After the end of the TCI-Conference: Time to catch up! You will find more information here soon!

I think I am not the only one who feels quiet exhausted after 4 days of cluster and innovation discussions. It was a great time but after the end of the TCI everybody needs a weekend to relax and get the thoughts and impressions settled. It is at least like that in my case. There is still a lot I will write about and interviews I have done which are not on this blog yet.

In the next days I will still write about

• the issue of language and terminology we use as practitioner

  

  

  
  

  

  
  

  s on the topcis of cluster development and innovation promotion and how it distracts us from the main important aspects

• The TCI Cafe we facilitated and its outcomes and insights
• the impressive thursday evening boat trip and its innovative way of using story telling to get peoplein a state of emotion
• a reflection on the main important TCI insights from my point of view
• My worries and recommendations for the next TCI Conference in Dubai. Just one comment on that: please use the innovative approaches of facilitation we experienced in this Conference and do not go back to the traditional style!

Additionally to these articles you will soon find some further interview recordings here with

• Dr. Göran Lindquist, the co-author of the Cluster Greenbook: in the interview Lindquist will reflect with me about the cluster development discussion since the publication of the Greenbook in 2003
• Madeline Smith (see article and speech recording below), TCI board member, about what she means when she talks about “breaking mental models” and following a more system thinking approach to cluster development
• Ifor Ffowcs-Williams about cluster facilitation and its difference to cluster management as well as the challenges we have to face in the future

I wish you a relaxing weekend! Come back to this side and let me know your comments!

P.S.: I do not know if you know: at the webside “Learning clusters” you can watch many live video recordings. Have a look under the link “Conference programme” and under the “main conference” according to the different days.

“Did we lost the market out of perspective while promoting innovation systems?”

In quite not few of the presentations and inputs during the Conference there is no word mentioned about the challenges of businesses to stay or  become more competititive. A lot has been said about policies and strategies on innovations, concepts, research projects and the new design of funding programmes at the EU-, national and regional levels.  If we brainstorm e.g. in workshops on main criteria of sustainable competitiveness only 2 from 35 answers are related to markets. One might get the impression that we feel quite comfortable when clustering ourselves together to reflect about innovation while loosing the aspect of competitiveness out of sight.

This should be a provocative statement and also understood accordingly. Nonetheless, my impression is that the more we talk about radical, incremental, process, product and system innovation it seems that we loose sight of the market. Although technology-push activities are necessary in some aspects, the pull elements are nearly not mentioned anymore in this Conference. Some years ago we very much

• discussed the logics of regional economic development and the driving importance of demand conditions (see e.g.Porters diamond),
• and wanted to understand and promote the national (or global) value chain systems and its business relations between suppliers, producers, big buyers and SMEs  and customers (see e.g. Porters five forces).

It seems to me that while focusing on the discussion of innovation and R&D promotion, the market falled off the agenda somewhere in between the whole complexity. This is quite contrary to the findings of international studies. Let´s just mention 2 main findings from the European Commission  and UNCTAD reports. The presentation of Mette Quinn (see workshop 4 on Wednesday) on creative industries and service clusters in Sweden points out that most of the innovation emerges inside businesses due to their intensive learning processes from customers as well as from creative ideas of their own employees.

This is a valueable insight for the service sector of a very industrialized country. If you look at the latest UNCTAD LDC technology report you see that most of the innovation learning processesof  SMEs in less developed countries also come from their customers, suppliers as well as other producers.

R&D in industrialized as well as developing countries play still a very very marginal role in the promotion of innovation. Maybe there are trickle-down effects. For sure they are somewhere. Nonetheless:, isn´t it time to consider these real innovation realities more intensively, approaching the analysis of innovation systems again much more from the business perspective.

Michael Enright said in a workshop session: “85% of real innovations are coming from businesses and are demand-driven. 99% of the innovation promotion programmes are focusing on technology-push approaches.”

This is an astonishing imbalance, is it not?

“Dixon: We talk about communication. How many businesses are in this hall?”

How many real business companies involved in cluster initiatives are in this hall?, asked Patrick Dixon from Global Change Ltd. straight to the audience. “No, no, I do not mean the consultancy businesses who try to get some contracts during these days!”- “Nobody, ups! But do you not want to sell your regions to them, that they come to boost innovation in your localities? “

When the world changes fast, keep looking further ahead” was the title of his lively, comedy and preacher style speech on the 3rd day plenum session.  If you have not been in the session, have a look at you tube to get an impression of Dixons innovative style of presentations on different business topics. Or you look and listen to a live video recording from the session here.

According to the Conference workbook Dixon is one of the leading international business consultants of multinational companies. Much more important is that he provided an insight into the business and change realities he works in. And if he talks he likes to put the finger into the wound: “The point why businesses are not here is: they just do not get your messages! (see Calvin comic below)

Dixon is not only a good performer while running through the audience, changing slides like a maniac to reap burst of laughter form the listeners. 100s of  nodding heads in the hall demonstrated that he speaks out what many others think but cannot say loudly in their daily work life.

For me the main message he came up with, although not new but in a very straight way, was this one: “Businesses are the ones who are most innovative. And if we do not understand and talk to businesses, how will we understand innovation?”

Clusters are not made by governments or public bodies, and we have to consider that in our daily life. What then is our role? We need to understand better the complexity of business processes and the changing environment in which businesses operate. Accordingly we ourselves have also to reflect about our promotion approaches, communication and facilitation formats with businesses.

“How to promote clusters based on more than a “snap shot insight” of business reality?

Persons who want to promote innovation have to be innovative in their approaches themselves. And they have to be open put into question their own thinking and action, ask further questions, look for new answers and new ways of doing things. And last but not least they have to be able to reflect about their own role as “change facilitators”! The 3rd day of the TCI Conference focused very much on the question of how we as practitioners learn, how we interact and with whom do we interact while working?

“What are our guidng mental models that drive our initiative and our work?”, asked Madeline Smith from  Ekos Ltd in her great morning input. Often cluster practioners and policy advisors are very much driven by their own mindset of how the innovation system should be set up, should work and how we should intervene.  “We need to change” says Smith, “challenging our cognitive barriers”. Her insights were related to her Scottish Enterprise study “Exploring cluster dynamics using the system thinking methodology” in which she empasized the need  for a more reflection loop-oriented intervention approach (see graphic).

In this study and in her speech she emphasized an issue which can also be seen as a golden thread of comments during the workshop discussions here at the Conference: “One of the issues encountered by many public sector bodies when developing a clusters strategy is that much analysis of the industry sectors only gives a “snap shot” of how the cluster operates.”

So how can we encourage learning in our cluster and in other economic initiatives  that go beyond a snap shot perspective?, is a key question that has not been sufficiently tackled in this Conference. Smiths answer: “Start with pilot projects close to businesses, get different perspectives involved,  work with a multidisciplinary and creative team”. And listen more to businesses, because they are the drivers of innovation!

You can download the speech of Madeline Smith here.

2nd day of TCI: from clusters to innovation systems and the increasing importance of trust!

The second day of the TCI Conference can actually be seen as the official start. Whereas I asked myself yesterday where the 350 participating experts might be, today it became obvious that they really arrived. And it was an interesting start.

Further shift from cluster debate  to innovation systems provide new insights

The presentation of several cluster case studies at the second day did not really provide many new insghts. But what can be observed during the last TCI conferences and even more at present is the shift of discussions towards innovation systems. Most of the discussions were based on national innovation systems as well as transnational innovation systems (see e.g. Baltic Sea initiatives) than regional or sectoral approaches.

Interactive elements get higher attention in the  Conference ´09

In difference to the earlier conferences which were very much input and presentation-driven, the organisational team here in Finland involves more interactive elements. Small signs on the tables ask people to participate actively and prepare themselves with a key question they want to get answered during the Conference Additionally a cluster lounge has been set up where experts can meet each other on different topics and share concrete experiences in small groups. Tools like “cluster clinic” and  “learning journey” are on the aganda.

Facilitating trust promotion between public and private sector becomes even more important than in the past

One main insight for me from the day: Trust is still on the agenda and gets addressed nowadays in a more systemic way The Academic summit provided different research insights in this regard. One of them was of special interest: The role, nature and evolution of trust in innovation ecosystems, from Kirsimarja Blomquist (downloadable here, in blue box). Is this topic not old enough to be left out? No it is not and maybe has been tackled only superficially in the past.
Blomquist demonstrated that the determinants of trust in innovation networks have to been analyzed from a more systemic perspective. She emphasized especially 2 critical factors, which were marginalized in the discussions during the last years but underline the soft but critical aspects of innovation systems:

1. the individual capacity of people involved (micro level) to trust and the “willingness to be vulnerable” as one key human quality for drivers of change and a prerequisite to create interpersonal and organisational trust
2. the importance of societal and cultural trust at the meta level which enhances again the individual´s propensity to trust as well as the interpersonal, interorganisational and community levels of trust

Although the question on cultural heritage as well as individual elements of trust have been mentioned in the industrial district discussions in the 1990s, Blomquist demonstrated again its crucial importance as well as the lack of intervention approaches to address these factors. Whereas the systemic competitiveness approach has addressed these meta and micro elements of change of human and economic systems, the innovation system debate has marginalised this aspect during the last years and focused more on the macro level policy discussions and institutional meso level .

Need for better change facilitation to overcome divide between public and private sector

It is crucial to consider again more into debt the topic of trust especially to overcome a further divide between the public and private sector in the context of the promotion of innovation systems. Do we not often as consultants and researchers loose the contact to our target group, the businesses? Are we not often driven by our meta ideas when we discuss about e.g. radical innovation requirements without being really entrpreneurship-driven ourselves? Do we not often like to talk about networks without really understanding the business insights of the companies?

What we will need is a closer sensitivity about the business rationalities, our own mindset and interests that drive us as stakeholders involved. Additionally we need more facilitation knowledge on how to tackle the micro elements and meta elements of trust.

Day 1: Cluster Tours and audio recording with Finish Minister of Economic Affairs: “Our main challenge is to commercialize our knowledge!”

During the Tour A on spearhead clusters like bioenergy, machines and equipment, and housing construction the participants were able to meet the Finish Minister of Economic Affairs, Mr. Mauri Pekkarinnen. In his short speech he gave a good overview about main success elements as well as challenges of the Finish innovation policy and practice.

The recording of this speech can also be downloaded here (see right blue box with different recordings).

In his  speech Mr. Pekkarinen pointed out the history of the innovation policy in Finland since the beginning of the 1990s. At that time a strcutural crisis demonstrated the need for change. The decision was made to focus on key knowledge-intensive sectors related to comparative advantages of the country. Between 1991 and 1994 Finnland increased its R&D spending about 70%, opened the telecom market, created a national education and innovation council and in parallel promoted bottom-up expertise programs . In the last decade Finland was able to demonstrate remarkable growth rates between 3 to 4%. During this time several companies in the wood and ICT as well as paper sector became world leaders.

At present Finland provides the 3rd highest GDP spending on R&D after Sweden and Israel. But what comes after R&D? How to assure that knowledge creation also is demand-driven?

Mr. Pekkarinen pointed out that the strategy to focus on specific areas of competence was successful in Finland. Nonetheless the main challenge of the country will be to commercialize the created R&D knowledge. Mr. Pekkarinen:  “We have to catalyze our knowledge more effectively into national products on the market. Until now the R&D is mainly public sector-financed. We will need to see that our knowledge-investments are also recapitalzed through more private sector success in the national and international market.”

With this comment he closed his speech emphasizing the need for an an even more demand and applied-oriented approach of innovation in Finland.

What is for you the main success criterion to promote private sector-driven innovation without getting lost in R&D?

This question is one we as mesopartner often ask our partners when we want to foster a more business- and demand-driven approach to innovation and cluster development.

The question is related to one of the biggest challenges in cluster and innovation policies: how to undermine a too much supply-driven and public sector initiated approach. One´s you start with it you run into danger to create high expactations. At the same time you might loose contact to the real demands of businesses. This question is for us also the golden threadof this blog. We would like to come always back again to this question, and comment on it while listening to discussions and presentations during the Conference.

Do y0u already have an answer for yourself on this question? Please let us know!

Private Blog about TCI Conference on http://tci2009.wordpress.com. Please join!

“Learning Clusters” is the topic of the 12th TCI Global Conference  on Clusters and Innovation Policies which currently is held in Jyväskyla. It is a great opportunity to use also open source innovations like blogs to discuss not only during the Conference itself but also exchange comments, questions and thoughts in this blog. Innovation drives innovation. In this sense: Let´s hope that there will be a wide participation in this blog exchange.

This is a private blog for the TCI Conference set up by Frank Waeltring. So nobody is to blame for it apart from me.