Provocation for The Innovators Board: OPEN INNOVATION SYSTEMS

2nd February 2017

Professor Birgitte Andersen

OPEN INNOVATION SYSTEMS

Open innovation and the systems approach are complementary strategies. They are now increasingly being adopted into the way corporates think (see use-case (i) below) and how global regions regenerate (see use-case (ii) below). But what does good look like? Are there lessons to be learned?

Use cases

I. Big Corporates’ Intrapreneurship and Entrepreneurship: What does good look like?

Over the last five years, an increasing number of companies from a wide range of industries have begun to experiment with novel collaborative ways of how they do business and even think – from researching new products to re-configuring how they approach business. Through open labs these businesses can form external relationships in order to co-create with others, enlisting expertise and capabilities outside the company. This allows cross-fertilization from other business models and technologies, not to mention opportunities for cost saving and minimizing the chance of making expensive mistakes. Labs, innovation gateways, design spaces, and accelerators have become a popular way for companies to innovate and re-innovate their business models, product markets, and networks. They come in many guises – although heterogeneous, all are recognizably new forms of open collaboration. But how to do openness in an era of uncertainty?

Big Innovation Centre has blueprinted an Internet Tool which is able to develop typologies of labs, design how openness is conceived, and how financial paybacks should be calculated, exploring ‘what good looks like’ in the many types of labs:

Discussion:

  • But what does good look like?

II. Economic and Technology Development Zones in Britain: What do we have and what do we need?

Transforming our regions and our supply chains to become innovation hubs like Silicon Valley, Boston or Bangalore is a major aspiration for the United Kingdom. There are global examples of what works. Whereas Silicon Valley and Boston developed with close links to world class Universities, Bangalore developed with close global supplier links to Silicon Valley until it became a thriving hub in its own right.  Einthoven, located in a much smaller provincial part of Europe, took a different route with Philips Electronics (a big corporate) as the hub – but with a good-enough local university and looking to outsource IP and technology to an innovative supplier network. Philips Electronics crowded in expertise from world-class academics – often created a link to the local university - and opened space for entrepreneurs to co-create with them locally. They invested in new buildings and converted outdated factory space ‘not fit for purpose’. All the approaches created opportunities for the local regions to upgrade. However British regions have few comparable assets, nor have our own efforts so far have shown much success.

China has taken a different, more systemic approach – what it characterizes as an ‘Opening up of the system’ approach for regional and economic development, transforming regions and cities with high-tech clusters, industrial parks, and taken millions of people out of poverty. Big Innovation Centre’s CEO visited five Chinese regions and believes there are lessons to be learned.

Copying what works in China?

If we adopt a Chinese approach to the Northern Powerhouse and the Midlands’ Engine, as British Economic and Technology Development Zones, what do we have and what do we need?

Borrowing from the Chinese ‘Opening up of the system’ approach, we will map the same categories and diagnostic tools- especially the data - for the Northern Powerhouse and the Midlands Engine as the Chinese use.  We will research, building on work with our partners, what a British variant of the Chinese economic and technology system model might look like – and how it could be developed given the two regions’ existing assets and what would need to be created to reproduce the Chinese approach.

‘Opening up of the system’ approach

Using the Chinese methodology we propose an ‘Opening up of the system’ for the regional and economic development of the North of England and the Midlands. This requires the building of a sound innovation ecosystem in key areas. Note the emphasis on systems:

  • Modern industrial system (e.g. big industries, emerging industries, related: what is unique/special about the regions. 
  • Innovative start-up system (e.g. birth and grow of firms or lack of)
  • Entrepreneurship innovation talent system (e.g. university, entrepreneurs, areas of talent)
  • Capable global system (e.g. any global links or not, export, outsourcing, insourcing, foreign direct investment)
  • People’s livelihood system (e.g. unemployment, living standard, Jobs: Employment security of the whole region, Access to culture and education, infrastructure: International schools, hotels, shopping, and entertainment)
  • Modern urban and regional system (e.g. transport, buildings and land-use, sustainability)
  • Modern management system (e.g. intellectual property right agents, consultancy agents, specialized banks)
  • Regional demonstration system (e.g. prototyping zones, museums, expo-centres)


OPENING UP THE SYSTEM: DEMONSTRATION OF THE USE OF ECONOMIC DATA USED AS DIAGNOSTIC TOOLS

  • How does the Northern Powerhouse and the Midlands Engine currently look in the context of these variables? What needs development?
  • Benchmarking and “achievements from system construction” (as the Chinese calls their key performance indicators) will be developed from these categories.

EXAMPLES OF “ACHIEVEMENTS FROM SYSTEM CONSTRUCTION”

The success of this type of systems approach is also noted in a new book “The Smartest places on earth – Why Rustbelts are the emerging Hotspots of Global Innovation (by Antoine van Agtmael and Fred Bakker)

Central catalyst

The Chinese economic and technology development zones have a central catalyst, located in a location which features:

  • CULTURAL advantages (strong history)
  • LOCATION advantage (proximity)
  • HUB advantages (airport, highway, railway, sea ports)
  • PLATFORM advantage (special support zones, tax-advantage zones)
  • INNOVATION advantage (a place with proven innovative capability)

CENTRAL CATALYST: FRAMEWORK FOR LOCATION OF CENTRAL CATALYST

Is there a natural central catalyst in the Northern Powerhouse and the Midlands Engine, and what does it need to excel?

EXAMPLES OF ECONOMIC AND TECHNOLOGY DEVELOPMENT ZONES DESIGN WITH CENTRAL CATALYST

Lessons to be learned?

Lessons can be learned from the Chinese approach. A quick glance at how the Northern Powerhouse initiative has been planned throws up a few issues:

  • Imbalance: £6bn of the £7bn is about roads. 
  • Scattered: The initiative supports disconnected local science ambitions, 
  • Inward facing: The initiative is inward facing not taking advantage of global opportunities 
  • Lack of vision: The entire initiative lacks a vision 
  • No central catalyst: it is hard to see how it can catalyze regional development

Discussion

  • Which local and national data should we research to measure (or apply to build) regional innovation systems in the UK using the Chinese Opening up the Systems Approach?
  • Who can provide the data?

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