On the use of R&D statistics in a research and innovation policy context

How can research and innovation assessment be useful for librarians?

Last November I took part in a conference for Librarians arranged by Elsevier — the 6th Elsevier Nordic Librarian Forum — in Helsinki, Finland.

They asked me to talk about the use of R&D indicators in a policy context, which is — admittedly — one of my pet topics.

Elsevier actually made a write-up of my presentation for the January 2009 edition of their Library Connect newsletter, and, yes, i did get a chance to rewrite and edit it.

Here is the original slide show:

OECD’s report on Norwegian innovation reflects new view

In June OECD published its report on Norwegian innovation and innovation policy.

It has not led to much discussion in Norway or in Europe for that matter, but it should, as it presents a new and broader view of what can make a country innovative.

Those of you who know me and my blog, know that I have been concerned about the strong R&D bias of innovation policy development and in innovation indicators.

It is not that research and development is not important for industrial innovation. It probably is even more important than we previously thought. The point is that it is only one of many ways of learning. There is design, marketing, branding and organizational change, for instance.

Moreover, if you look at research in isolation, R&D does not only deliver ideas, inventions, products, processes and services. It also makes the companies and the research institutions better at finding, understanding and making use of knowledge and technology developed elsewhere.

The OECD report covers all these factors, and argues that “the Norwegian paradox” — i.e. the fact that Norway seems to invest little in R&D, but reports very high productivity and wealth creation — is not a paradox at all. Norwegian industry is mostly very knowledge intensive, even if the companies do not invest as much in R&D as a percentage of turnover as, let’s say, Nokia or Volvo.

I could not agree more.

I have made a presentation in Norwegian giving a summary of the report. I is included below.

There is nothing obvious about user interfaces

There is a general agreement that the windows-based user interface that was invented by Xerox, adapted by Apple and then stolen by Microsoft was a huge improvement vis-a-vis the cursor and text-based user interfaces of earlier computers.

Nowadays most people take the use of the mouse and idea of gathering files in folders as obvious. It was not.

During my days as a young civil servant in the Norwegian Ministry of Education, Research and Church Affairs (don’t ask!) in the early 1990’s I became one of the local “PC user helpers” and was given the task of explaining the concept of files and folders to people who had no idea of how a computer worked.

I remember that i found a card box and put paper-folders and paper sheet into those folder to illustrate the concepts of the hard drive (the box), the folder (the folder) and the paper sheet (the file).

If I didn’t many of them would just hit the save button, having no idea about where the file went. They were not stupid, but no one had explained to them the basic concepts of computing.

Very few user interfaces are obvious. The uses of a water basin tap, a radio volume button, or a screw driver are all learned behavior.

Anyone who have been to one of the modern “designer hotels” know this, as they suddenly find themselves unable to turn off the lights (where is that light switch?) or get running water in the shower (what button to push or turn, and which way?)

Here is a very funny video from the Norwegian Broadcasting Corporation that describes this dilemma in a wonderful way. It is taken from the show “Øystein og jeg” from 2001. Øystein Backe plays the helper from the help desk and Rune Gokstad is a desperate monk trying to understand how to use — a book! There are English subtitles.

(By the way, the book was not introduced in the Middle Ages, but in late antiquity.)

Eight challenges for future innovation policy development

What are the next challenges for innovation policy development?

I have had the pleasure of taking part in the annual meeting of Taftie , the Association for Technology Implementation in Europe. This is a club for industry oriented research councils and innovation policy agencies in (and beyond) Europe.

It was a very interesting conference program, and our Turkish hosts from TTGV did an excellent job. Still, I am not going to make an attempt to summarize the various interventions here.

I was asked to contribute to the session on global trends on innovation, skillfully led by technology policy veteran Juhani Kuusi. I presented what I believe to be some of the most important challenges for innovation policy development in the coming years:

  1. A shift from a technology push perspective to a vision of learning. The linear model is dead, but it won’t lie down, and I am amazed to see how many policy initiatives are based on the notion that most ideas and technologies are born in universities.
  2. A better understanding of innovation in resource based industries. There is nothing wrong with investing in high tech industries. Still, one should remember that “low tech” industries like agriculture, fisheries, wine production and oil and gas can be very profitable activities. Moreover, they are very knowledge intensive, even if the companies themselves do not invest much in R&D.

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The autonomous Nordic employee

Nordic success may partly be caused by the autonomy and learning capabilities of the employees

In my post on the Norwegian Puzzle – i.e. the fact that Norway is one of the richest and most productive countries in the world in spite of seemingly low R&D investments — I pointed out that there may be socio-cultural explanations for the Norwegian ability to innovate and modernize.

However, I also noted that we have no statistics that can underpin such arguments.

It actually turns out that we have!

In a chapter in a forthcoming book from Edgar (Caraianniss, Kaloudis og Mariussen 2008) Åge Mariussen of NIFU STEP will present research based on the European Working Condition Survey.

In this survey approximately 1000 employed or self-employed in each country are asked about their work (27 countries all in all).

They are for instance asked about who determines the pace of work.

“At this point,” Åge points out, “most Nordics (73% in Denmark, 78% in Norway) say that some external actor, such as the customer, determines their deadlines, as opposed to 68% in the entire EU27. In a somewhat more restricted form of work organization, which may have similarities to a hierarchical organization, one would expect the boss (a superior) to be monitoring progress.”

The percentage of Europeans reporting that their boss is monitoring their progress (35.7% in EU27, 47% in UK) is indeed much higher than in the Nordic area. (Sweden, 16.4%, Finland 15.5%.)

Åge argues that autonomous actors more easily will learning new things and apply new ideas at work, thus making the organization more flexible and innovative:

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Innovation in the public sector

In spite of what many believe,there is actually much innovation going on in the public sector.

The public sector is often described as “bureaucratic” – in a negative sense, as a slow moving and rigid hierarchically organized system, as time-consuming, oversized and expensive. This may indeed be the case in some instances.

Still, from my own experience — working in and for the public sector — I have not found proof for the assumption that public sector organizations in general are less innovative than the ones found in the private sector.

Public organizations may be innovative learning organizations

Public organizations are learning organizations with their own share of entrepreneurs and with directives regarding the need for organizational change.

Many ministries, public agencies and public service institutions make use of technologies or services developed and delivered by private firms and organizations.

Public institutions also face technological challenges where the solutions cannot simply be bought off the shelf, and are thus involved in technological invention and development.

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The electric car Th!nk and the timing of innovation

We all have a tendency to think that there is something inevitable about great innovations, but the fact is that timing is extremely important. If you launch a new invention, product or idea before the time is ripe, society will ignore it.

There may be several reasons for this:

Think from Norway

  • The necessarily infrastructure may be missing (hydrogen cars without hydrogen stations)
  • The ideological climate may not allow it (selling vodka in Saudi Arabia)
  • The entrepreneur does not have the marketing competences needed (marketing a high quality mobile phone with an old fashioned design to the in-crowd)
  • Lack of funding (do you know a good venture capitalist, and can you convince her?)
  • Bad luck (didn’t meet the right person at the right time)
  • etc.

The electric Th!nk car is an innovation that has failed repeatedly because of bad timing:

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On the rationale for innovation policy development

Learning and innovation is considered the engine of technological change and economic growth. Hence knowledge and innovation policies lay much of the foundation for the future welfare development of most industrialised countries.

It is therefore important that they develop sensible, coherent strategies in this area, as well as a set of policy measures that meet the specific needs of each country’s industry and social structure.

To develop such strategies, policy makers need a clear idea about how innovation takes place in society. And having taken part in research and innovation policy development both in Norway and in Europe for some 16 years, I know that that is not an easy task.

The systemic approach to learning and innovation

Innovation policies in the European countries are increasingly influenced by the so-called systemic approach to learning and innovation. It is also part of the policy discussions of countries as diverse as South Africa and New Zealand.

According to this view technological advance and competence building is characterized by constant interplay and mutual learning between different types of knowledge and actors, including firms, institutes, universities, sources of financing, relevant public agencies and more.

In short: The old linear model depicting science as the engine driving innovation is dead.

This new systemic view of technological change and competence development also forms the basis of, for instance, the EU Trend Chart on Innovation.

According to this way of thinking public authorities may encourage innovation by strengthening learning and by developing efficient networks for the distribution of knowledge and personnel. The general framework conditions for innovation, including taxation, physical infrastructure, public institutions, laws and regulations must also be taken into consideration.

This is why we now witness a new interest for the so-called third generation, “holistic”, innovation policy, i.e. an innovation policy that also includes policy areas that are not directly targeting innovation in companies as such, including educational policies and environmental measures.

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Understanding the Norwegian Puzzle

How can a country that seems to invest so little in research and development become one of the richest in the world? The explanation may bring us new insight into the relationship between learning and innovation on the one hand and economic growth on the other.

One great part of working in institutions like the research institute NIFU STEP and the Research Council of Norway is that you can discuss the phenomena of learning and innovation with a lot of clever people.

Over at NIFU STEP I had for instance a lot of interesting conversations with Johan Hauknes on the reasons for Norway’s strong economic performance. Another NIFU STEP researcher, Aris Kaloudis and I, brought important points from this discussion into the EU Commission Trend Chart on Innovation as early as in 2004.

Now I have the pleasure of taking part in intense discussion on this topic in the Research Council and with friends in the Innovation Norway agency. We are also discussing the matter with experts in the ministries, especially the Ministry of Trade and Industry.

Tekna, The Norwegian Society of Chartered Technical and Scientific Professionals, has invited Norwegian economists and innovation experts to discuss the matter in their “Kunnskapsdugnad”.

The OECD is puzzled

The recent OECD Economic Survey of Norway (Volume 2007/2 – January 2007) was the first of its kind with a separate chapter on innovation. This chapter followed up on a national discussion on what has been called “the Norwegian paradox” or “the Norwegian puzzle”. In the OECD report this was formulated in the following way:

“The Norwegian puzzle is that despite weak innovation inputs and even weaker outputs, Norwegian per capital incomes are very high by international comparisons, even excluding oil earnings. Furthermore the level and growth of total factor productivity – TPF – has been respectable by international comparisons.” (p. 125)

The OECD commission points out that although measurement is incomplete, R&D intensity appears weak, patenting is moderate and business surveys report a limited interest for innovative activity: “Yet,” the report says, “the level of productivity is high in the mainland economy and its trend growth enviable, showing a capacity to absorb innovation spillovers and undertake organisational and managerial changes.”

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Inca Indian found in medieval grave in Norway

Sometimes even the most respected of newspapers may give you a story that is highly entertaining, but that nevertheless calls for some editorial discipline.

The Norwegian newspaper Aftenposten today reports that Norwegian archaeologists have found the skeleton of a a man that seems to be an Inca Indian.

The grave, which was found in connection with the excavation of the St. Nicholas church of Sarpsborg in the county of Østfold, also contained the remains of one more man and a baby.

“There is a bone in the neck [of the man] that has not healed,” Norwegian archaeologist Mona Beate Buckholm says, “and this is an inherited trait that is only found among Inca Indians in Peru.”

She adds: “This is a sensation!”

She is right about the sensation part.

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