Slawomir Pastuszka, The Importance of Innovation to the

Sławomir Pastuszka1
THE IMPORTANCE OF INNOVATION TO THE
COMPETITIVENESS OF REGIONS
Introduction
The article is devoted to the aspects of competitiveness and innovation of
regions. The main objective of this article is to discuss the dependence between the
regional competitiveness and innovations. There is no doubt that nowadays the
ability of economy to create and implement innovations is one of the most important
factors influencing the development of enterprises and the competitiveness level of
regions. The most competitive regional arrangements gather on their area enterprises
of a high market segment making innovative products. Such enterprises require high
level of competence and at the same time, create well paid workplaces that give
multiplier effect to the development of the whole region2. Regions, which gain and
enhance their advantage over other areas - competing mostly at the expense of
production, are those with innovative enterprises specializing in the production of
goods and supply of services able of spreading over national and international
markets.
The article consists of five parts. At the beginning was presented selected terms
concerning regional competitiveness, showed the most important determining
factors of achieving a suitably high level of competitiveness for a given region,
thereafter indicated the role of innovations in regional competitiveness and public
policy. Subsequently explained what the impact of innovation in enhancing regional
competitiveness and characterized public policy conducive to innovation. The article
ends a brief summary and key conclusions.
1
2
Sławomir Pastuszka, Ph.D., Jan Kochanowski University, Kielce.
G. Gorzelak, B. Jałowiecki, Konkurencyjno regionów, „Studia Regionalne i Lokalne”, No 1(1)/
2000, p. 7-8.
137
Regional competitiveness – terminology
Competitiveness can be simply defined as the ability of enterprises to supply
goods and services, which can meet the requirements of international market also
holding high and stable income level. According to the European Commission,
competitiveness is the ability to supply goods and services, which succeed on the
international markets, and at the same time hold high and stable income level or more
generally – the ability of enterprises, industry, regions, countries and supranational
geographical areas opened to international competitiveness to achieve relatively high
income and employment level3. Since, an enterprise is the basic element of any
economy, the competitiveness of national and regional economy is the result of the
competitiveness of enterprises and economy sectors.
Regional competitiveness is defined as a predominance of one region over other
regions, which is the outcome of service offer made for the existing and potential
region users, who are habitants, enterprises, investors and visitors4. It is the achieving
of a high, stable and constantly rising standard of living and high rate of employment.
The origin of competitiveness is modern material, institutional and intellectual
infrastructure. In the area of regional development, competitiveness means the
ability of regions to adapt to the changing conditions with respect to maintain or
improve their position in the rivalry among regions. Direct rivalry manifests itself in
a competition for access to different kinds of outside benefits, including the
competition to attract desirable investors5. Indirect rivalry manifests itself in the
efforts of local authorities to improve surrounding conditions for the enterprises
operating there and thereby influence the economy profits made in those regions6.
The essence of region competitiveness is the creation of the right conditions for
enterprises enabling them to gain competitive advantage in order to accomplish
region development. That is why competitive regions are those which win global
competition for the assets (especially creative assets - both material and human ones)
and those, which create conditions enabling their enterprises to gain high
competitiveness level7. Both aspects of territorial competitiveness are related to each
other. Innovative assets flow only to profitable (for them) places, where they
3
European Commission, Sixth Periodic Report on the Social and Economic Situation and Development
of the Regions of the European Union, Brussels, Luxembourg 1999, p. 32.
4 A. Klasik, Konkurencyjno
województwa l skiego na tle innych regionów. Uj cie syntetyczne, [in:]
Województwo l skie. Integracja, konkurencyjno , nowe inicjatywy, II l skie Forum Rozwoju
Lokalnego i Regionalnego, Akademia Ekonomiczna i Górno l ska Wy sza Szkota
Przedsi biorczo ci im. K. Goduli, Katowice 2001. p. 100.
5 H. Godlewska, Lokalizacja działalno ci gospodarczej. Wybrane zagadnienia, Wy sza Szkoła Handlu
i Finansów Mi dzynarodowych, Warszawa 2001, p. 26.
6 T. Markowski, Konkurencyjno
i współpraca wewn trzregionalna podstaw nowoczesnej polityki
rozwoju regionalnego, [in:] Podstawowe problemy polityki rozwoju regionalnego i lokalnego,
Z. Mikołajewicz (ed.), Opole 1997.
7
T. Geodecki, G. Gorzelak, J. Górniak, J. Hausner, S. Mazur, J. Szlachta, J. Zaleski, Kurs na innowacje.
Jak wyprowadzi Polsk z rozwojowego dryfu, Fundacja Gospodarki i Administracji Publicznej,
Kraków 2012, p. 11.
138
improve conditions for another companies, as they thicken local institutional and
social network increasing opportunities for cooperation. In a medium and long term
prospects innovative assets lead to differentiation between the regions, because by
creating new well paid and demanding high qualifications workplaces, at the same
time they attract different kinds of new investments in some regions, but in some
not8.
Factors of regional competitiveness
The competitiveness of a region depends on the economic, social, technological
and ecological aspects. From the viewpoint of economics the criterion of high
competitiveness level of a region is a profitable economic activity structure with
a large input of service and industry employees, high qualifications of workforce,
a proper number of new technologies, strong and active institutions supporting
business and good accessibility to public transport, conditioned by diversity of
transport infrastructure9.
Due to the fact that the potential of enterprises depends on modern technologies
and new organizational resolutions, it is particularly important to create and develop
an effective network of institutions supporting entrepreneurship and technology
transfer, that is business incubators, exploratory research centres, and special
economic zones. Placing enterprises near such seats of learning and innovation is the
condition to have a close access to knowledge and therefore gain advantage over
competition. Crucial for regions competitiveness is also the rise of direct foreign
investments establishing new products and technologies, which indirectly enforce
improvement of workforce qualification. Realisation of such investments in a region
conduces rise of income and employment and consequently translates into
improvement of economic situation of a region. Social factors involve size and
quality of human resources (age and sex structure, level of education, horizontal and
vertical social mobility, work attitude), the quality of health and social care.
Guarantee of good availability to social infrastructure, which determines the level of
education, qualifications and health condition of society, conduces rise in economic
activity and community involvement in the improvement of living conditions.
Among these factors, it is also important to create ‘learning administration’,
i.e. rising efficiency of public administration. Proper intellectual background
translates into an ability of using relief funds, treated as an incentive and a chance
for regions. Saving cultural heritage and tradition, as a favourable element for
creating a real competitiveness climate is important for the social sphere of regional
competitiveness. Technical factors are closely connected with the quality of
8
G. Myrdal, Teoria ekonomii a kraje gospodarczo nierozwini te, Polskie Wydawnictwa Gospodarcze
1958, No 2, p. 44-52.
9
T. ółtowski, Ocena szacunkowa (ex-ante) wst pnego projektu Narodowego Planu Rozwoju na lata
2007-2013 w zakresie analizy warunków społecznego-gospodarczych pomocy w kategoriach
konkurencyjno ci i innowacyjno ci przedsi biorstw, Warszawa 2005, p. 17.
139
transportation infrastructure determining region’s availability for potential investors
and abilities of broaden markets. Improvement of transportation network,
determining the availability and consisting of national and regional roads, railway
and airports, where intense development areas arise, increases effectiveness of
economy. Exploratory research infrastructure is of a special importance, as it
supports innovative processes and higher education. Ecological competitiveness
manifests mainly in aspiration for balance in using nature values and aspiring for
economic development. Guarantee of high quality of sewage treatment systems and
waste management contributes not only to protect nature values better but also to
enhance inhabitants’ lives10.
Regions competitiveness depends also on the self-image they can create, a vision
of their qualities and their future in general. If, however, owing to some reasons the
image of regions, widespread in public opinion, works against them, it is essential to
change it in order to rise their competitiveness level. Sometimes, it might be even
more difficult than changing existing conditionings11. It can be assumed, that the
competitive position of a region is a kind of summary of its potential and resources
developed so far.
Regions showing high level of competitiveness are most often characterized by:
– high level of infrastructure provision, modern factors of production, which give
comparative advantage and cause positive effects and benefits of spatial
concentration,
– high level and flexibility of labour market specialization,
– innovativeness, in both technological and social aspects,
– existence of partnership networks and connections between competing
enterprises and exploratory research centres,
– rich network of institutions (actors), of relatively predictable conduct and a high
reactivity level for new challenges,
– existence of local leaders, that can gather local actors around them and lead to
agreement of all important powers around common strategy12.
Innovations – conditions of creation and development
In terms of an open economy competitiveness aspects of an enterprise or/and
a region do not only depend on costs level, natural or geographical qualities, but also
the ability to create new products and services satisfying requirements of the market,
10
A. Klasik, F. Ku nik, Konkurencyjny rozwój regionów w Europie, [in:] Konkurencyjno miast
i regionów, Wydawnictwo Akademii Ekonomicznej w Krakowie, Kraków 2001, p. 21-22.
11
M. Klamut, Konkurencyjno regionów, [in:] Konkurencyjno miast i regionów Polski PołudniowoZachodniej, Wydawnictwo Akademii Ekonomicznej im. Oskara Langego we Wrocławiu,
Wrocław 1999, p. 58.
12
J. Szlachta, Programowanie rozwoju regionalnego w Unii Europejskiej, PWN, Warszawa 1999,
p. 12-16.
140
that is their capacity for innovativeness, to create something new13. According to
Joseph Schumpeter, the author of so-called creative destruction, innovation pertains
to technological solutions, that enable enterprises to adapt to changes, gain advantage
over competition, win new markets and as a result reaching a long-term growth. It
manifests itself in launching a new item or a new production method, opening of
a new market, obtaining a new source of materials or semi-finished products and
launching a new organization of economic process in production and in the area of
commercial exchange of products14. Innovations are particularly valuable ‘products’,
because they do not wear out in contradistinction to natural sources or the machines.
What is more, a good idea may even fall in value while using. Innovation can be
used as a base to generate other innovations. Not only products themselves but also
the procedures, proceeding patterns and systems are considered as innovative,
providing that they fulfill the conditions of novelty, that is they have not been known
and used before. Opportunities to improve innovativeness of enterprises are seen in
concentration of funds for pro-developmental investments, better access to
financing, technology and market and improvement of human resources. However
the threats to innovation are: growing bureaucracy limiting unfettered operation of
small- and medium sized enterprises in market, too high taxes, lack of public
authorities support, complicated and often changing legal regulations, drop in
employment rate and financial outlay in research and development sector15. Using
innovation in a concern of production leads from the invention, through the
innovation, to the imitation. Apart from technical activity, innovation process also
involves scientific, organizational and social activity (process, institutional and
cultural innovations). The source of innovation, modernity and progress is organized
work of specialized groups working, sometimes for years, on new solutions.
Societies of high level of sociocultural evolution are characterized by high ability to
create and accumulate innovations. On the other hand, improvement in quality of
goods and services underlies changes in a way and level of living of a region’s
inhabitants16. Innovative may be not only an enterprise, but also a territorial district,
which is capable of changes, improvements, introducing reforms and innovative
solutions in different areas of socioeconomic life, in order to improve effectiveness
of units supporting region development.
Innovativeness of a region
Innovativeness of a region can be understood as a capacity of economic subjects
to create and take advantage of new information, knowledge, concepts, ideas, results
13
European Commission Working Document, Innovative Strategies and Actions. Results from 15 Years
of Regional Experimentation, Brussels, Nov. 2007, p. 2.
14
J. Schumpeter, Teoria rozwoju gospodarczego, PWN, Warszawa 1960, p. 104.
15 A. Knap-Stefaniuk, Innowacje i konkurencyjno
przedsi biorstw, „Zarz dzanie Zmianami”,
Biuletyn Polish Open University, Wy sza Szkoła Zarz dzania, May 2010, No 5 (39).
16
A. Potoczek, Polityka regionalna i gospodarka przestrzenna, Wydawnictwo TNOiK, Toru 2003,
p. 60.
141
of research and development works, and to bring new organizational solutions into
effect. Relations between innovation and competitiveness regions shows Jacques
Boudevill, Davin, Beguin Paelinck17. The work of these researchers sectoral growth
poles theory Francois Perroux18. In their opinion, a special role in the development
of the regional economy plays a developed company, all industries branches
understood as an industry leading technically advanced and innovative, with
numerous links with other industries. These poles (centers) affect the location of new
businesses, and thanks to the rapid development they impact on neighboring entities
and with a high level of communication development process naturally spreads
rapidly. Growth pole is able to generate growth in the economy of the entire region
through the multiplier effect and spread network of cooperative relations. First, the
creation and diffusion of innovation occurs in large cities (growth centers), followed
by medium-sized cities and at the end in small towns. Similar opinion expresses
Joseph Schumpeter, who stated that the innovations are the driving force of the
development of the regional economy. Spatial concentration of innovation depends
mainly on the location enterprises able to network-organized cooperation. The
importance of innovation for economic development emphasize endogenous growth
theory. One of the essential conditions of such a development is to ensure conditions
for the spread of knowledge and skills19.
The innovative potential of the region depends in part on the technological and
human resources in a particular economy, also reflects the investments and policies
of the authorities and the private sector, which affects the attractiveness and
productivity of the research and development in the country. This potential is derived
from the innovation of its inhabitants and companies operating there. According to
experts, the internal potential of innovation consists of a staff (her knowledge and
experience, skills and qualifications and the management of available resources,
information management), research and development and technology. External
sources of innovation are primarily universities and research and development units,
but also the competitive companies or customers/vendors.
Regions, where innovations are created and used develop faster. These areas
gather on their territory enterprises from the sectors of economy connected with new
technologies. When innovative enterprises decide on location, they take into account
such factors as presence of workforce, universities and research institutes, quality of
natural and social environment, attractiveness of housing offer, availability of
17
J. Grzeszczak, Bieguny wzrostu a formy przestrzeni spolaryzowanej, Instytut Geografii
i Przestrzennego Zagospodarowania PAN, Prace Geograficzne, Wydawnictwo Continuo Wrocław
1999, No 173, p. 15-16.
18 F. Perroux, Economic Space: Theory and Applications, “Quarterly Journal of Economics”, Vol. 64
(1), February 1950, p. 89-104; A. Jewtuchowicz, Bieguny wzrostu, [in:] K. B. Matusiak (ed.),
Innowacje i transfer technologii. Słownik poj . Wydanie III zaktualizowane, PARP, Warszawa
2011, p. 26-27.
19
S. Pastuszka, Interwencjonizm czy liberalizacja w polityce regionalnej?, „Gospodarka Narodowa”
No 6/2014, p. 5-29.
142
educational institutions, education, culture and transport, political climate of
economic activity20.
Taking into consideration above mentioned factors, it is grounded that nowadays
in a process of creation, adaptation and propagation of innovative activity the most
important role falls to big cities, hence the fastest developing regions are those,
where agglomerations (being centres of growth) are located. In cities there is
concentration, differentiation and intensification of new kinds of activities based on
knowledge and the newest technologies21.
Innovative policy in a region
A significant influence on the growth of a region’s innovativeness has innovative
policy, which forms through the realization of regional innovation strategy, RIS22.
RIS should define strategic objectives of innovation policy and the tactics to achieve
them based on the changing situation, both in a region and its surroundings. For the
effective realization of RSI assumptions it is important to make a partnership
creating regional innovative system, RIS. Regional Innovative System is understood,
as a network of public and legal institutions, which the activity and co-operation
enables the manufacture, use and dissemination of knowledge, innovation and new
technologies in the region23. Constitutes a diverse set of actors (actors) that affect the
processes of innovation and links (relationships) between them. It is a system
entities, interactions and events that arise as a result of synergy in a particular
territory and lead to enhanced absorption and diffusion of innovation in the region.
RIS is a system interdependencies and linkages occurring between science, R&D,
industry, education system, finance and public authorities favoring collective
processes of adaptation and learning. The basis of its actions is the existence of
networking and innovation environment24. Is the basis for building the region’s
competitiveness in a global economy, where innovation, knowledge and learning are
key factors for economic success. It enables adaptation of regional economies into
the process of globalization.
The groundwork of such system consists of three intermingling environments of
‘gold triangle’ – public, education and business sphere. Co-operation of these
environments favours and facilitates production, usage and exchange of information,
20
G. Benko, Geografia technopolii, PWN, Warszawa 1993, p. 19-20.
M. Castells, Społecze stwo sieci, PWN, Warszawa 2007.
22 E. Nowi ska-Ła niewska, Regionalne strategie innowacyjne wyzwaniem i szans dla polskich
regionów w kontek cie procesów integracyjnych, „Studia Regionalne i Lokalne”, No 2-3/2002,
p. 91-108.
23
T. Markowski, J. Kot, D. Stawasz, E. Stawasz, Regionalne systemy innowacji jako podstawa
budowania konkurencyjno ci polskich regionów, „Samorz d Terytorialny” No 6/1996, p. 58
24
A. Jewtuchowicz, Terytorium i współczesne dylematy jego rozwoju, Uniwersytet Łódzki, Łód 2005.
21
143
knowledge, innovation25 and new technologies in regions, which in the stage of post
industrial societies development, became spiritus movens of transformation of high
developed countries and regions. Components of innovative policy are formed under
the influence of some specific aspects, such as financial policy, legal and institutional
conditions, value systems, culture, quality of humans and level of social capital. Proinnovation policy is effective especially where existing human capital forms good
potential to create and adopt innovation and where a common culture of respect for
human creativity exists. In a competitive rivalry win those regions, which
permanently adapt to changes, create and/or take advantage of modern technological
and process solutions, engage in new spheres of life and thereby base their economy
on knowledge (knowledge based economy)26.
Conclusions
Both, enterprises and territorial units are subject to competition laws.
Competitiveness, with respect to regions means the ability to create conditions to run
economic activity, which makes products and offers services of high innovative
potential. It can be said that, under the circumstances of globalization, competitive
regions are innovative regions, that is, those which can permanently create and
absorb innovations and consequently adapt to changes in the environment. Regions,
which want to enforce their competitive potential must concentrate their actions and
funds on the creation of conditions for innovative environment conducive to
organizational changes, exchange and deepen knowledge, creating atmosphere of
appreciation and respect for innovators, and creating pro-innovation attitude and
awareness concerning introducing changes in a society.
Public authorities such regions should create the conditions conducive to gaining
a competitive advantage by enterprises based on knowledge and innovation. Public
policy should have a positive impact on the development of scientific institutions,
research and training, and strengthening networking between these institutions and
enterprises and social organizations. Implemented measures should contribute to
build capacity for creating own innovative solutions in a given region, as well as
creating demand for innovation among local entrepreneurs.
25
26
Information is awareness, tip, instruction. On the other hand, knowledge is elusive and difficult to
copy resource company, which consists of all kinds of useful all kinds of useful information, they
others do not have and can not use. A. Ko mi ski, Jak stworzy gospodark opart na wiedzy?,
[in:] Strategia rozwoju Polski u progu XXI wieku, Kancelaria Prezydenta RP i PAN, Warszawa
2001.
The development of a knowledge-based economy occurs when with the cooperation of public
authorities, economic sector, academic institutions, and research units in the development and
diffusion of innovation, companies use knowledge (new technologies and organizations) as the
source of their competitive advantage. Cooperation individual sectors must provide benefits to all
entities.
144
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Abstract
The article pointed out the key role of innovation in the level of region’s competitiveness.
It is assumed that the competitive region is an innovative region, which is able constantly
create an absorb innovations, and consequently, to adapt to changes in the environment.
Author pointed to the region’s competitiveness factor, including economic, social, technical
and ecological.
Znaczenie innowacji dla konkurencyjno ci regionów
W artykule wskazano na zasadnicz rol innowacji w poziomie konkurencyjno ci
regionu. Przyj to, i e region konkurencyjny to region innowacyjny, czyli taki, który potrafi
stale tworzy i absorbowa innowacje, a w konsekwencji dostosowywa si do zmian
w otoczeniu. Autor wskazał na uwarunkowania konkurencyjno ci regionu, w tym czynniki
ekonomiczne, społeczne, techniczne i ekologiczne.
146
Keywords: Competitiveness, innovations, region, knowledge, new technologies
Słowa kluczowe: Konkurencyjno , innowacje, region, wiedza, nowe technologie
Sławomir Pastuszka, Ph.D., Jan Kochanowski University, Kielce.
147