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Innovation policy and place: a critical assessment

DEPARTMENT OF LAND ECONOMY SEMINAR SERIES
When Jan 30, 2019
from 04:00 PM to 05:00 PM
Where Mill Lane Lecture Theatre Room 4
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Speaker: Michael Kitson, University Senior Lecturer at the Judge Business School, Cambridge.

About the speaker

University Senior Lecturer in international macroeconomics at the Judge Business School, University of Cambridge; Assistant Director of the Centre for Business Research, Cambridge; and Fellow of St Catharine’s College, Cambridge.

Abstract

A focus on innovation in now a central feature of the re-emergence of place-based industrial policy in the UK and the EU. Yet, much of the focus is narrowly confined, and potentially distorted, by messages coming from science and from economics. From science, the foci are investing resources in STEM (Science, Technology, Engineering and Mathematics) and improving the commercialisation of science through technology transfer (often through, patents, licenses and spin-outs). From economics, the focus is on the operation of markets and thus the policy instruments required when markets may ‘fail’. In the realm of innovation, private firms may not invest in a level of R&D that is socially optimal, therefore this ‘failure’ has to be rectified by government intervention through publicly funded R&D or subsidies or tax-breaks. Although science and R&D are important - they are only parts of the innovation process. It is important to stress three points. First, innovation take place within a multi-level system and a preoccupation with ‘markets’, where the price mechanism allocates scare resources, may ignore the important links, connections and feedback loops within the system. Second, local innovation systems will vary and will reflect different structures and trajectories of development. Third, R&D and technology transfer tend to be associated with the generation of innovations and not the diffusion and adoption of innovations. Since the industrial revolution, the diffusion of innovation has had a much larger impact on economic growth that the generation of innovation as ‘innovation-using sectors’ are much larger than ‘innovation-generating’ sectors. Innovation policy at the local level requires a both a wider perspective to encompass the variety of features of an innovation system; and a narrower perspective to focus on the specific innovation needs of a region or local area.