GLOBELICS Academy 2004 Lisboa 3 June 2004 Technological
GLOBELICS Academy 2004: Lisboa - 3 June 2004 Technological Change and the challenges for development: building on the experience of less favoured regions Manuel Heitor in collaboration with: Pedro Conceição and Paulo Ferrão CENTER FOR INNOVATION, TECHNOLOGY AND POLICY RESEARCH, IN+ Instituto Superior Técnico, Technical University of Lisbon http: //in 3. dem. ist. utl. pt
What is this lecture about? . . . To extend human capability through innovation and competence building, with infrastructures, incentives and institutions fostering social capabilities to comply with distributed knowledge bases and an acelerated rate of technical change
Structure of the Argument 1. The perception today: a diversified context • Technical Change: complexity and uncertainty • Distributed knowledge base • Increasing reliance on market-based mechanisms to promote innovation 2. LFR´s - Beyond Infrastructures? • Building evidence: Material Flow accounting • Implication 1: Infrastructures and sustainability – which opportunities for innovation? • Implication 2: Infrastructures and urban concentration – which routes for innovation? 3. Knowledge and Learning: understanding knowledge economics 4. Policy implications: innovation and competence building
Technical Change: materials Source: Ashby (1998); IPTS(1999) 10 000 BC RELATIVE IMPORTANCE GOLD 5000 BC COOPER 0 BRONZE IRON 1000 1500 1800 1900 METALS POLYMERS 1980 AL-LITHIUM ALLOYS DUAL PHASE STEELS COMPOSITES RUBBER WOOD SURFACE ENGINEERING CERAMICS BAKELITE 1000 1500 1800 HIGH MODULUS POLYMERS COMPOSITES CERAMICS REFRACTORIES 0 ALLOY S HIGH TEMPERATURE POLYMERS CERAMIC EPOXIES COMPOSITES METALMATRIX COMPOSITE POLYESTERS S KEVLAR NYLON PORTLAND CEMENT 10000 BC 5000 BC TITANIUM ZINCONIU M ETC POLYMERS CONDUCTING POLYMERS SUPER ALLOYS CEMENT 2020 NEW SUPER ALLOYS DEVELOPMENT SLOW MOSTLY QUALITY CONTROL AND PROCESSING PAPER STONE FLINT POTTER T GLASS 2010 STEELS LIGHT ALLOYS BRICKS (with STRAW) 2000 MICROALLOYED ALLOY STEELS IVORY 1990 METALS GLASSY METALS CAST IRON SKIN FIBRE GUMS 1960 1940 FUSED SILICA 1900 SUPERCONDUCTO RS TOUGH ENGINEERING CERAMICS CERMET S 1940 1960 1980 1990 2000 2010 2020
Technical Change: perspectives The Convergence: telecommunications and computers. . . The QUESTION : scope and scale TECHNOLOGIES • more technologies to produce each product PROCESSES PRODUCT TECHNOLOGY • more products produced from a given technology Source: von Tunzelmann (1999)) PROCESSES PRODUCTS
Emerging interactions. . . Source: BIPE to from information technologies materials biotechnologies energy information technologies Telematics Automation Computers Semiconductors Superconductors Biosensors Biochips Photovoltaic applications materials Computer based design of new materials New alloys Ceramics and composits Bio-leaching Biological ore processing Power lasers biotechnologies Instrumental analysis of dna sequences Membranes Biocompatible materials Recombin. DNA New drugs Enzymatic Synthesis Batteries Pacemakers Artificial Heart energy Supervision of energy processes Robotics Security systems Photovoltaic materials Fuel cells Superconductors New energy biomass New reactors Nuclear fusion
The CONTEXT Nathan Rosenberg (2001): “uncertainty in the realms of both science and technology. . . have enormously important consequences and a main concern is how organisations and incentives migth be modified to accommodate these uncertainties. ” Fonte: OECD(2001), “Social Sciences and Innovation” Chris Freeman (2001): “There is an irreducible uncertainty about future political, economic and market developments. . , technological innovations may actually increase it, since they add to the dimensions of general business uncertainty, the dimension of technological uncertainty. ” Fonte: SPRU (2001)
The focus: less favoured regions …Why? • Low value, Low networking. . . but high rate of change • Peculiar institutional framework. . . • . . . and social dynamics! A specific issue: • “With some notable exceptions, the regional developmment debate in LFRs has been dominated by exogeneous models to such an extent that development tends to be conceived as something that is introduced to, or visited upon, less favoured regions, from external doors… • …this kind of regional policy did little or nothing to stimulate localised learning, innovation and indigeneous development within LFRs”, Henderson & Morgan (1999)
The perception today: a diversified context The ‘globalizing learning economy’: – a world characterized by accelerating technical change To compete in such a world it is important: • to go beyond infrastructures, and access to knowledge… • but, it is even more important, to be able to learn as old competences become obsolete, and this requires adequate incentives and a dynamic institutional framework The challenges: • How to manage the risks of being innovative? • Which Networks to access to distributed knowledge bases ? • How to foster learning as moving along a given trajectory and capability to cope with the emergence of new trajectories? • How clusters can remain open to what is going on outside the cluster and how to stimulate radical change when this is necessary?
to go beyond infrastructures: Building evidence: Material Flow accounting
Method: Material Flow Analysis. . . Why does it matter? Material use leads to environmental damage “One half to three quarters of annual resource inputs to industrial economies are returned to the environment as wastes within a year”, The weight of nations, WRI (2000) International trend: Increase material productivity by a factor of: 2 in global terms 4 in next 20 to 30 years (EUROSTAT, 2001)* 10 in next 30 to 50 years (Factor 10 Club, 1995)** Considered in national policies (e. g. The Netherlands, Austria; Kuhndt and Liedtke, 1998)*** Supported by European Union (factors 4 and 10; Reijnders, 1998)**** * Economy-wide Flow Accounts and Derived Indicators. A Methodological Guide ** Carnoules Declaration *** “Translating a Factor X into Praxis”, in Third Con. Account Meeting: Ecologizing Societal Metabolism **** “The Factor X Debate: Setting Targets for Eco-Efficiency”, J. Industrial Ecology, 2(1)
Material Flows accounting (MFA) Adriaanse et al. (1997)* Aggregation by mass Resource Flows: The Material Basis of Industrial Economies
DMI vs GDP: the International trend (1988 -1997) Adapted from Bringezu and Schütz, 2000, Total Material Requirement of the European Union, European Environment Agency, Technical report No 55.
Looking at sustainability: Decomposition of DMI variation Canas, Conceição and Ferrão(2002) Identity between Sustainability and Production (Malaska, 1998)*: Sustainable development associated with decreasing material flow Contributions calculation (Chung e Rhee, 2000)**: Logaritmic Mean Divisia Index (LMDI) Method * Moll, 1999, Reducing Societal Metabolism. A Sustainable Development Analysis ** A Residual-free Decomposition of the Sources of Carbon Dioxide Emissions
Decomposition of DMI variation International disaggregation Employment in construction
A case study: Portuguese DMI Canas, Conceição and Ferrão(2002) Imported DMI: Mineral Products (includes fuels and ores)
Implication 1: Infrastructures and sustainability …which opportunities for innovation?
Testing a relationship: Innovation and sustainability What’s the relevance of the technological innovation? The technological innovation contributes to the economic growth and allows the use of new processes and products that cause less environmental damage or use resources more efficiently. What’s the relevance of this theme? If the kuznets Hypothesis is valid, then the reduction in environmental damages can be achieved as a consequence of the natural economic development process, that bases largely in the adoption of new production and consumption technologies. The result in terms of public policies is that the stimulus to the innovation can have positive consequences in the reduction of the environmental damages.
Innovation and sustainability : the approach. . . Conceição, Heitor and Vieira(2002); Canas, Conceição and Ferrão(2003) The Porter Hypothesis: environmental regulation may lead, in the short term, to additional costs at the firm level, but will give rise, at the long term, to the adoption of new technologies and innovation, leading to growth Static model Dynamic model The Environmental Kuznets Hypothesis: Economic growth and environmental degradation are related through an “U” inverted curve • How far does this applies to Material Flows ? GDP
Testing the “Porter Hypothesis” Data from CIS II (1995 -1997)- Portugal Environmental concerns as drivers of innovation Important Low-technology Low productivity High Exports Share Not Relevant Small size Low productivity Low Exports Share Large Size Group High productivity High Exports Share High-technology High productivity Low Exports Share % of innovating firms
Testing the “Porter Hypothesis” Qualitative analysis: • Environmental concerns stimulate technological innovation • Relevant role of networking with Technological Centres and of the industrial associations • Effectiveness of the innovation is guaranteed through the involvement of all the value-chain: the need for networking supply chain • Consumer Pressure = Fundamental Factor toand implement SD management Quantitative analysis Industry Dimension Productivity Exportations + + Services + -
DMI modelling: Aggregated Data Canas, Conceição and Ferrão(2002) Support for inverted “U” EKC: Model results for observed GDP per capita country control Model 1 ** Model 2 ** country and year control GDP per capita (1000 $USA - 1990 prices and PPP ) Maximum DMI per capita: 21940 $USA e 22293 $USA * Statistical significance at 1% level * R 2=0, 27 Random effects * R 2=0, 98 Fixed effects
Environment and Innovation Research Conclusions and Policy Implications Canas, Conceição and Ferrão(2002) 1. Industrialised Economies (1960 -1998): – Aggregated data supports Environmental Kuznets Curve – Evidence of GDP per capita relative dematerialization trend ? • Evolution driven by overcome of infrastructure needs • External events dependence (e. g. energy crisis) • Influence on economic structure of specific sectors 2. LFR´s: the case of the Portuguese Economy (1960 -1998): – Increase in material use and intensity: Growth since middle 80’s can be due to infrastructure needs (highways, wastewater treatment facilities, Vasco da Gama Bridge) – Based in non renewable and building sector linked materials
Implication 2: Infrastructures and urban concentration …which routes for innovation? Source: Kostof, S. (1991) “ The City Shaped: Urban Patterns and Meanings through History”.
Urban vs. Rural Population
Urban population in cities with more than 750000 people (Forecast for 2015) Source: United Nations - Department of Economic and Social Affairs, (2002), “World Urbanization Prospects: The 2001 Revision – Data Tables and Highlights”, http: //www. un. org/esa/population/publications/wup 2001 dh. pdf
A case study: Portugal
Source: United Nations - Department of Economic and Social Affairs, (2002), “World Urbanization Prospects: The 2001 Revision – Data Tables and Highlights”, http: //www. un. org/esa/population/publications/wup 2001 dh. pdf
The “Donnut” effect Emerging urbanization trends: Increasing urban population, but reduced urban density Our research hyphotesis: The progressive integration of mobile ICT´s with sustainable mobility equipments and concepts will facilitate improving well being in urban regions if adequate incentives and institutions are adaptatively implemented through a policy learning process
Digital Cities: which rational? Source: Woolman, M. (2000) “Digital Information Graphics”
A case study: Kyoto Digital City Launched by NTT and Kyoto University in 1998 Relaunched as Digital City Kyoto Experimentation Forum in 1999 34 services divided in four categories Information Community Showroom Laboratory Personal Pages Geo. Link 3 D Kyoto Source: Ishida, T. (2000) “Kyoto Digital City”
A case study: Amsterdam Digital City Electronic space for political discussion and participation 10, 000 registered users in the first weeks Quickly transformed The demand for these services declined steadily Most important assets discontinued (content production) or sold (school portal in 2000. Source: Besselaar, P. (2000) “Amsterdam Digital City”
Further evidence: network readiness Source; OECD (2000). Information Technology Outlook, Paris: OECD. Source; The Global information Technology Report 2002 -2003: Readiness for the Network Society, World Economic Forum • LARGE growth rate of ICT expenditure ( 1992 to 1997) • A cluster of countries where the effect of increasing GDP on network readiness is less pronounced and other factors, namely at institutional and contextual level, have been shown to particularly influence country’s competitiveness
Aveiro 1998. . . Bragança 2000 Bragança 1999 Marinha Grande 1999 The “first generation” of digital cities: Some facts about Portugal
Framework of Analysis
A case study: the region of Alentejo Source: http: //www. alentejodigital. pt/
A system study: Alentejo Digital “Ilities” have not been considered. . .
But… Communities of Practice have been established Driving factor Scientific Education / Training Public Health Sample Experiences Biorede - Biology knowledge network about local biodiversity, molecular biology and estuary ecosystems launched at Aveiro (www. biorede. pt ) “Engineering in Portugal”, providing historical data and information for Basic and Secondary Schools, as well as university students (http: //www. engenharia. com. pt/) Health information and communication network of the Bragança Digital City extension services (www. espigueiro. pt/servico_cooperativo/ servico_coop_puh. html ) Water quality monitoring and public diffusion system (www. simoqua. pt ) Remarks Website developed and managed by Research Centre Learning materials and information exchange between experts, teachers and students; Website managed by Research Centre Portable computers and Internet access to foster the communication and information exchange between doctors and patients Managing Raise public awareness about Public Risks water quality, flooding and other public risks Marinha Grande and Aveiro clearly shows the important mutual relationships that specific Corporate Marinha Grande local-industry Extranet managed by project-based communities have on the facilitation of network societies, but also the fact strategy and (moulding, plastics and glass) network Technological Centre that the implementation of digital cities may significantly improve the efficiency of those competitiveness (www. marinhagrandedigital. com ) communities
Some Conclusions Value-based networks have the potential to make both public administration and markets more effective, which helps promoting learning trajectories for the inclusive development of society, …. . . but require effective infrastructures, incentives and adequate institutional frameworks; A continuous pubic effort is needed, as also a better understanding of the effectiveness of the mix of public support mechanisms and private incentives for the development of digital cities; In early stage developments, digital cities do require continuous support, together with adequate monitoring and evaluation procedures. Mobilization of the Information Society is one of the most critical factors to be considered in the design, implementation and exploitation of digital cities; Market mechanisms do not necessarily work at the level of the issues associated with digital cities, namely in less favourable zones. They require an effective mix of public support mechanisms that take a relatively long-term perspective Digital cities cannot be promoted independently of an innovation policy fostering capacity and connectivity
A city as a complex system: . . . which architecure? Source: Kostof, S. (1991) “ The City Shaped: Urban Patterns and Meanings through History”.
Source: Koolhas, R. (2000) “ Mutations”
Emerging Trends of Next Generation Cities… Layer of Analysis Infrastructure/access Content/ services Human and social Context From To Implications and requirements Conspicuous objects Invisible infrastructure Embedding ICT infrastructures in urban daily life, fostering human-centered systems Fixed access Roaming Competitive mobile services and improved regulatory framework for increased individual participation One-way distribution of information On-line collaboration and participation Specific knowledge of institutional and local contexts in order to help developing interactive contents Web functionalities Networked Activities New competences in content and services development, enhancing user activities and networks Technology supply Mobilization of users Mobilizing “change agents” to foster communities of practice, Co. P´s, and user involvement Standards Interoperability Building individual and social competences through knowledge-based adaptive human centred environments
FROM DIGITAL CITIES TO MOBILE REGIONS Diversity/complexity of information available Advanced Data services Descriptive contents Mobile Regions Typical/Plain Digital Cities Fixed Narrowband Density/Quality of access points Mobile Broadband
From Digital Cities to Mobile Regions Research Question: What critical factors enable a digital city to become a mobile region? What sort of public policies to promote these factors? Dimensions of analysis: Technological: understand what types of technologies need to be in place to support a mobile region and which players are willing/should provide it? Organizational: understand who are/should be the leaders for the transition and under what (business) model should they operate? Behavioral/Geographic: understand how the resident culture shapes the demand for elements of a mobile region (i. e, contents and services) and thus affects its development Others: think about other lines of research that need to be addressed in order to understand all the facets of this process
Technological Change: telecommunications
Technological Change: impact and questions. . . 1. Knowledge Diffusion • corporate competitiveness depends on innovation capacity • globalization has increased market demand on nre products, processes and services QUESTION: inovation/ adoption of new technologies? 2. Knowledge Creation • Increasing interdisciplinarity and complexity of the knowledge base • Significant contribution of technology for scientific development QUESTION: Which, and how to develop the scientific base? 3. Knowledge Transfer • the need to promote systems of education and training diversified QUESTION: Which education and training systems?
Knowledge diffusion: What can we learnt? Partnerships reflect that: competence is built over time through interactive learning demanding proximity and there are increasing returns in the production and use of knowledge - competence is localized – some of the knowledge is tacit and cannot easily be disentangled from the cluster - it is embodied in people, organizations and networks - Competence building should be directed to open minds to new trajectories - Therefore, the key to understand shared prosperity is a better understanding of learning and knowledge creation in the economy.
Knowledge diffusion: What can we learnt? Not everything is regional: …the national system of innovation • a national technological infrastructure that supports competence building in all kinds of firms • a social and legal system that creates trust and interaction among people: good elements in the system is not enough. Focus needs to be on the interaction between the elements. • a national action to foster public understanding of science, PUS, fostering “critical minds”. . .
Implication 1: Knowledge Production - an evolving scene. . . Traditional analysis CONTEXT specific community Emerging questions application SCOPE disciplinary transdisciplinary SKILLS homogeneity heterogeneity ORGANIZATION Hierarchical & Static (preserved) Taxonomy: Gibbons et al (1994) MODE 1 Transient & Dynamic (changing) MODE 2
Implication 2: Knowledge Production - Distributed Knowledge bases 1. An increasing number of sources of knowledge 2. A broad base of effective interaction: fostering multiple knowledge flows 3. Their dynamics lie in the flows of knowledge , which may not obey to national science policy 4. The number of nodes in the networks accelerates with time, being unaffected by existing institutional structures 5. Knowledge production exhibits heterogeneous, rather than homogeneous, growth Source: Keith Smith (2000)
Promoting Systems of Innovation and Competence Building: The Technology and Innovation gap… Clusters and INSTITUTIONAL NETWORKS to mediate: • mediate information exchange • knowledge creation • capacity for collective action • potential for interactive learning • efficacy of voice mechanisms
fostering innovation across diversity capacity 1. People 2. Knowledge 3. Ideas Connectivity (trade) Infrastructures Institutions Incentives
Knowledge for inclusive development… Most development programmes stand on their ability to build use knowledge for inclusive development and lack a relational infrastructure for collective action This requires a shift : • from state-led or market-driven processes, regardless time, space or milieu • to institutional perspective, looking at the quality of institutional networks and looking systematically to infrastructures, Incentives and Institutions
Which Public Policies? • supporting existing trends and relationships Keeping the trajectory. . . • renewal of existing trends and relationships …an important and somewhat more difficult role to play • creating general framework conditions that support the emergence of new clusters and relationships o The need to combine protection with competition! o The integration of knowledge institutions vs reliable knowledge • taking specific action to initiate new clusters …outside what policy makers can do ? ?
Policy Implications. . . Fostering strategies which promote the integration of policies, but also the diversification of actions: – Funding the quality of supply: knowledge production – Promoting new markets: knowledge diffusion requires: • time: long-term perspectives • context: specific sectorial and/or regional issues • value: promoting new market strategies but also: • people: new competences and social capabilities • scope: national and/or international
debate….
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