White Spaces Innovation in Sweden - Innovation policy for ... - Vinnova

WHITE SPACES INNOVATION IN SWEDENsystems display: dispersed interaction e.g. regionally specialised knowledge domains;absence of a global controller (self-managing adaptive systems); cross-cutting hierarchicalorganisation (e.g. multiple economic governance jurisdictions, including MLP);continual adaptation; permanent innovation; and „far-from-equilibrium‟ (prone to crises)system dynamics (Arthur, Durlauf & Lane, 1997). Nevertheless, broadly-speaking,although there are historic exceptions, discussed by the likes of Diamond (2005), economicand other systems have the self-adapting capabilities of „resilience‟ althoughtime-scales that are quite lengthy, as also recognised in the MLP approach. It is furtherargued by Holland (1995) that the non-linearity and variety (diversity) of complex adaptivesystems generates path dependence. This means „regional regimes‟ of interactionfacilitate innovation as the system evolves, allowing qualitative shifts in system dynamics(e.g. hydrocarbons to a post-hydrocarbons macro-regime or „landscape‟).Table 3.1 Theoretical Perspectives on Multi-Level Regional Innovation System InteractionsTheoretical ApproachCo-evolutionary, Multi-level PerspectivePanarchyComplexity TheoryKey Innovation CharacteristicsNon-Cyclical Scalar RelationshipsSocio-technical Systems (STS)- InteractiveStrategic Niche ManagementMulti-level Interactions (Cyclical)Potential (High Variety)Connectedness (Robust Endogenous Institutions)Resilience (Resistance to De-stabilisation; Renewal)Preadaptation/ExaptationCognitive ReversalBorrowingSearchingAdjacent PossibleEvolutionary Economic Geography Path Dependence/Path Inter-dependenceRelatedness/TransversalityProximitySource: Centre for Advanced Studies, Cardiff UniversityThis leads, fourth, to a brief introduction to key insights of relevance to this analysiscoming from evolutionary economic geography (EEG; Frenken et al., 2007). Takingtwo key concepts from spatial economics and technological history it finds particularutility in the idea of „relatedness‟, on the one hand, and path dependence, on the other.Relatedness arises from research into regional economic growth where it is found thateconomies with „related variety‟ among industries perform better than those without it.This is called the „proximity‟ effect superseding the „portfolio‟ effect from the viewpointof industrial structure. More related variety means more lateral „absorptive capacity‟from related „knowledge spillovers‟. These can enhance the innovation potential ofregions and EEG research goes further into this relationship and, as indicated, finds theelement of „relatedness‟ within the required variety to be the independent variable.Moving on, „path dependence‟ at the regional level can explain stability but also system36