Innovation Policy Handbook
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CENTER FOR INTERNATIONAL SCIENCE AND TECHNOLOGY POLICY Innovation Policy Handbook Nicholas S. Vonortas Director Center for International Science and Technology Policy The George Washington University Anwar Aridi The World Bank Chapters Contributed By: Geetu Ambwani Patrick Besha Benjamin Boroughs Jordan Hosmer-Henner Eric Rouge Rafif al-Sayed Danny Waggoner Jeffrey Williams Timothy Williams June 2, 2012 Contents Preface 7 I Background 11 1 Technology, Innovation, and Economic Growth 12 1.1 Introduction . 12 1.2 Historical Economic Growth . 13 1.3 Economic Directions and Puzzles Regarding Technological Advance . 13 1.4 Returns to Research and Development . 17 1.5 Technology Diffusion . 21 1.6 Technology and Growth . 22 1.7 Evolutionary Theorizing . 26 1.8 Regional Considerations . 28 1.9 Summary Implications . 29 1.A Leveraging Investment in R&D Through Broad-Based Policy: Finland (1960-2000) . 32 References . 34 2 Science, Technology and Innovation Policy in the Era of Globalization 41 2.1 Introduction . 41 2.2 Should the Government Intervene? . 42 2.2.1 Market failure . 42 2.2.2 Beyond the market: System failure . 43 2.2.3 Life cycle of products . 44 2.2.4 Diffusion of knowledge . 45 2.3 Science, Technology and Innovation (STI) Policy . 47 2.3.1 STI Policies . 47 2.4 STI Policy and Globalization . 50 2.4.1 Multinational Corporations (MNC) . 52 References . 53 II Framework 55 3 Systems of Innovation 56 1 3.1 Introduction . 56 3.2 A Brief Overview of the Innovation Systems Concept . 57 3.3 Innovation Systems: The Local Dimension . 59 3.4 Innovation Systems: The Sectoral Dimension . 59 3.5 The Innovation Systems Approach for Developing Countries . 60 3.A Jordan: National Innovation System . 65 References . 67 4 The Entrepreneurial University: A Regional Perspective 70 4.1 Introduction: The Role of Universities in the Innovation System . 70 4.2 The Link between Industry and University . 72 4.3 The Role of Government . 74 4.4 American Universities and Entrepreneurship . 76 4.5 Case Studies . 76 4.5.1 Stanford University . 77 4.5.2 Singapore . 78 4.5.3 Volta Redonda, Brazil . 79 4.6 Discussion . 79 4.7 Conclusion . 81 4.A Moving towards the Entrepreneurial University Model in the Levant Region . 82 References . 83 5 Intellectual Property, Standards 88 5.1 Introduction . 88 5.2 Forms of Intellectual Property Protection . 88 5.3 Intellectual Property in the Innovation Ecosystem . 90 5.4 Intellectual Property and Development . 91 5.5 Determining the Need for and Impact of Intellectual Property . 93 5.6 Standards . 97 5.A Country Details: Lebanon and Jordan . 100 References . 101 6 National Competitive Advantage 107 6.1 Introduction . 107 6.2 Economic Growth and Development . 108 6.3 Defining and Measuring Competitiveness . 110 6.3.1 Industry Competitiveness . 110 6.3.2 Global Competitiveness Index . 112 6.4 Conclusion . 114 6.A Jordan and the GCI . 116 6.B China’s Solar Industry . 116 References . 119 2 III Strategy 121 7 Alliances / Knowledge-Intensive Partnerships 122 7.1 Introduction . 122 7.2 Context of Strategic Alliances . 124 7.2.1 Definitions . 124 7.2.2 International Context . 125 7.3 A Practical Guide . 128 7.3.1 Partnership Opportunities and Dangers . 128 7.3.2 Partner Choice . 130 7.3.3 Partnership Negotiation . 131 7.4 Conclusion . 133 7.A Petrobrás Subsea Boosting Technology Development . 136 7.B Tata-Fiat Joint Venture . 137 7.C Vodacom-CWN Joint Venture . 137 7.D Indus Towers Joint Venture . 138 References . 139 8 Clusters / Science Parks / Knowledge Business Incubators 143 8.1 Introduction . 143 8.2 Clusters . 143 8.2.1 What is a Cluster and why are they desirable? . 144 8.2.2 Why do Industries Cluster? . 145 8.2.3 Agglomeration vs. Innovative Clustering . 147 8.2.4 Case Studies in Cluster Formation . 149 8.2.5 Can Governments Stimulate Cluster Growth? . 151 8.3 Science Parks and Incubators . 151 8.3.1 Science Parks . 152 8.3.2 Knowledge Business Incubators . 155 8.3.3 Assessments of Effectiveness . 158 8.4 Conclusion . 159 8.A Middle East and North Africa: Hi-Tech Entrepreneurship Efforts . 160 References . 160 9 Small Firms / Entrepreneurship 163 9.1 Introduction . 163 9.2 Overview of SMEs . 164 9.3 Types of SMEs . 166 9.4 Entrepreneurship in the twenty-first century . 168 9.5 Challenges to growth in SMEs . 170 9.6 Approaches to policy . 171 9.7 Developing programs to support innovative SMEs . 173 9.A Comparison of SME initiatives in three European countries . ..