Regional innovation governance : a model for complex systems of innovation and economic emergence

Paper in proceeding, 2012

Over the last decade, political science has moved far from the traditional economist’s view of the government and public policy as responses to ‘market failures’. One focus of understanding public policy has been on governance, which is a concept including complex public-private interactions through networks of relationships. There is often an assumption of complex socio-economic systems underlying this concept of governance. This type of thinking has been very prevalent in discussions of innovation and economic emergence. Many public policy initiatives to promote innovativeness and growth have been inspired by normative models of capacity building through industrial clusters, triple helix and regional innovation systems. While providing important insights about network and knowledge relationships, existing models poorly explain the influence of governance on innovation and economic emergence. In order to understand the issue of risk and uncertainty in innovative entrepreneurship, we propose a conceptual model that includes the impact of governing in complex systems through innovation policy. Due to the interdependency of several actors, the centers of decision-making in innovation are nested into complex systems of governing. This means that the obviously visible indicators of innovation and growth, which are often used, do not match the theoretical linkage between entrepreneurial economic emergence and capacity building. Instead of looking at firm start-ups and patents or the immediate effects of public policy through a cost-benefit analysis, our model of innovation governance requires that we delve deeper into social and knowledge relationships at the regional level. Innovation systems represent a typical example of many organizations and/or decision-centers that are formally autonomous, but are in fact linked together by an overarching set of rules, networks and relationships in systems, defined as polycentric, based on rules/norms in use to regulate access to information and common pool resources in such systems. We therefore start from this underlying theoretical insight that innovation governance depends upon capacity building among the heterogeneous organizations (university-government-industry), each based on different attributes of norms and incentives, networks and global relationships, but nevertheless tied together by overarching rules and aims of innovation and entrepreneurship. As will be further developed in the paper, we suggest that this process of capacity building during emergence and entrepreneurial uncertainty, relay on a sequence of events explaining the success and directionality of innovation through specific institutions and an associated , subsequent, organizational structure for University-Industry-Government co-operation at the local and regional level.