How I teach the topic of innovation systems

One of my favorite subjects to teach is about the promotion of innovation systems. I love it because it combines abstract elements that most people grasp, and practical elements that most people enjoy. Most academic literature on innovation systems are quite abstract, and our approach to identifying ways to improve an innovation system from its current state is quite pragmatic. The literature on managing innovation is very broad and contains millions of tips, theories, myths – actually it is overwhelming for practitioners wanting to support industries, firms and organizations to become more innovative. Therefore I try to explain the principles of both innovation systems and innovation management so that people can re-organize and use what they already know, and know where to relate new knowledge that they may encounter along the way.

I typically start by laying some foundations, often using puppets, props or cartoons to make it slightly less serious (I use sheep characters, don’t ask why):

• The difference between innovation and invention must be clarified
• The effect of different competitive pressure on innovators and enterprises
• How knowledge is created in enterprises and organizations (and societies), and how this can be enhanced or inhibited (this is also a fun exercise)
• Lastly, an important foundation is a broader definition of technology that includes equipment, knowledge and organization. This definition goes beyond the knowledge of how to use some artifact, but includes figuring out how to build business value from capability, or how to translate market opportunities into process technology.

While most people intuitively understand that there are different kinds of innovation, most practitioners are surprised by how different product innovation, process innovation and business model innovation are. A great discussion usually takes place when people reflect on why business model innovation (Tim Kastelle states that it is easy but really hard) is really what hampers growth and productivity improvements, but how most industrial and innovation policies typically targets mostly product and process improvements.

Now that the foundation is in place, I typically move on to the more abstract issue of innovation systems. After explaining the definition (see the bottom of the post) that I like most, it is necessary to explain the importance of the dynamic between the different elements. It is natural to create checklists of institutions and actors and tend to forget that even in economic development weaker actors that interact more dynamically can trump first class institutions that are not accessible to most people that need support.

The importance of building the technological capability beyond the leading firms is important. I have written many posts about this so will not repeat this here, but for me the systemic nature of innovation and knowledge accumulation is critical. But typically we use 6 lines of inquiry to investigate how the dynamism in the system can be improved. There are four really important aspects which include:

• The innovation capability and practices of enterprises
• Various formal and informal education institutions involved in creating and disseminating knowledge
• Technological institutions that disseminate knowledge
• Legal, socio-cultural and environmental issues that affects propensity to innovate

The agenda concludes with different ways practitioners and policy makers can intervene in the innovation system to improve the dynamics, the flow of information, the exchange of knowledge and the increased innovation appetite of entrepreneurs.

Duration

To present this agenda can take anything from 2.5 hours to three days. When the participants are experienced in diagnosing enterprises and public institutions, the exercises tend to be more meaningful and fun. When nobody in the room knows anything about the problems companies face on a day to day basis this kind of training is much harder. When I have more time then topics such as mapping formal knowledge flows, detecting unmet sophisticated demand, collaborating for research and development, etc can be included.

I have been presenting this session is various formats at international training events like our Annual Summer Academy in Germany, at different academic departments in universities. I frequently present this in some form to science, technology and industry government officials. In other occasions I have presented this to practitioners, development staff and even to the management of a university wanting to become more innovative itself.

The definition I work from:

The definition of innovation systems that I work from is the one of the earliest definitions on this subject. Freeman (1987:1) defined an innovation system as “the network of institutions in the public and private sectors whose activities and interactions initiate, import and diffuse new technologies.” The emphasis is mainly on the dynamics, process and transformation of knowledge and learning into desired outputs within an adaptive and complex economic system.

The textbooks I teach from:

My favourite textbook that I use when teaching at universities remains FAGERBERG, J., MOWERY, D.C. & NELSON, R.R. 2005.  The Oxford handbook of innovation. Oxford ; New York: Oxford University Press.

If I have more of a business management audience, then I prefer to use a book with more innovation and technology management tools in it such as DODGSON, M., GANN, D. & SALTER, A. 2008.  The Management of Technological Innovation. Oxford University Press.

Of course, this agenda follows the logic of my own book on the promotion of innovation systems that I have published!