APEC - Internationalization of industrial Science and Technology

Reported Studies

Innovation Systems Research Network

Canada's ability to adapt its resource-based traditional economy to a more knowledge-driven technology-based economy will play a key role in the maintenance of our high living standard. Success in the new knowledge-based economy increasingly depends on the ability to apply the results of innovation - a new, or significantly improved, service, product, production technique, or management method. Recent studies of the innovation process point towards the interdependence of economic, political, social and cultural factors in determining the relative degree of success enjoyed by individual nations and regions in the global and knowledge-based economy. These studies point the way towards a better understanding of the complex interdependencies between internal firm dynamics around the innovation process and the broader institutional setting within which the firms operate.

Researchers have noted strong national, regional, or local components that influence the opportunities for science-based innovation and competitiveness of firms. The interaction of these components in geographic regions is termed the system of innovation. This includes the network of institutions in the public and private sectors whose activities and interactions initiate, import, modify and diffuse new technologies. The concept of the innovation system gives special prominence to local, regional, and national social and political institutions and mechanisms that support the innovation process. It moves the theory of industrial innovation from a simple description of the entrepreneur in an isolated firm to a consideration of how all the elements of society contribute to technological change. It encourages the examination of interactions and synergies which would not be visible in an analysis of individual firms or competition among firms.

Of particular interest to, and relevance for, the work of ISRN is the regional level of the innovation system. The geography of production in the new economy is marked by a 'paradoxical consequence of globalization' - the increasing importance of the locality as a site for innovation. The role of knowledge and creativity in this economy places a premium on the kind of localized, or regionally-based, innovation that is fostered by proximity. Innovative capabilities are frequently sustained through regional communities that share a common knowledge base and interact through common institutions. The forms of collaboration and interaction which occur in these communities draw attention to the role that regional institutions play in supporting innovation in a global economy. Distance is a critical variable which exerts a significant influence over the success with which new product innovations are transferred from the laboratory to commercial exploitation or process innovations are adopted and diffused across developers and users. This focus on the importance of the region as a site for innovation has led to a new emphasis on the importance and contribution of the regional system of innovation.

Both the broader systems of innovation approach and its regional application are of specific relevance to an economy with the breadth and diversity of Canada's. Attempts to understand the nature of the innovation process and to develop policy to support it solely at the national level may founder on this problem of diversity A regional focus overcomes this problem and provides a better way to ground our understanding of the innovation process within the diverse realities that make up the national economy.

The Social Sciences and Humanities Research Council (SSHRC), the National Research Council (NRC) and the Natural Sciences and Engineering Research Council (NSERC) have awarded $600,000 over three years to create a national network of researchers to look at the link between innovation and development in various regions throughout the country.

The Innovation Systems Research Network will investigate how the interaction of firms and regional institutions in Canada facilitate, or impede, the process of innovation and social learning that is critical for success in the new global economy. The three-year pilot project will support university-based research on technological change, economic development, and the innovation "systems" that affect how innovations such as new or improved services, products, management methods, or production techniques are applied in society. The new knowledge produced by this research should help policy-makers better understand how science, technology, and economic policy affects economic development.