Opening the 'black box' of regional industrial-innovation systems: Navigating the intermediate innovation capability requirements from regional knowledge creation into industrial value capture

Abstract

Interest in developing regional industrial and innovation policies has steadily increased in the UK and internationally in the last decade. This thesis aims to improve understanding of the theoretical and practical challenges of the translation of regional investments in innovation into successful value capture in local industries. It explores how policy makers might better assess the mix of innovation capabilities required to progress successfully beyond the research space – i.e., technological development, system integration and scale-up. The analysis emphasises the strategic importance of regions assessing whether they have, already or potentially, the appropriate and distinctive mix of necessary, sufficient and competitive innovation capabilities within its own boundaries to achieve its economic impact goals. A particular class of capability, intermediate capabilities, which are particularly likely to be missed in policymakers’ analyses is identified. The thesis reports three streams of work. First, a conceptual framework is developed from innovation systems theory, management (‘resource-based view’), and industrial value chain theories to explore systematically the evolution of innovation capabilities requirements. Those theories consider individual aspects of that evolution, but may not combine all the components brought together in the framework. Secondly, existing policy documents are reviewed, highlighting the potential for improving policy makers’ analyses of regional innovation to assess whether the mix of regional capabilities is sufficient for successful local implementation, or whether projects must move elsewhere to find them. Thirdly, two series of interviews are presented, one to gain insights into how the industrial innovation journey is perceived by different actors in the pipeline, and the other to test the proposed framework with actors in the policy making, research, consulting, academia and industry areas of agri-tech. That was chosen for study due to the complexity of its solutions combining different knowledge areas to form complex capabilities and competencies required to transition new knowledge into industrial value capture, in the very broad sense of improved targets and performance. The thesis proposes holistic capabilities analysis supported by the proposed framework. The thesis concludes by reflecting on the findings from the analysis conducted, the exploration of two agri-tech cases with the proposed framework, and future research opportunities identified throughout this journey.