What drives regional innovation in the EU?

Creative industries can provide all-important inspiration

Prof Leo Sleuwaegen and researcher Priscilla Boiardi have published a paper that analyses EU regional patenting activity − a strong indicator of regional innovation − within a system of creative change driven by 4 fundamental factors: institutions, intelligence, infrastructure, and inspiration.

Prof Leo Sleuwaegen: “We developed this paper from research that we conducted for the Flanders District of Creativity. In brief, we were investigating what makes regions creative in terms of innovation, and how Flanders is performing benchmarked against all the other regions in the EU.

“Concretely, we studied the intermediate output of innovation − that is, the knowledge output in terms of patents, prior to the commercial product output − where we find that there are 4 basic factors, or drivers, that are key to explaining regional innovation. We found that the model that we’ve developed and explain in the paper is quite good at predicting the following capabilities:

  • 1. Institutions: to what extent does the region have laws and regulations that favour innovation (IP protection, tax regulations, etc., the whole set of regulations that affect the institutional environment of firms engaged in R&D and producing knowledge in the region);
  • 2. Intelligence: to what extent does the educational system include a well-developed university system, producing graduates in the fields of science, technology and innovation;
  • 3. Infrastructure: to what extent are there what we call techno-economic partners available, to what extent do public research institutions support private firms to engage in R&D and to transfer knowledge, and to what extent is a good ICT infrastructure provided.

“The 4th factor − and the one we are emphasising − is inspiration. This factor measures to what extent people are occupied in creative jobs.

“This is different from the educational system supplying highly educated people − here, we are examining to what extent people are employed in creative industries. We borrow from the work of Richard Florida, who developed the concept of ‘the creative class’ − which, in addition to people working in R&D departments, includes writers and artists and everyone in creative jobs where you come up with new ideas and new combinations that change people’s perspectives.

The importance of institutions & inspiration

“Our goal in studying these factors all over Europe was to contribute by saying: be careful, it’s not only education and the traditional factors that matter − inspiration, the creative class, is also important in measuring output in terms of knowledge.

“We find that there are 2 factors that have both direct and indirect impact on the number of patents developed in the regions: institutions and inspiration. In addition to their direct impact, these factors contribute something extra through their system-wide impact as well.

“When we focused on the performance of Flanders, we found that our region is doing well overall, but we are not doing as well as other regions in terms of institutions and inspiration. So, in addition to the initiatives that have recently been taken, Flanders needs to stimulate the creation of more creative jobs and our institutions need to become more innovation-friendly.

“Of course, this assessment is relative − it compares us to the best regional performers in the EU. In terms of education and infrastructure, we’re doing quite well. Our research indicates that we can do even better by improving the institutions and inspiration factors.

Implications for practitioners

“The message for practitioners is to look more often for creative input outside your traditional boundaries and activities. Companies that use input from the creative industries − and, in particular, the arts and other culturally creative fields − do much better in terms of new product design and development. Practitioners should stay open to this kind of creative input and apply it to their own context.”

Source: 'Creativity and regional innovation: Evidence from EU regions' by Leo Sleuwaegen, Professor of International Strategy, KU Leuven and Vlerick Business School, and Priscilla Boiardi, KU Leuven and Vlerick Business School. Published in Research Policy 2014, 43(9): 1508-1522

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