The Importance of Linkages in Innovation Systems

The various components in an innovation system are the actors and the institutions. The actors are the businesses, governments, public and private research organizations, and universities. Sometimes, actors are known as organizations. Institutions are the framework conditions within which the actors function: the laws, regulations, cultural norms, preferences, social rules, technical standards, education, competition, corporate governance, finance, intellectual property rights, and public procurement.

Linkages are not included in the linear model of innovation. However, they are the key ingredients of the interactive model of innovation that provides connections between each of the different steps of the linear model.

The Innovation Systems Conceptual Approach assumes that growth in linkages leads to improved performance and the quantity of interaction is important but so is the quality. The more knowledge and technology flow that there is in the linkages, the better.

Linkages between actors and institutions can take various forms, including joint research, personnel exchanges, cross-patenting, purchasing of equipment, etc.

Four specific types of linkages are: 1. Joint industry activities. 2. Public and private partnerships. 3. Diffusion of knowledge and technology to firms. 4. Personnel mobility.

1.       If businesses are linked, either formally or informally and do collaborate, it raises the efficiency and effectiveness of the innovations system. This may seem counter-intuitive because they are competitors. However, many firms do indeed collaborate but more in emerging fields with high development costs such biotechnology, nanotechnology and material science. They pool technical resources to achieve economies of scale and to gain synergies from complementary human and technical assets. An employee from company A is not shared with company B but rather, the technician who was employed in a laboratory that is used by company A and company B can give ideas and advice to both.

2.       Government- funded research institutes, government-funded universities and private business firms collaborating with one another is another important type of linkage which has the potential of enhancing innovative systems efficiency and strength. The quality of public research infrastructure and its links to industry is an important asset for strengthening an innovation system. Universities produce basic knowledge for industry and are a source of new methods, instrumentation and skills. Industry-supported university research is now becoming increasingly common as are strengthening university/industry linkages because business firms realize that they can have access to cutting-edge knowledge, cutting-edge technology and tools by cooperating with universities. On the other hand, universities, by cooperating with industry, are better able to demonstrate their worth or their usefulness to society at large.

3.       The third type of important linkage is technology diffusion. Diffusion of innovation is usually a slow-moving process that plays out over years. However, because businesses have to report quarterly, semi-annually, and annually about their performance, they put technology to work fast by adopting and using innovations on products developed elsewhere. They have an incentive to use, to market, and to commercialize the technology as quickly as possible so they can increase the profits. Technology diffusion can be speeded up by introducing private business firms into the arena. Knowledge about technologies may come from customers and suppliers, as well as competitors and public institutions. Technology diffusion is particularly important for sectors and industry that may not have R&D themselves. Public research institutes and public universities may not commercialize and market the technology but they're creating it and, in that case, technology diffusion is important.

4.       Movement of people and the knowledge that they carry with them is important in any innovation system. Personal interactions, once again, can be formal or informal and represent a significant channel of knowledge transfer within industry and between public and private sector. The ability to locate and identify information and to access networks of researchers and personnel is a valuable knowledge asset. Having the knowledge is one thing but having the ability to find out who has that tacit knowledge is also an essential asset. Absorptive capacity refers to the extent to which the receiver can make sense of the knowledge transfer. Tacit knowledge refers to those aspects of knowledge that can be that cannot be easily codified and cannot be transmitted or shared via writing. It can only be transmitted through other means like training, through experience, by experimentation or from observation. Tacit knowledge involves learning and skill. The classic example of tacit knowledge is how to ride a bicycle. It would be extremely difficult to write in a manual all the processes, all the procedures, all the steps that are necessary in order to have you understand how to ride a bicycle. Rather, it's much easier for someone who is learning how to ride a bicycle to do so through training, experience, experimentation, and from observing someone else do it.

 Generally speaking, it is more desirable to have stronger linkages between components of innovation system. It is, however, possible for linkages to become too strong. They become so overwhelming that the two actors or the components that are linked to one another are unable to see beyond their specific narrow connection, neglecting other links and the overall performance of the more general innovation system.  Otherwise, linkages are known to be effective means of improving or strengthening any given economy's innovation system.
from Coursera course, Science and Technology and Society in China. Week 3. by Naubahar Sharif, The Hong Kong University of Science and Technology