METHODOLOGICAL DEBATE ON THE ‘REGIONAL INNOVATION SCOREBOARD’.
METHODOLOGICAL DEBATE ON THE ‘REGIONAL INNOVATION SCOREBOARD’.
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FIGURE 14 Substitutability between R&D expenditure and collaboration in the RIS
Ranking in accordance with the penalisation in business R&D expenditure and the degree of openness of the SMEs
Regional Innovation Scoreboard (RIS) Index Source: Drafted in-house based on European Union (2021b)
HIGH R&D/LOW OPENNESS LOW R&D/HIGH OPENNESS
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Although these results offer an initial approx- imation to the bottleneck problem, scientific research points to more specific issues behind assuming perfect substitutability between rel- evant factors in the innovation system. By way of example, we will focus on the relationship between two basic innovation activity inputs: business R&D expenditure and the degree of openness of SMEs to carry out innovation projects. The first of these was seen as key in explaining innovation since the late 1950s (i.e. the linear innovation model referred to in the introduction). The second gave rise, towards the end of the 1980s, to the idea that innova- tion is the result of a system of interconnected agents (Lundvall, 1992). These two factors are captured in the RIS through the percentage that business investment in R&D activities rep- resents in the region’s GDP, and the percentage of SMEs that work alongside other agents in the system on innovation projects. Underlying the concept of “innovation system” is the idea that knowledge must be supple- mented by collaborative networks in order for it to circulate. Even systems with relatively high R&D expenditures may perform worse than systems with lower expenditures supported by innovation networks that leverage the use of available knowledge. Freeman’s (1987, 1995) seminal work uses the comparative example of the former USSR and Japan, respectively, to illustrate this possibility.
Figure 14 shows that the RIS does not iden- tify significant differences between the two groups. These results are consistent with the idea that, in terms of the RIS synthetic index, the few collaborative networks (i.e. the lack of openness of SMEs to external knowledge) can be replaced with more business R&D ex- penditure. However, as we will see below, this apparent stability hides important complemen- tarity relationships that are neutralised in the synthetic index computation. (FIGURE 14)
The fact that collaborative networks (degree of openness) are key in complimenting R&D expenditure in order to ensure optimal system performance contradicts the assumption of perfect substitutability between factors in the RIS. In fact, this complementarity can be tested using the RIS indicators. We will see that the lack of openness of companies to external knowledge becomes a “bottleneck” for innova- tion systems, reducing the benefits of compa - nies’ investment in R&D. We will take two groups of European regions in two opposing extreme cases: • Low openness/high R&D expenditure: regions in the top 50% of regions with the highest business R&D expenditure, and in the top 50% of regions with the lowest percentage of SMEs collaborating with other agents. • High openness/low R&D expenditure: regions in the top 50% of regions with the lowest business R&D expenditure, and in the top 50% of regions with the highest percentage of SMEs collaborating with other agents. Each of these groups is made up of 30 regions. In other words, slightly over a quarter of Eu- ropean regions (60 out of 225) are in one of these two extreme situations.
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