TCI 2015 Winning in the Knowledge-Innovation-Creative Economy

Winning in the Knowledge-Innovation-

Creative EconomyMichael Enright

Plenary Session 4 Facing the Challenges of a Creative Economy

November 2015 © Copyright Michael J. Enright 2

Winning in the Knowledge-Innovation-Creative

Economy

Professor Michael EnrightUniversity of Hong Kong and

Enright, Scott & Associates Limited

TCI Conference, 2015

This presentation is incomplete without the spoken commentary.


Professor Michael Enright• Based in Asia for 19 years• Originally a scientist with background in biotechnology,

electronics, advanced materials, and software• Former Professor at Harvard Business School, presently on the

faculty of University of Hong Kong• Leader of competitiveness and economic development projects

in 23 countries• Advisor to governments in >20 countries on science and

technology policies• Advisor to many leading cities around the world• ESA economic development projects for nations, regions, and

cities and international strategy projects for leading companies


The Competitiveness Imperative

• Competitiveness is more important than ever – The aftermath of the GFC and ongoing economic turmoil– International markets stagnant or worse means more people

fighting in difficult markets

• Why the knowledge-innovation-creative economy?– What is the alternative?– Potential to leverage modern technology and business systems– Take advantage of the “Flat World”


The Knowledge-Innovation-Creative Economy

• Generates value through developing and leveraging IP and intangible assets

• Includes– Science and technology-based business– Innovative service sectors– Creative and cultural industries– Advanced technology in “low-tech” and “mid-tech” industries– Improved processes– New business models– New marketing, distribution, management systems

• Knowledge, innovation, and creativity can be leveraged in any industry


The KIC Economy Requires the “Traditional Inputs”

• Hard and soft infrastructure• Innovative people• Supportive policies• Suitable finance• Attractive working and living spaces• Amenities to attract mobile professionals• A supportive environment• Etc.


Innovative People

• Well-educated and trained• Able to think “out of the box”• Mix of people with different backgrounds and

disciplines• The ability to understand new technologies and

advanced business practice• Able to understand or anticipate market needs• Able to leverage productive capacity


Supportive Policies

• Investments in education and training• Investment in science and technology• Investment in modern infrastructure• Incubators for start-ups• IP protection• Light-handed regulation• Attraction of investment from innovative companies

(domestic and foreign)


Suitable Finance

• Public support for university and institute research• Large companies willing to invest in R&D• Angel and venture capital for start-ups (need the ability

to “exit” via sale or IPO)• Access to bank loans• Ability to obtain stock market listings• Access to both domestic and foreign capital


Attractive Working and Living Spaces

• Work spaces– Science and tech parks / Dense, high-performance

CBDs /High-interaction, creative spaces

• Living spaces– Varied offerings / Close to work / Affordable

• Attractive amenities– Retail, entertainment, leisure / Education / Cultural /

Public services / Social spaces


A Supportive Environment

• Public acknowledgement of the value of knowledge, innovation, creativity

• Education and support for entrepreneurs • Entrepreneur and investor clubs to provide advice

and shared experience• An environment in which it is OK to leave large

companies to start new ventures• An environment in which it is “OK to fail” and

entrepreneurs get a second chance


The “traditional inputs” are necessary, but not sufficient to win in the KIC economy.

Winning in the KIC economy also requires the 11 “Cs”.


Competitiveness

• The world economy is a tough place. Enhancing competitiveness through improving productivity is vital to success.

• Short term: identifying and removing immediate obstacles to progress and attracting / developing businesses that use existing resources and capabilities.

• Medium-term: enhancing local resources and capabilities and attracting new ones.

• Long-run: shifting higher up the knowledge-innovation-creative economy ladder.


Comprehensiveness

• Competitiveness is NOT additive. A location does not get a few points for this and a few for that.

• Competitiveness is threshold. Significant shortcomings in any key attribute can kill local industries and economies.

• This means that enhancing competitiveness is a comprehensive undertaking.

• There is no single, magic-bullet that can be used to foster competitiveness.


Complementarity

• Regions / nations that win in the KIC have complementary resources in several dimensions.

• They have complementary skills and capabilities.• They have different geographic parts that play

complementary roles (cities, industrial spaces, living spaces, amenities, social spaces, etc.).

• Innovative products and services involve bundles of complementary technologies and knowledge.

• Complementary skills and capabilities allow successful economies to innovate, adjust, and adapt.


Connectivity

• Connectivity is absolutely vital developing and combining knowledge bases that drive the innovation and creative processes.

• This means connectivity within a region, between the region and the rest of the country, and between the region and the rest of the world.

• This means excellent transportation and ICT infrastructure and people who know how to use it.

• It also means psychic connectivity, sufficient knowledge and empathy to connect with people in the region, the country, and the rest of the world.


Communication

• Communication is vital to the KIC economy.• Information and communication are the life’s

blood of the innovation process. Regions can experience huge gains just by increasing communication within the region.

• It is often the unplanned interaction that drives the innovation process.

• This only occurs when people interact for some other initial purpose, or when they are in information and communication loops that allow ideas to be combined with other ideas.


Collaboration

• Success in the KIC economy requires high levels of collaboration.

• This can be collaboration between business, government, and universities / research institutes.

• It can also be collaboration among firms, particularly SMEs to overcome the disadvantages of small scale.

• It also can be collaboration among different local governments or between local and central governments.


Context

• Each region / nation has its own context. • Lessons from other places with different local

contexts must be applied with care. • Each region or nation might need its own problem

solving and implementation mechanisms. • The “whats” and “whys” of the KIC economy tend to

be universal, the “hows” context-specific.• Context determines how objectives may be reached

and which obstacles must be overcome.


Constituencies

• Each region / nation has its own constituencies, including the public sector, the private sector, and supporting entities.

• For your location, which constituencies have to be onboard for positive action to take place?

• Local business? Local government? Central government? Supporting players? Others?

• Who has the ability / power to help? Who has the ability / power to hurt?


Communities

• Success in the KIC economy often coincides with a sense of community.

• Winning regions / nations in the KIC economy tend to have high levels of social capital.

• People in successful KIC regions tend to think of “us and us,” rather than “us and them.”

• This requires regional and interpersonal identification and a sense of common purpose.


Cosmopolitan outlook

• Successful regions in the KIC economy tend to have a strong sense of community, but they are NOT isolated from the rest of the world.

• Success in the KIC economy requires being plugged into national, international, and global flows of knowledge, ideas, capital, and people.

• This is the only way to understand external markets / competitors, to connect with external customers, and to incorporate ideas from the rest of the world.


Concentrated effort

• Success in the KIC economy requires regions / nations to be able to identify and address a limited number of key obstacles or objectives at a time.

• This can be facilitated by regional organizations that bring together the public sector, private sector, and supporting institutions to identify and address pressing issues.

• Often the best obstacles / objectives to address first are the easiest rather than the most important.

• Low hanging fruit should be eaten, as the appetizer, not the dessert.


How many “traditional inputs” do we have right?

Hard infrastructure ?

Soft infrastructure ?

Innovative people ?

Supportive policies ?

Suitable finance ?

Attractive working and living spaces ?

Amenities to attract mobile professionals ?

A supportive environment ?

Etc. ?


How many “Cs” do we get on our report card?

Competitiveness ?Comprehensiveness ?Complementarity ?Connectivity ?Communication ?Collaboration ?Context ?Constituencies ?Communities ?Cosmopolitan outlook ?Concentrated efforts ?


Conclusions • Competitiveness is required if nations and regions are to

earn rather than try to borrow their prosperity.• The KIC allows nations and regions to move beyond the

“race to the bottom” by generating and leveraging IP and intangible assets.

• The KIC economy goes way beyond just high-tech industries.

• Winning in the KIC economy requires the right “typical inputs,” but that is only half the game. (or less).

• The 11 “Cs” are also vital to winning in the KIC economy. • This is the part that most economies, particularly in Asia

have trouble with.


Thank You

Michael J. Enright

[email protected]

mailto:[email protected]

Economy & Finance

TCI 2015 Winning in the Knowledge-Innovation-Creative Economy