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ENT202 / Innovation: Strategies and Systems

Week 4: Triple Helix System of Innovation

College of Business and Law

Karmen Lužar

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Recognition of Traditional owners and Indigenous cultures

Charles Darwin University acknowledges the traditional custodians of the land on which we’re meeting and pays respect to Elders both past and present and extends that respect to all Aboriginal and Torres Strait Islander people.

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Slide 3

The concept of Triple Helix (TH)

According to the systems theory TH is defined as a set of:

• Components: the institutional spheres of 1) University, 2) Industry and 3) Government (each encompassing a wide array of actors);

• Relationships between components: collaboration and conflict moderation, collaborative leadership, substitution and networking;

• Functions: described as processes taking place in what we label the ‘Knowledge, Innovation and Consensus Spaces’.

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The concept of Triple Helix (TH) cont. • A shift from innovation sources confined to a single

institutional sphere to the interaction among these three spheres.

• -> This caused institutional restructuring of the sources and development path of innovation,

• -> and also a rethinking of our main models for conceptualizing innovation and innovation systems.

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The concept of Triple Helix (TH) cont. • The TH model interprets the shift from a dominating

industry-government dyad in the Industrial Society to a growing triadic relationship between university-industry- government in the Knowledge Society.

• The concept has grown into a conceptual framework for exploring the complex dynamics of the Knowledge Society and for informing policy-makers at national, regional and international level in the design of new innovation and development strategies.

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TH conceptual framework

• The potential for innovation and economic development in a Knowledge Society lies in:

1) a more prominent role for the university; and

2) the hybridisation of elements from university, industry and government to generate new institutional and social formats for the production, transfer and application of knowledge.

-> ‘creative destruction’ and ‘creative renewal’

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TH conceptual framework cont.

• The enhanced role of the university:

• The addition of the university ‘third mission’, i.e. involvement in socio-economic development, next to the traditional academic missions of teaching and research.

• The university’s continuous capacity to provide students with new ideas, skills and entrepreneurial talent has become a major asset in the Knowledge Society.

• Furthermore, universities’ capacity to generate technology has changed their position, from a traditional source of human resources and knowledge to a new source of technology generation and transfer.

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TH conceptual framework cont.

• 2 perspectives:

A) (Neo)institutional: examines various Triple Helix configurations and inducing mechanisms in national and regional contexts.

B) (Neo)evolutionary: sees university, industry and government as co-evolving sub-sets of social systems that interact through market selections, innovative dynamics and network controls, communicate through specific codes and institutionally adapt by negotiations and translations at their interfaces.

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A (neo)institutional perspective

• Encompasses case studies and comparative historical analyses that explore different configurations arising from the positioning of the university, industry and government institutional spheres relative to each other and their movement and reorientation, with one as a gravitational centre around which the others rotate.

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A (neo)institutional perspective cont.

Source: Etzkowitz, H & Leydesdorff, L 2000

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A (neo)evolutionary perspective

• Inspired by the theory of social systems of communication (Luhmann, 1975, 1984) and mathematical theory of communication (Shannon, 1948).

• This perspective sees University, Industry and Government as co-evolving sub-sets of social systems.

• Interaction between them occurs through an overlay of recursive networks and organizations which reshape their institutional arrangements through reflexive sub-dynamics (e.g. markets and technological innovations).

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Components of TH systems

• University, Industry and Government as holistic, ‘block’ entities.

• A more internally differentiated approach:

• R&D vs non-R&D innovators

• Single-sphere vs multi-sphere (hybrid) institutions

• Individuals vs institutions

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R&D and non-R&D innovators

• Distinction, based on the performance of in-house R&D.

• Recognises that R&D is not the only driver of innovation (technology adoption, incremental changes, imitation, and combining existing knowledge in new ways can also increase organisational innovative capacity).

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R&D innovators

• University: academic research groups and interdisciplinary research centres

• Industry: the company R&D divisions or departments

• Government: public research organisations, mission- oriented research laboratories

• Beyond that: the non-profit sector, e.g. charities, foundations, professional/trade associations, service organisations, not-for-profit corporations, trusts, etc.

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Non-R&D innovators

• Most often associated with the Industry institutional

sphere as company actors involved in non-R&D activities, like design, production, marketing, sales, acquisition of technology, etc.

• Also present in the creation and change of organisations, technology transfer, incubation activities, financing, negotiation, etc. (not confined to the Industry borders)

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Single-sphere and multi-sphere institutions • Distinction arises from the transition from the Industrial to

the Knowledge Society.

• This transition manifested through increasing communication and interconnectivity between people and institutions, mobility of people and financial capital, delocalisation and globalisation of production sites, labour and social relationships, etc.

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Single-sphere institutions

• Traditionally described within the boundaries of a single institutional sphere, be it University (education institution) or Industry (business firm) or Government (agency).

• Their functioning, specific to a laissez-faire regime is characterized by high specialisation and work centralisation, limited mobility of workers, rigid and inertial institutional boundaries, low interaction with entities of another institutional sphere, etc.

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Multi-sphere (hybrid) institutions

• Operate at the intersection of the University, Industry and Government institutional spheres and synthesize in their institutional design elements of each sphere, in a balanced Triple Helix regime.

• Examples: Technology transfer offices in universities, firms and government research labs, industrial liaison offices, business support institutions (science parks, business and technology incubators), financial support institutions (public and private venture capital firms, angel networks, seed capital funds, etc.).

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Multi-sphere institutions cont.

Characteristics:

• Smaller-scale hierarchies, with fewer layers and more decentralised decision-making, in order to increase flexibility and responsiveness to changing market demands.

• Institutional boundaries are more permeable for increased collaboration to improved work effectiveness.

• Jobs require greater task- and knowledge-sharing.

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Individuals and institutions

• Innovation studies focused on teams and institutions give low recognition to individual innovators.

• The ‘Innovation Organiser” coordinates a mix of top-down and bottom-up processes that ensure agreement and build a platform where innovation stakeholders from different organisational backgrounds and perspectives can come together to generate and gain support for new ideas promoting economic and social development (‘cross- institutional entrepreneurship’).

• The ‘Entrepreneurial Scientist’ concept combines academic and business elements. – Knowledge commercialization.

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Slide 21

Relationships between components of TH systems 1. Collaboration and conflict moderation

2. Collaborative leadership

3. Substitution (a) between and b) within spheres)

4. Networking

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TH relationships

• Collaboration and conflict moderation is a specific form of interaction in triadic entities, which have a higher potential for turning tension and conflict of interest into convergence and confluence of interest, compared to dyadic relationships, which are more subject to collapse into oppositional modes.

• Collaborative leadership, in the sense of “a purposeful relationship in which all parties strategically chose to cooperate in order to accomplish a shared outcome”. It is an integral part of the capacity of collaboration and conflict moderation.

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TH relationships cont.

• Substitution: this type of interaction arises when institutional spheres fill gaps that emerge when another sphere is weak.

Substitution between spheres for example when government agencies take up, in addition to their traditional function of regulation and control, investment and provision of public venture capital, which is a traditional task for the Industry sphere.

Substitution within spheres, for example when vocational training institutions take the lead over universities in engaging into joint initiatives with local firms that prefer the more practical, shorter-term oriented opportunities as opposed to the more complex, long-term programmes of the university.

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TH relationships cont.

• Networking: formal and informal structures at national, regional and international level.

• Networks are not a specific phenomenon to Triple Helix interactions, like the other relationships described above, but are widely found in this type of interactions too.

• Networks are more flexible than hierarchies, more invested in the public good than markets and more effective in responding to changing conditions than either hierarchies or markets.

• Networking also reflects the growing non-linearity and interactivity of innovation processes.

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Slide 25

Functions of TH systems

• The functions of Triple Helix systems are defined as a set of processes specific to the Triple Helix spaces:

1) The Knowledge Space

2) The Innovation Space

3) The Consensus Space

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The Knowledge Space

• The set of knowledge generation, diffusion and use activities of the Triple Helix components.

• An essential step in the transition to a Knowledge Society.

• Purpose: to create a ‘critical mass’ of knowledge resources to strengthen the local, regional and national knowledge base, avoid fragmentation and reduce duplication of research efforts.

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The Knowledge Space cont.

• Knowledge resources are aggregated locally within a region, nationally across regions or through a wide range of mechanisms:

- Dispersal of some national public research organisations from the capital to less research-intensive regions.

- Relocation and aggregation of existing research resources.

- Attraction of leading researchers through the foundation of a science-based university.

- Creation of new university resources to support the development of new industries or raise the existing ones to a higher level.

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The Knowledge Space cont.

• Cont.:

- Virtual congregation of geographically dispersed groups from university and industry around common research themes, with government support.

- Networking of existing knowledge-based organisations and creation of new ones through collaboration among existing players, in order to become internationally competitive.

- Re-organisation of research funding from a linear to an interactive model.

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The Innovation Space

• ‘Multi-sphere’ (hybrid) organisations and entrepreneurial individual and institutions.

• Purpose: the creation and development of intellectual and entrepreneurial potential, attraction of talent and innovative firms from elsewhere, and building a competitive advantage for the region and the country.

= A form of ‘public entrepreneurship’.

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The Innovation Space cont.

• The creation of an Innovation Space can take place through various mechanisms:

- Creation of a university in a region without higher education capacity.

- Building an integrated environment for university technology transfer and entrepreneurship activities.

- Relocation of artists to declining urban districts to stimulate arts/technology-based economic renewal.

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The Consensus Space

• Purpose: system components to brainstorm, discuss and evaluate proposals for advancement towards a knowledge-based regime. -> A collaborative process.

• Through cross-fertilising diverse perspectives, ideas may be generated and results may be achieved that actors are not likely to have accomplished individually.

• Continuous interaction to exchange resources and negotiate shared purposes.

• This interaction is rooted in trust and is regulated by rules of the game negotiated and agreed by the participants.

- Interdependence.

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The Consensus Space cont.

• Mechanisms to create the Consensus Space:

- Creation or transformation of an organization to provide a home for brainstorming, analysis of problems and formulation of plans.

- Provision of access to the resources required to implement a project.

- Providing solutions to conflict or crisis situations.

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Slide 33

Formation of Spaces

• The formation of the Knowledge, Consensus and Innovation Spaces is analytically conceptualized as a two- stage process:

Stage 1: Formation of a “stem cell space” through interaction of the university, industry and government spheres.

Stage 2: Differentiation of the “stem cell space”

Figure 2 - Interaction between the Triple Helix institutional spheres in the formation of a Space

Source: Ranga, M & Etzkowitz, H 2013

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Formation of Spaces cont.

• The differentiation of a “stem cell space” into a Knowledge, Innovation or Consensus Space (Stage 2) is achieved through mobilization of specific actors, relations and resources and the creation of new institutional formats, under the influence of specific local or regional needs, features of the interacting TH spheres and of their environment.

• Formed spaces function in a continuous and diachronic transition from one space to another, occurring in different directions as a non-linear process. The directions of transitions depend on different regional circumstances and different stages of regional development.

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Relevance of TH for regional developments • Two main approaches to knowledge-based regional

innovation and development (not mutually exclusive):

1. Exogenous strategies: attracting innovative high-tech firms to relocate in the region, as a modern twist of the traditional approach of attracting industrial branch plants;

2. Endogenous strategies: creating an underlying science and arts base, as a mechanism to jumpstart the formation of knowledge-based firms and creative industries.

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Exogenous strategies

• Exogenous knowledge-based regional development strategies rely on marketing local assets, such as trained workforce (HR), good infrastructure and living conditions.

• Exogenous strategies are usually promoted on a top-down basis, by active external factors such as central governments, private banks or transnational firms, who inject resources from outside the region to create jobs, wealth and a larger local tax base.

• However, limited effectiveness if the activities of the relocated units cannot be sustained.

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Endogenous strategies

• Endogenous strategies recognise that local factors, such as strong knowledge base, skilled labour services and proximity to sources of knowledge and expertise, are much more important than cost reductions, especially for high-tech firms.

• Therefore, creating the infrastructure for local knowledge creation and knowledge-based firm formation and growth is the essence of these strategies.

• Bottom-up, emphasising high-tech entrepreneurship and local capacity-building, however evaluation of performance needed considering limited local resources.

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Slide 38

Key differences to NSI and RSI

1. Diffuseness and conceptual heterogeneity

2. Strong focus on institutions and low visibility of the role of individuals in the innovation process

3. System boundaries

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Slide 39

Bibliography

• Ranga, M, Etzkowitz, H 2013, ‘Triple Helix Systems: An Analytical Framework for Innovation Policy and Practice in the Knowledge Society’, Industry & higher education, 27(4):237-262.

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Slide 40

Questions

• Describe the concept of Triple Helix systems of innovation

• Identify and describe the two perspectives of the TH Conceptual Framework

• What are the components of TH systems (main and other)?

• Describe relationships between components of TH systems

• Identify and describe the functions of TH systems

• Describe the process of Spaces formation

• What is the relevance of TH for regional developments? Describe the two main approaches.

• What are the key differences between NSI/RSI and TH?

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Slide 41

Next week…

• Quadruple and Quintuple Systems of Innovation

• Tutorial reading for today: None. Presentations.

• Tutorial reading for week 5: Ratten V 2016 ‘Multiple Helix Approaches to Sustainable Entrepreneurship and Innovation: A Case Study of the Great Barrier Reef (Australia)’. In M Peris-Ortiz M, J Ferreira, L Farinha, N Fernandes (eds) Multiple Helix Ecosystems for Sustainable Competitiveness. Innovation, Technology, and Knowledge Management, Springer, Cham, pp. 15-25.

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