INNOVATION, SOCIAL CAPITAL AND DEVELOPMENT

Alok Chakrabarti New Jersey Institute of Technology

[email protected] NEWARK 2006

FORMERLY, SLOAN INDUSTRY FELLOW INDUSTRIAL PERFORMANCE CENTER MASSACHUSETTS INSTITUTE OF TECHNOLOGY Supported by Tekes, Sloan Foundation, and National Science Foundation, Kauffman Foundation RESEARCH QUESTION HOW UNIVERSITY CAN STIMULATE ECONOMIC GROWTH

SOME QUESTIONS: 1. HOW CAN UNIVERSITIES INTERACT WITH INDUSTRY? 2. WHAT DO THE FIRMS EXPECT FROM UNIVERSITIES? 3. WHAT BROADER ROLE UNIVERSITIES CAN PLAY IN ECONOMIC DEVELOPMENT? 4. WHAT ARE THE KEY TO SUCCESS OF UNIVERSITY INDUSTRY INTERACTION? STUDY FOCUS

1. UNIVERSITY-INDUSTRY RESEARCH CENTERS IN THE US (22) IN THE US

2. REGIONAL STUDIES IN BOSTON AREA Southern New York State , AND IN MEASURES OF SUSTAINABLE SUCCESS

UNIVERSITY: KNOWLEDGE GENERATION EDUCATIONAL SERVICES (ENROLLMENT & GRADUATION)

ECONOMIC DEVELOPMENT: JOBS NEW FIRMS EXPANSION OF FIRMS TAX BASE INCREASE

DIMENSIONS OF MEASURES

INDUSTRY/UNIVERSITY CENTER EFFECTIVENESS

EXPLICIT KNOWLEDGE

GENERAL SUPPORT TACIT KNOWLEDGE I-U RELATIONSHIP TARGETED SUPPORT PEER INTERACTION

JT VENTURE INFORMAL INTERACTIONS CONSULTING INSTITUTIONAL ARRANGEMENT WHAT INDUSTRY IS CONCERNED ABOUT

TECHNOLOGY DEVELOPMENT RESEARCH, DEVELOPMENT & COMMERCIALIZATION

MANAGING RISKS FOR DEVELOPMENT RISKS OF PRE-COMPETITIVE RESEARCH, FLEXIBILITY AND IMPROVING LIKELIHOOD OF SUCCESS

HUMAN CAPITAL DEVELOPMENT TRAINING OF NEW EMPLOYEES, CONTINUING EDUCATION, CURRICULUM DEVELOPMENT

ACCESS TO EXPERTISE AND FACILITIES BUILD AND ENHANCE SKILLS AND KNOWLEDGE, USE OF FACILITIES

FORUM FOR NETWORKING STRUCTURE, MISSION AND CRITICAL MASS TWO TYPES OF UNIVERSITY CENTERS

NETWORKED PROBLEM ORIENTED SOLVING UNIVERSITY HIGH MEDIUM REPUTATION

INTERACTION LOW HIGH LEVEL

NATURE OF OUTCOME NOT TANGIBLE TANGIBLE

NATURE OF LARGE FIRMS LARGE AND CLIENT FIRMS SMALL NETWORKING DEVELOPMENT OF NON-CORE TECH

DEVELOPMENT OF CORE TECH

PROBLEM TRUST SOLVING

UNIVERSITY/INDUSTRY RELATION AND ITS EFFECT UNIV. CHAMPION

TRUST

PROXIMITY FIRM CHAMPION -

UNIV RANKING NETWORKING PROBLEM - SOLVING

FIRM SIZE UNDERLYING FACTORS FOR THE UNIVERSITY/INDUSTRY RELATIONS UNIVERSITY-INDUSTRY COLLABORATION

ORGANIZATIONAL IMPACT COMPETENCE BUILDING

PROBLEM SOLVING

TECHNOLOGY CENTRALITY CORE VS NON-CORE

KNOWLEDGE TRANSFER NATURE OF TRANSFER TECHNOLOGY TRANSFER

FORM OF COLLABORATION RESEARCH SUPPORT COOPERATIVE RESEARCH KNOWLEDGE CREATION

(Ref. Carayannis et.al. 2000 DYNAMIC CAPABILITY

ABILITYABILITY TOTO INTEGRATE,INTEGRATE, BUILDBUILD ANDAND RECONFIGURERECONFIGURE INTERNALINTERNAL ANDAND EXTERNALEXTERNAL COMPETENCESCOMPETENCES TOTO ADDRESSADDRESS RAPIDLYRAPIDLY CHANGINGCHANGING ENVIRONMENTENVIRONMENT LEARNING PROCESS TO DEVELOP DYNAMIC CAPABILITY ACCUMULATION OF EXPERIENCE

KNOWLEDGE ARTICULATION

KNOWLEDGE CODIFICATION SOCIAL CAPITAL DEFINITION durable and institutionalized network of social relations (Bourdeau) connections among individuals– social networks and the norms of reciprocity and trustworthiness (Putnam)

the sum of the actual and potential resources embedded within available through, and derived from the network of relationships (Nahapiet & Ghoshal)

networks and norms that enable people to work collectively (Woolcock) CORE CONCEPTS

TRUST SYMPATHY FORGIVENESS

INFORMATION FLOW INFLUENCE POWER ECONOMIC & SOCIAL EXCHANGES SOCIAL CAPITAL

VALUE INTROJECTION BOUNDED SOLIDARITY

NORMS & RECIPROCITY

ENFORCED TRUST

FOUR PILLARS OF SOCIAL CAPITAL

UNIVERSITY/INDUSTRY RELATIONS

NETWORKING PROBLEM TRUST SOLVING

RELATIONSHIP N&G STRUCTURAL COGNITIVE DIMENSION INFO NORMS OF TRUST WOOLCOCK SHARING RECIPROCITY

MAPPING DIMENSIONS OF SOCIAL CAPITAL WITH UNIVERSITY/INDUSTRY RELATIONSHIP

SOUTHERN NEW YORK

RURAL DOMINANT FIRM: Corning Glass University: Alfred University specialty Glass Science Isolated Community BOSTON Mass

Urban Dominant University: Harvard and MIT other Universities: Boston University, Northeastern Tufts, University of Massachusetts Home for High Tech Industry Aerospace Industry Dept of Defense Research Laboratories Financial Institutions FINLAND  OULU TAMPERE HELSINKI

SOME POINTS ABOUT FINLAND HOMOGENEOUS CULTURE VERY HIGH EDUCATIONAL LEVEL SMALL COUNTRY GEOGRAPHICALLY ISOLATED PROACTIVE POLICIES GROWTH OF FINNISH ECONOMY THREE FINNISH REGIONS OULU TAMPERE HELSINKI OULU: MOST ISOLATED CLIMATE IS SEVERE ARCTIC WEATHER SMALL TIGHTLY KNIT COMMUNITY TWO DOMINANT FIRMS: AND SONERA

TAMPERE RICH INDUSTRIAL HISTORY MAJOR SHOCK IN EARLY 1990 UNIVERSITY OF TAMPERE AND TAMPERE UNIVERSITY OF TECHNOLOGY DOMINANT FIRMS: NOKIA AND SONERA

HELSINKI CAPITAL OF THE COUNTRY UNIVERSITY OF HELSINKI AND HELSINKI UNIVERSITY OF TECHNOLOGY HOME OF ALL MAJOR CORPORATIONS INCLUDING NOKIA AND SONERA COMPARISON OF THREE REGIONS

ITEMS SOUTHERN NY FINLAND BOSTON

NO DIRECT POLICY DRIVEN BY A DRIVEN BY MULTIPLE AGENCIES GOVERNMENT ORIENTATION STATE FUNDED INTERVENTION AGENCY

ORIENTATION LOCAL GLOBAL NATIONAL

FINANCIAL POOR GOOD THROUGH NETWORK GOOD THROUGH PRIVATE AND PUBLIC PRIVATE INITIATIVES AGENCIES

PEER SUPPORT ABSENT GOOD GOOD NETWORK

ROLE OF VERY LITTLE ESTABLISHED FIRMS DOMINANT FIRMS IMPORTANT WERE MENTORS COMPARISON OF THREE REGIONS

BOSTON ITEM SOUTHERN NY FINLAND

MINIMUM SOURCE OF SOURCE OF ROLE OF THE TALENTS UNIVERSITY TECHNOLOGY NODE IN THE SOURCE OF NETWORK TALENTS

NETWORK

INNOVATION ANALYTICAL INTERPRETIVE INTERPRETIVE MODEL

HIGH SOCIAL CAPITAL LOW HIGH

NETWORK POORLY DEVELOPED HIGHLY ORGANIZED SELF-ORGANIZED STRUCTURE INNOVATION PROCESSES

ANALYTIC PROCESS INTERPRETIVE PROCESS

LINEAR PROCESS NON-LINEAR

RATIONAL PROCESS INTUITIVE PROCESS

EMPHASIS ON EFFICIENCY EMPHASIS ON EFFECTIVENESS

LOW LEVEL OF UNCERTAINTY HIGH LEVEL UNCERTAINTY

EMPATHY

TOLERANCE FOR DIVERSITY RICHARD LESTER & MICHAEL PIORE: INNOVATION: THE MISSING DIMENSION, HBS 2004 Public Support for Innovation Development in Finland

SITRA Venture Capital

TE-CENTRE FINNVERA Business Finance, guarantee

TEKES R&D in technology

OULUTECH SITRA / SEED Pre-seed, seed finance

FFI Evaluation, protection, r&d (prototype 1) and commercialisation

Research Idea Evaluation Patenting R&D Marketing

Market demand Planning Business Plan Start up

Ref: Oulu University Innovation Process in Oulu University

RESEARCH BASE PRE-INCUBATOR ACTIVITIES COMMERCIALIZATION

•New High-

Environmental research tech Start ups NorNet /Technopolis Oulu ITC •Incubator Infotech Oulu /OuluTech Ltd.

Biotechnology •License Biocenter Oulu Agreements with a 3rd Party 1.2. University of Oulu 3. Foundation of Finnish Inventions Technology Agency Of Finland /TULI /Licentia Ltd. 1. Entrepreneurship training programmes 1.2. Ideas Pre-evaluation of Research Results and 3. IPR –evaluation and Protection Implementation Plan / Business Plan 1. Financial Support

Ref: Oulu University numberInnovation Model of ideas ~100 RESEARCH IDEAS MARKET POTENTIAL /VALUE

HIGH INTEREST OF RESEARCH

PROTECTION •generic inventions (method and use claims)

LICENSE AGREEMENT In MARKET ENTRY

I1 10 I2 I12 PRODUCTS I1n

I13

-10 -5 0 t BASIC RESEARCH APPLY RESEARCH PRODUCT DEVELOPMENT UNIVERSITY UNIV & COMPANY COMPANY Ref Oulu Univesrity INNOVATION NETWORK IN BOSTON

SPECIAL ALUMNI FORUMS

CORPORATE VENTURE NETWORKS CAPITAL