TCI 2015 Winning in the Knowledge-Innovation-Creative Economy

Winning in the
Knowledge-Innovation-
Creative Economy
Michael 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 Enright
University of Hong Kong and
Enright, Scott & Associates Limited
TCI Conference, 2015
This presentation is incomplete without the spoken commentary.

November 2015 © Copyright Michael J. Enright
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
3

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”
4

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
5

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.
6

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
7

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)
8

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
9

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
10

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
11

The “traditional inputs” are necessary, but
not sufficient to win in the KIC economy.
Winning in the KIC economy also requires
the 11 “Cs”.
12

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.
13

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.
14

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.
15

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.
16

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.
17

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.
18

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.
19

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?
20

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.
21

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.
22

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.
23

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. ?
24

How many “Cs” do we get on our report card?
Competitiveness ?
Comprehensiveness ?
Complementarity ?
Connectivity ?
Communication ?
Collaboration ?
Context ?
Constituencies ?
Communities ?
Cosmopolitan outlook ?
Concentrated efforts ?
25

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.
26

Thank You
Michael J. Enright
michaelenright@enrightscott.com
27

TCI 2015 Winning in the Knowledge-Innovation-Creative Economy

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