Presentation on innovation and regional development to the leadership of the east Sweden business region.

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Innovation and Regional Development
Steningevik, September 3, 2013
“..because the execution of an idea is always more
important
than the brilliance of the thought..”
(Harvard Business Publishing – Morgan, Levitt & Maleck – INVEST model)

2. Sub heading
4
Transformation into knowledge economy
Instruktion från Lars-Göran Larsson i augusti:
”Baserat på historik, hur ser en
innovationsbaserad transformation in i ett
framtida informationssamhälle ut? Hur kan det
gå till?
- Hur kopplar vi RIS3 till detta i praktiken.
- Hur gör Östergötland för att komma dit... med
syfte att bli en ledande region i ett europeiskt
perspektiv.”

3. Sub heading
5
Transformation into knowledge economy
R&D
Innovation
Productivity
Transformati
on from
labour to
machines
Talent
development
Economic
Growth
Sustainable
development
Quality of life

4. 6
1. Globalisation and Hyper Competition
2. Business in Hyper Competitive Markets
3. What do we mean with Innovation?
4. What Hyper Competition means for places
5. The Importance of shares Visions
6. The EU Horizon 2020 Strategy
7. Example: Croatia entering the EU
8. Example: African Model for Science Parks
9. Example: Karolinska Institutet Science Park
Agenda

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Globalisation and Hyper Competition

6. Sub heading
8
Globalisation
In 2013, for the first time since the
industrial revolution in the 19th
century, emerging economies will
produce the majority of the world’s
goods and services.

7. Sub heading
9
Globalisation
Emerging
economies are no
longer emerging.
They are leading.

8. Sub heading
10
Globalisation
It took a thousand years for the
world’s economic centre of gravity
to shift from Asia to Europe
culminating with the industrial
revolution.
But now that trend is reversing
itself, and at a stunning speed.

9. Sub heading
11
The Top Ten Leaders of Global Growth
Source: Financial Times

10. Sub heading
12
The Top Ten Leaders of Global Growth
Source: Financial Times

11. Sub heading
13
The Top Ten Leaders of Global Growth
Source: Financial Times

12. Sub heading
14
The Top Ten Leaders of Global Growth
Source: Financial Times

13. 15
Why hyper competition?
• Globalisation – less trade barriers and efficient transport (e.g. containers)
• Speed of hyper connected communication and the pace of modern
business
• Disruptive Technologies
A new technology that has a serious impact on the
status quo and changes the way people have been
dealing with something, perhaps for decades
Some drivers of hyper competition

14. Sub heading
16
European Union growth rates since 2001
Source: The Economist

15. Sub heading
17
Worlds fastest growing economies
Source: The Economist

16. Sub heading
18
Africa – the fastest billion
Source: Renaissance Capital
In the book The Fastest Billion the authors
outlines the African continent’s growth
trajectory over 30 years.
Projections indicate that Africa is already
attracting more foreign investments than
India and Bangladesh owing to a faster
growth rate.
The continent, the authors say, has the
unique advantage of “leapfrogging” through
various stages of economic development,
which the more developed western states
had to go through in growing their economies
over decades.
Today´s public and private sector leaders in
Africa are Harvard graduates and often have
PhD degrees

17. Sub heading
19
Sverige jämfört med USA och Frankrike
Source: OECD

18. Sub heading
20
Centrum för teknikinnovation är nu i Asien
Källa: Financial Times 2013-05-30

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The Challenge:
Business in hyper competitive markets

20. 22
Corporate world dominance
In the year 1994, Motorola was world leader in (analogue)
mobiles,
seven years later Nokia was world leader in (digital) mobiles
0%
10%
20%
30%
40%
50%
60%
Market shares 1994 Market Shares 2001
Motorola
Nokia

21. 23
From #1 to crises in less than three years…
Why ?
Nokia share price
September 3,
2013: Microsoft
buys Nokia´s
handset division

22. 24
Apple stock price down more than 40%

23. 25
“Either you innovate or you’re in commodity hell. If you
do what everyone else does, you have a low-margin
business. That’s not where you want to be.”
Sam Palmisano, former CEO IBM
Hyper competition

24. 26
“Managing innovation better may be the only way out of
the abyss called commodity hell”
Jeffrey R. Immelt, CEO General Electric
Hyper competition

25. Sub heading
27
Innovation is a key driver of well-being and growth

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What do we mean with innovation?

27. 29
What is Innovation?
The literature
is not giving
us a
consistent
definition

28. 30
Innovation is creative destruction, where
entrepreneurs combine existing elements in
new ways…
After Joseph Schumpeter (1883 – 1950)
The definition

29. 31
En definition...
Innovation versus Invention

30. 33
Types of innovation

31. 34
The S-curve
Emergent Growth Mature
Performance
/
Value
offering
Effort / Time
Business of the future
(EXPLORATORY)
Ongoing business
(EXPLOITATIVE)
Source: Tovstiga (2007)

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What hyper competition means for
places

33. Sub heading
36
The innovation system
We live in hypercompetitive global
markets
Hyper competition

34. 37
You need to understand the future place climate

35. 38
Seattle in the 1970s – a place in decline
In the 1970s Seattle became synonymous with urban decline

36. 39
Seattle – example of success
World class institutions
and companies based in
Seattle:
- Microsoft (Redmond)
- Amazon.com
- Starbucks
- Nordstroms
Today, Seattle is one of the wealthier and most productive metropolitan
areas in the United States.
- Per-capita income is 25 percent above the average -
Per-capita productivity is 37 percent above the average
Cities like Seattle succeed by attracting talented institutions
and people who educate and employ one another and by building
sustainable innovation systems.

37. Sub heading
40
The European perspective
The European Unions previous
cohesion policy did not achieve
the intended results

38. 41
The Challenge
The global competition of
cities is estimated to host 2,7
million towns, 3 thousand large
cities and 455 large
metropolitan areas with a
population over one million.
All of them compete in the
struggle for attention and this
is not limited to the contest
between countries and cities.
This competitive environment makes it important for places, no matter
their size or composition, to clearly differentiate and to convey why they
are relevant and valued options.
The competition between places used to be about comparative
advantages, but in the age of globalisation it is about competitive
advantage.

39. 42
To achieve Place Excellence requires innovation
Innovation

40. Sub heading
43
Quad Helix
4

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The Importance of shared Visions

42. Sub heading
45
The Power of Visions
“Vision without action
is merely a dream.
Action without vision
merely passes the
time.
Vision with action can
change the world.”
- Joel Barker, Futurist, Author
Vision
Strategy
Plans and
implementation

43. 46
Strategy

44. 47
Implementation of Europe Horizon 2020 Growth Strategy
• National Innovation Strategy
• Regional Development Programs
• Regional Innovation Strategies
• Regional Development Plans
• Local Development Plans
Country
Region
Local
Community
EU Horizon 2020 Frame Work
... a bottom up and top down cooperative process

45. 48
The work model to achieve Place Excellence
Assets
Activities Actors
Governance

46. 49
Always start with your Target Markets
City branding is the process of image communication to a target market
All places compete with other places for people (visitors, residents),
resources, and business.
Which are the target markets of your place?

47. 50
Perform a sweet spot analysis for differentiation
Customers’
needs
Competitive
places
offerings
Your own city
assets and
capabilities
Sweet
Spot
Where your city meets
target markets needs
in a way in which your
competitors cannot
What?
Where?
Why?
How?
1
2
3
Sweet spot = unique spot
How to protect/define boundary 1,2,3
Inspired by: Collis & Rukstad (2008). Can You Say What Your Strategy Is?,
HBR (April 2008)

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The EU Horizon 2020 strategy

49. Sub heading
52
The European perspective
“Europe is facing a moment of transformation. The crises has wiped out
years of economic and social progress and exposed structural weaknesses
in Europe´s economy.
In the meantime, the world is moving fast and long-term challenges such
as globalisation, pressure on resources, population ageing, are
intensifying.”
- Quote from Europe 2020 Strategy

50. Sub heading
53
The European perspective
The EU has set out its vision for Europe´s economy in the Europe 2020
Strategy, which aims at confronting structural weaknesses through
progress in three mutually reinforcing priorities:
1. Smart Growth, based on knowledge
and innovation
2. Sustainable growth, promoting a more
resource efficient, greener and
competitive economy
3. Inclusive growth, fostering a high
employment economy delivering
economic, social and territorial
cohesion

51. Sub heading
54
The European perspective
Investing more in research, innovation and entrepreneurship is at the
heart of Europe 2020 and a crucial part of Europe´s response to the
economic crises.
So is having a strategic and integrated approach to innovation that
maximizes European, national and regional research and innovation
potential.
It is about enhancing Europe´s capacity to
deliver smart, sustainable and inclusive
growth, through the concept of smart
specialization.

52. Sub heading
55
Specialization in Europe

53. Sub heading
56
The European perspective
A national / regional strategy for smart specialization (RIS3) can be
designed following a number of practical steps:
1. The analysis of the national / regional context and potential for
innovation.
2. The set-up of a sound and inclusive governance structure.
3. The production of a shared vision about the future of the country /
region.
4. The selection of a limited number of priorities
for national / regional development.
5. The establishment of suitable policy mixes.
6. The integration of monitoring and evaluation
mechanisms.

54. 57
Budget for Cohesion Policy post–2013
Cohesion Policy
33 % (€336 billion)
Connecting
Europe Facility
4 % (€40 billion)
Other policies
(agriculture, research,
external etc.)
63 % (€649 billion)
Cohesion policy within total EU budget 2014-2020

55. Sub heading
58
The European perspective
NEW EU
MEMBER
STATE JULY
2013

56. Sub heading
59
Target regions
4
3 categories
of regions
< 75 % of EU average
GDP/capita*
*index EU27=100
75-90 % > 90 %
Less developed regions
Transition regions
More developed regions

57. 60
INNOVATE – EXECUTE™
… the world will never be the same