts out the most noteworthy start-ups from a great number of nonsensical and prospectless projects.
Recently The President of Russian Federation stated the problem of the low labour productivity. Perhaps in the nearest future the law, that prohibits the employment of all equipment that is older than 5 years, will become the main innovation law. There is another way to stimulate Arms based on Japanese and Korean experience: if an entrepreneur buys modern equipment, government will grant tax of custom privileges. Moreover, may be there should be an official standing regarding the amount of
money all public enterprises must spend on research and development. Obviously, modernization of Russian economy requires the systematic approach, which in the process of economy regulation becomes apparent in the project management.
We suggest dividing all above mentioned problems into two parts. The first is a creation of a congenial economic climate in the region [13], and the second is to provide the innovation growth of the regional economy.
Project management can help government to adapt to the changing dynamics of the environment, and it is probably the ideal management tool for coping with a fast-changing world. Certainly, project management will not guarantee that public sector will accomplish great and wonderful things, but it will increase the probability that it will [12].
It is reasonable to set up a regional standard based on KPI (key performance indicators) principles in order to create a congenial innovation climate in the region. In this case "A Standard of the activities of the executive authorities of subjects of Russian Federation in order to provide a congenial investments climate in the region", developed by "Business Russia" ("Delovaya Rossija") and "Agency of strategic initiatives" could be taken as an example [3].
Generally, four main actors can be distinguished in the innovation process on the regional level: government, firms, educational sector and users (customers).
The educational sector produces most of the labour force as well as the highly qualified personnel, but both groups make significant contributions to innovation. The education sector also creates knowledge which can be made freely available through publication, or it can be commercialized and sold.
The government sector is responsible for building and maintaining some of the boundaries of the innovation system. It is also the source of new policies and their implementation, and that makes the government sector key to the discussion [2].
Joseph Schumpeter in his book "Capitalism, socialism and democracy" underlined the role of entrepreneurs whose main function is to reform or revolutionize the pattern of production by exploiting an invention or, more generally, an untried technological possibility for producing a new commodity or producing an old one in a new way, by opening up a new source of supply of materials or a new outlet for products, by reorganizing an industry and so on [10]. The essence of trying something new, of innovation, is that outcomes are uncertain in this sense, with success never a sure thing. And where and when a considerable amount of innovation is going on, created by different economic actors, the ecosystem is particularly uncertain. In such a context, considerable progress may be being made by the economy as a whole, but through a process of "creative destruction" that involves losers as well as winners [6].
Customers in the market regarding new technologies and new innovative products play the role of the institute of the competitive selection: successful innovations flourish while unsuccessful ones die out [11].
A general historical intuition is that economic development is intertwined with the change in the institutions supporting the generation, diffusion and exploitation of technological knowledge and with change in corporate organizations and strategies [1].
Carlotta Perez and Christopher Freeman have proposed that the key technologies and industries of different eras generally require different sets of supporting institutions. Their argument is that the nations that tend to be leaders in the different eras are those that had, or managed to build, the appropriate set of institutions. At the same time, nowadays, according to Richard Nelson, achieving the needed reforms in a country's economic structure may well be a more difficult task than gaining the scientific and engineering knowledge needed to operate the new technologies [6].
The role of institutions is an enormously complex topic. It is probably where economic theory at its weakest and modeling of institutions is still at a highly rudimen-
tary stage [1]. Understanding better the g processes of institutional evolution, and | how those processes interact with the evo- o lution of technologies and firm and indus- o try structures, may be the key to under- m standing the processes of economic catch- x up [6]. i
It is obviously, that for countries aiming < to catch up, developing the capabilities for m learning and innovation in firms is the heart of the challenge. However, a strong system of university and public labs research can play a very important supporting role [Ibid]. Actors of the innovation process are connected with each other and it is their interrelation that plays the key role in the innovation process on the regional level and in the development of the region.
According to Christopher Freeman and Bengt-Ake Lundvall innovation is an interactive process and the interaction between user and producer can take three different forms: exchange of products, exchange of information and cooperation [4]. However, the interrelations between the actors of the innovation process are not as strong as they could be. For example, the fact that most universities have rather weak relationships to industry and the fact that most attempts to strengthen the interaction have failed, has put this item on the agenda of national governments, and international organizations [Ibid].
The effective interrelations between government, firms, educational sector and consumers are essential for the innovation process. There is a complex system of interaction between the actors of the innovation process of the region (Fig. 1). The main questions for government should be: "How to promote and foster innovation?" [2]. This question leads us to another one: "How government can intensify the interrelations between actors of the innovation process?" The influence of government can augment collaboration processes that will result in a synergetic effect, which will lead to the creation of additional opportunities for the development of all actors.
It is important to emphasize, that the development of a social-economic system
o <
Fig. 1. The scheme of interaction between actors of innovation process of the region
of the region is a construction of new economic levels, which are higher than existing ones in a qualitative sense. Economic level is an aggregate of enterprises with similar technologies, resources and production. Nowadays a potential of timely reorientation of resources from technologically backward productions to technologically advanced ones becomes a criteria of the effectiveness of organization systems on all levels of economics.
We suppose, that the average growth rate of cutting-edge industries (the speed of elimination of technological multiplicity) V is inversely proportional to the effectiveness of territorial social-economic system Eses. Then assume that k is an average speed of the diffusion of innovations:
V =
k
Eq
(1)
Basic growth rate of N-th industry RNb is easy calculated:
RN =
N
(2)
where yN — current level of industry development, y0 — basic level for comparison.
In our case: V = to (1) results in:
Ng
N
E
SES
N
N
' tN
'N gb
, inserting it
(3)
As follows from eq. 3, the effectiveness of territorial social-economic system is proportional to the number of cutting-edge industries in the economy of the region and to the average speed of the diffusion of innovations [5].
0
Competitive resources are vital for the regional innovation process. Competitive resources mean everything that attracts attention of the target consumers.
The objective of setting up a sustain-ability of competitive advantage consists in creating of a special uniqueness and value impossible to copy. There are two main ideas of sustainable competitive advantage: idea of secure market positioning and idea of unique resource potential [7, 8].
According to the first one competitive advantage lies in choosing and protecting a market niche (niche specialism). It is not a worth recommending strategy for all regions, but some may find it suitable. According to the second idea competitive advantage is provided by unique internal resources and this approach seems to be perspective especially for urban agglomeration.
In our point of view, setting up the sources of competitive advantages, which provide a sustainable economic growth and increase a quality of life, should be fulfilled based on innovation foundation and using investments to raise returns to resources. Innovations should be interpreted as a natural way of gaining competitive advantages in a market economy, because they play an essential role in effective usage of simple and creating specialized competitive factors (according to M. Porter). Investments must ensure a global competitiveness for the region based on innovations and cutting-end technologies, providing its sustainable development [14].
Government should find key factors of regional policy that should lead to a creation of innovative environment, where new projects and startups will flourish. It requires a systematic and complex approach and should begin with analyzing and understanding of the regional innovation system, its structure, components and agents, their interrelations and behaviors and their influence on the overall system behavior.
Afterwards it is vital to create a model of the innovation system with all interrelations between participants of innovation process in the region. Using this complex model as a basis will help to find ways of
intensification economic and innovation g processes by force of government contri- | bution. While modeling it is important to o take into account the works by Philippe o Aghion, Peter Howitt and especially Paul m Romer, who was the first to develop the x idea of the model of endogenous growth i-instead of exogenous: "From the point of < view of policy advice, growth theory had m little to offer. In models with exogenous technological change and exogenous population growth, it never really mattered what the government did" [9].
Measures to raise the effectiveness of the R&D sector and its integration to a global economy mostly become apparent in increase of the role of Russia as a knowledge provider. Stimulation of the entrepreneurial sector demand on innovations could lead to enlargement of foreign technologies import that will increase the risk of "impoverishing" development. In this case a capitalization of R&D sector will take place mostly outside Russia and business sector resources will be excluded from the R&D sector reproduction chain.
At the same time an attempt on providing system integrity of Russian economy based on innovation development fraught with risks:
1) A possible intention to restrict the direction of fundamental research within problems that are relevant for technologically backward entrepreneurial sector will cause a negative effect on a potential of long-term economic growth.
2) Stimulation of technological innovations in terms of depreciated manufacturing capabilities is ineffective. Making a switch of investment demand on domestic supply could create additional barriers for import of technologies and equipment that will slow down the rate of industrial modernization and will threaten competitiveness of the region.
3) Criteria of competitiveness cannot be universal, so it is important to proceed from principle of relativity. It means that specific industries that are ready to be competitive should be oriented to the world market, and backward industries
g important for sustainable development should be measured up with domestic o competitors.
o 4) Therefore the role of government is as m important as the role of institutions in x organization of regional economy.
Today competitiveness is determined < by the effectiveness of usage of the rem gional resources such as capital and labour force in comparison with other regions. Regional competitiveness is a capability to produce services and goods in the terms of free market, selling of which increases a common weal in the region and the whole country.
Sustainable development could be based only on a capital and labour productivity growth switching to a new "case
of resources". A foundation of this case in the modern economy consists of:
• mobile labour force with modern key competences;
• cutting-edge technologies;
• legal, transport, communication and trade integration to open markets;
• competitive market positions (global brands, distribution channels etc.);
• corporations-residents, implementing growth strategies on global markets. Nevertheless, economic incentives for
technological modernization of industries and social direction of economy are not formed yet on the regional level. That is why many processes in Russian economy cannot be kept within classical schemes and models of real market economy.
References
1. Dosi G., Freeman C., Fabiani S. The Process of Economic Development: Introducing Some Stylized Facts and Theories on Technologies, Firms and Institutions // Industrial and Corporate Change. 1994. Vol. 3, N 1.
2. Gault F. Innovation Strategies for a Global Economy. Development, Implementation, Measurement and Management. International Development Research Centre, 2010.
3. http://www.asi.ru/standard/.
4. Lundvall B. A. Product Innovation and User-Producer Interaction // Industrial Development Research Series. 1985. N 31.
5. Maxwell I. E. Managing Sustainable Innovation. The Driver for Global Growth. Springer, 2009.
6. Nelson R. R. Economic Development From the Perspective of Evolutionary Economic Theory // Working Papers in Technology Governance and Economic Dynamics. 2006. N 2.
7. Porter M. E. What is strategy // Harvard Business Review. 1996. Vol. 74, Issue 6.
8. Prahalad С. К. And Hamel Gary. The Core Competence of the Corporation // Harvard Business Review. 1990. Vol. 68. P. 79-91.
9. Romer P. M. Capital Accumulation in the Theory of Long-Run Growth, Modern Business Cycle Theory. Oxford, 1989.
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Литература
1. Dosi G., Freeman C., Fabiani S. The Process of Economic Development: Introducing Some Stylized Facts and Theories on Technologies, Firms and Institutions // Industrial and Corporate Change. 1994. Vol. 3, N 1.
2. Gault F. Innovation Strategies for a Global Economy. Development, Implementation, Measurement and Management. International Development Research Centre, 2010.
3. http://www.asi.ru/standard/. <
4. Lundvall B. A. Product Innovation and User-Producer Interaction // Industrial Development s Research Series. 1985. N 31. |
5. Maxwell I. E. Managing Sustainable Innovation. The Driver for Global Growth. Springer, 2009. ^
6. Nelson R. R. Economic Development From the Perspective of Evolutionary Economic Theory // 2 Working Papers in Technology Governance and Economic Dynamics. 2006. N 2.
7. Porter M. E. What is strategy // Harvard Business Review. 1996. Vol. 74, Issue 6.
8. Prahalad С. К. And Hamel Gary. The Core Competence of the Corporation // Harvard Business н-Review. 1990. Vol. 68. P. 79-91. <
9. Romer P. M. Capital Accumulation in the Theory of Long-Run Growth, Modern Business Cycle ш Theory. Oxford, 1989.
10. Schumpeter J. A. Capitalism, Socialism and democracy. Routledge, 2003.
11. Weidlich W. Sociodynamics: A Systemic Approach to Mathematical Modeling in the Social Sciences. Dover Publications, Inc., 2000.
12. Wrick D. W. Public-sector project management: meeting the challenges and achieving results. John Wiley & Sons, Inc., 2009.
13. Яновский В. В. Организационно-экономический механизм управления инновационной активностью в регионе // Региональная экономика: теория и практика. 2009. № 16 (109). С. 34-42.
14. Яновский В. В. Инновационный процесс и конкурентоспособность региона // Личность. Культура. Общество: Междисциплинарный науч.-практич. ж-л соц. и гуманит. наук. 2006. Т. VIII, вып. 2 (30), 2006. C. 331-348.
15. Яновский В. В. Туннельный эффект для барьеров инновационной экономики // Управленческое консультирование. 2008. № 4. С. 84-94.
