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Effective National Innovation System as a Prerequisite for the Formation of Knowledge Based Economy

Gagik Vardanyan, проректор, доктор экономических наук, профессор

Армянский государственный экономический университет, Армения

Участник конференции

The article is devoted to the problems of formation of an effective national innovation system. “Knowledge Revolution” or the acceleration of the knowledge creation process as a motive, driving force for the knowledge based economy, contributes to the human progress. The history shows that the innovation development takes place in those countries where together with market forces the State has an important role.

Keywords: Knowledge Revolution, knowledge based economy, intellectual potential, national innovation system, long waves of accumulating knowledge, technological innovations.

 

If in the industrial era success was achieved thanks to a few inventions, now it is impossible. In the conditions of Globalization preservation and strengthening of the competitive positions are based on constant raise of innovative activity of separate companies as well as a whole country. The time requires that the majority of the population should be not only literate but also be ready for the changes facing them. Health, continuous education, and the high level of culture are needed for it. Since the 2nd half of the 20th century, the volume of the creation and dissemination of knowledge has increased significantly. Modern information and communication technologies have made it possible to work together researchers from different places and countries. It increased labor productivity and led to an acceleration of achievements in scientific research as well as to the creation of new knowledge and technologies.

Increased speed of creation and dissemination of knowledge has led to the rapid spread of modern and efficient production technologies. Besides the opportunity to take-off, rapid development came forth and it led to increase of global competition.

 “Knowledge Revolution” or the acceleration of the knowledge creation process as a motive, driving force for the knowledge based economy contributes to the human progress. It is important to examine what position each country has in this process. A good position in a global “knowledge revolution” for each country in the post-industrial era is the guarantee for a stabilized development. For this purpose a society of knowledge should be built and the knowledge based economy should be developed.

At the same time not only knowledge creation is important but also its effective use. Formal and non-formal institutes of the society should contribute to this. The society, the knowledge based economy can serve it.

It is necessary to affect the mechanisms and the system of accumulating knowledge in each country first of all by relying on the inner possibilities to increase the intellectual potential and on the own strength to realize this potential for solving the problems of accumulating knowledge and developing the trajectory of innovation. Knowledge itself cannot transform economy and there is no guarantee of return on R & D and higher education. Many countries including big ones such as Brazil, India and some post soviet countries mainly invested in the sphere of scientific and technological utilities without getting any return as far as scientific and technological knowledge brings profit when it is used in the complex system of institutes and actions which is known as national innovation system[1].

Innovation development has no alternative from the point of qualitative changes in the social-economic life as well as from the point of creating guarantees for the long term development of the country. At present, more than ever the gap between poor and rich countries is closely connected with the ability or non-ability of a country to offer a new product to both local and international markets. Such ability is created in the case of existence and effective realization of the innovative capacity of the country. Innovation capacity is not only a simple complex of subjects and institutions acting in the sphere of the innovation activity. First of all it is the quality of their interaction.

The supporting policy of the technological development is known as “innovative policy”. It is considered that the exact definition of the innovative policy originated from 1960-s[2]. Since then such policy was spread and improved till the development of the “national innovation system” conception.

With the transition to a new economic system even after two decades, the economies of new independent countries including the Republic of Armenia did not become effective. On the contrary, regress is evident in many spheres[3]. The existence of a market economy is necessary but it is not a sufficient condition for the social-economic development of the society, that is the process in which the person’s wishes and opportunities to satisfy his own need as well as the needs of other people[4] and the possibility of production of public goods are increased. The state should have a proper intervention in the social, scientific, and other spheres where the private sector is not able to self organize or it is not interested in investments.

The history shows that the innovation development takes place in those countries where together with market forces the State has an important role. Moreover, the State should not only finance such development but create systems and mechanisms contributing to the interaction of the subjects in the innovation processes.

The post soviet countries are still distinguished with their education level and with the index of human potential development. However the existence of definite knowledge is not sufficient for welfare, it should be transferred into a market product. A new effective national innovation system should be created for the latter. The following fact can prove the above-mentioned: in spite of the existence of the legislative basis in the Republic of Armenia to stimulate the innovation activity, however in 2008 Armenia ranked the 101st place out of 134 for the quality of scientific- research organizations and the 116th place for the index of “science-product”[5].

We should first understand what is a national innovation system (NIS), its characteristics and functions. According to the international definitions NIS is a network of institutions of state and private sectors. the actions and interactions of which stimulate, spread new technologies (Freeman, 1987) as well as the elements and the relations which affect the production, the spreading, and the use of the new and economically effective knowledge. This system of interrelated institutions that create, preserve and transfer knowledge, skills and industrial patterns which depend on new technologies. (Metcalfe, 1995).

We can distinguish the following main characteristics and functions of NIS: a) Institutes, organizations, companies that have direct relation to the creation, spreading, the use of knowledge, and their transformation into new technologies, as well as institutes that carry out the protection of the rights of the intellectual property in every stage of that cycle. b) Stimulating and supporting policy that makes the innovation activity easier, economically useful and profitable. c) The interrelation of state and private sector institute, Scientific Research institutes, universities and industry.

According to the approaches of the Organization of economic cooperation and development (OECD) in the restricted sense institutes and organizations of NIS include the Government, research commissions, and associations that function as mediators between the Government and the researchers, universities, social and other private companies and organizations that play an important role in the national innovation system (state laboratories, organizations, transmitting technologies, joint research institutes, patent offices, teaching organizations and others)[6].

According to OECD in a broad sense national innovation system includes the elements of NIS in the restricted sense, economic, political, and other social institutes that affect the educational and research activity, for example national finance system, its monetary policy, internal organizations of private companies, pre-university education system, labor market, institutes that implement the regulatory policy (pic. 1).

Picture 1. The Model of National Innovation System

 

The State’s active participation has a vital role in the initial stage of creation of the innovation system. In the course of creating such a system that role can grow into a new interrelation.

Despite the importance of the expansion of innovative systems and involving the institutes, however, intensive exchange of the knowledge between the components of the national innovation system is decisive determinant of its distributive power[7]. The guarantee of the effective function of the system is the policy and the developers’ focus on different interrelations between the actors inside and out of NIS[8].

Creation of such structures of the state support for the innovation system as an innovation fund, innovation- technological centre, incubators, techno parks, industrial clusters, venture funds, technology transmitting systems play a special role and .

It should be noted that the frames of NIS are not restricted with the above mentioned. The formation of sub national or regional innovation systems (RIS) also is very important. It is especially important for the Republic of Armenia. At the same time it is advisable to create innovation clusters in Transcaucasia and Central Asia. It will be significant for regional economic development.

The world experience shows that within a few decades a technological breakthrough can be achieved. For this purpose own knowledge should be accumulated in correspondence with the world trends in the sphere of science development. In this regard “Catching your own wave” is the most important thing.

Based on a number of researches we can assume the existence of long waves of accumulating knowledge (according to T. Rainov: long waves of scientific discoveries) or big cycles of accumulating knowledge. In the beginning of the 5th “K- Wave” which can be truly called “a long wave based on the knowledge” post soviet countries “were busy” with system changes and state building. Essentially, the “downward” wave of that tsunami caused the last blow to the USSR. Then the whole power of the “information revolution” and “knowledge revolution” the product of which was diligently “collected” by the developed countries for almost two decades, collapsed on the “new-formed” countries. Based on assumption that the upward wave of these cycles starts 20-25 years before “K-Wave”, we can state that the next long wave of accumulating knowledge and raising the intense innovation will start with the end of the last economic crisis. According to Kondratev logics the 6th “K-Wave” will start in 2035-2040. So, “Catching the wave” should be started now - in the beginning of the 6th “long wave” of accumulation of the knowledge.

The above mentioned can serve as the basis for formation of the national innovation system in many post soviet countries. The formation of the national innovation system can have a definite significance to lead countries into an innovation way of development. First of all effective state intervention  should exist in scientific and other spheres.

The rapid formation of NIS, achievement of close cooperation among its participants has a vital importance for the post-soviet countries. The problem is that the pace of change does not leave time: the best way to escape economic crisis and further collapses is the realization of the effective innovation policy which is possible only in the case of existence of the corresponding mechanisms and systems.

  One of the ways to fasten above mentioned processes is the recovery of the innovation systems of post-soviet area and close work with the clusters of research and development of the technological leader countries.

  The world experience shows that the independence of the organizations included in the innovation system is the main characteristic of the system. The systemic approach supposes the focus on providing the main frames for improving the conditions for companies and industry branches, especially on a long-term policy directed to stimulate the realization and spreading of the knowledge, of the clustered innovation and for the industrial activity.  It is rational to form a systemic approach by means of cooperation between the state and the private research organizations, industrial associations and companies as well as by means of broad economic policy.

  Fundamental investigations should be the object of the state’s attention. At the same time,  the dates of transformation of the latter’s results into application development should be limited thank to the close cooperation of the academic and business structures. As it is noticed in the UNESCO document named “To the knowledge society”,  the innovation system presupposes the interaction of the fundamental researches and the implementation of technological innovations[9]. Therefore together with scientific problems, the Government should also solve the problems of application of scientific results in the production.

 

References:

  1. Constructing Knowledge Societies: New Challenges for Tertiary Education.The  World Bank, Washington,  D.C.,   2002.
  2. Acoff R. , Planning of the Future Corporation/ translated from English, M. “Progress”, 1985
  3. The Global Information Technology Report 2008-2009. World Economic Forum, 2009
  4. Managing National Systems of Innovation. OECD, 1999
  5. Feinson S. National Innovation Systems Overview and Country Cases. CSPO, 2003.
  6. Caloghirou Y., N. Constantelou and N.S. Vonortas (2001): Innovation-related knowledge flows in European industry: Extent, mechanisms, implications-Final Report. Final Report to the Commission, DG XII, TSER Programme, Contract No: CT 98-1118, National Technical University of Athens, Laboratory of Industrial & Energy Economics.
  7. To the knowledge societies, UNESCO, 2005

 


[1]Constructing Knowledge Societies: New Challenges for Tertiary Education.The  World Bank, Washington,  D.C., 

   2002, p. 24.

[2]That started from the preparation of the so-called “Charpie Report” in 1964 recommended by the US President Johnson and it was called “Technological innovation and its environment”  

[3]Acoff R. , Planning of the Future Corporation/ translated from English, M. “Progress”, 1985, page 63

[4]The Global Information Technology Report 2008-2009. World Economic Forum, 2009. P. 322,340.

[5]The Global Information Technology Report 2008-2009. World Economic Forum, 2009. P. 322,340

[6]Managing National Systems of Innovation. OECD, 1999

[7]Feinson S. National Innovation Systems Overview and Country Cases. CSPO, 2003.

[8]Caloghirou Y., N. Constantelou and N.S. Vonortas (2001): Innovation-related knowledge flows in European industry: Extent, mechanisms, implications-Final Report. Final Report to the Commission, DG XII, TSER Programme, Contract No: CT 98-1118, National Technical University of Athens, Laboratory of Industrial & Energy Economics.

[9]To the knowledge societies, UNESCO, 2005, pg. 108

Комментарии: 11

Выходец Александр Михайлович

Интересная и важэная работа, так как посвящена "современной" болевой точке - привлечению и использованию инвестиций. Серьезным шагом является создание национальной инвестиционной модели экономической системы. что в дальнейшем даст возможность регулировать инвестиции и добиватся их оптимального использования.

Выходец Александр Михайлович

Интересная и важэная работа, так как посвящена "современной" болевой точке - привлечению и использованию инвестиций. Серьезным шагом является создание национальной инвестиционной модели экономической системы. что в дальнейшем даст возможность регулировать инвестиции и добиватся их оптимального использования.

Zarytska Nataliia Petrivna

Rather good research. I share with your opinion, that fundamental investigations should be the object of attention of state and business structures. For example, there are some business-incubators, which are organized by enterprises, in Ukraine.

Романович Людмила Геннадьевна

Тема работы актуальна и представляет интерес. Статья заслуживает положительной оценки.

Жарова Алёна Викторовна

Познавательная статья по актуальной проблематике. Исследование носит глубоко проработанный характер. С пожеланием творческих успехов, Жарова Алёна.

Andrey Marenkov

Интересный доклад по актуальной теме.Очень хорошая статья. Спасибо

Котлярова Катерина Игоревна

Спасибо автору за интересную и качественную статью.

Gegamyan Mariam Araikovna

Достаточно интересная статья. Много новой инвормации открыла для себя. Спасибо Вам за статью.

Хачпанов Гия Вячеславович

Выведены тезисы, проведена аналитика. Тема хорошо освящена. Творческих Вам успехов.

Stepanova Vera Vladimirovna

The article rises present direction of socio-economical development of modern society and developed countries. Innovation-related knowledge became the strategic recourse of further development of territories. Innovations and researches will become the main drivers of all post-soviet economics. V.Stepanova

Tatyana Veselova

Очень орошая статья. Рассмотрена атуальнейшая тема. Интересны определения. Спасибо.
Комментарии: 11

Выходец Александр Михайлович

Интересная и важэная работа, так как посвящена "современной" болевой точке - привлечению и использованию инвестиций. Серьезным шагом является создание национальной инвестиционной модели экономической системы. что в дальнейшем даст возможность регулировать инвестиции и добиватся их оптимального использования.

Выходец Александр Михайлович

Интересная и важэная работа, так как посвящена "современной" болевой точке - привлечению и использованию инвестиций. Серьезным шагом является создание национальной инвестиционной модели экономической системы. что в дальнейшем даст возможность регулировать инвестиции и добиватся их оптимального использования.

Zarytska Nataliia Petrivna

Rather good research. I share with your opinion, that fundamental investigations should be the object of attention of state and business structures. For example, there are some business-incubators, which are organized by enterprises, in Ukraine.

Романович Людмила Геннадьевна

Тема работы актуальна и представляет интерес. Статья заслуживает положительной оценки.

Жарова Алёна Викторовна

Познавательная статья по актуальной проблематике. Исследование носит глубоко проработанный характер. С пожеланием творческих успехов, Жарова Алёна.

Andrey Marenkov

Интересный доклад по актуальной теме.Очень хорошая статья. Спасибо

Котлярова Катерина Игоревна

Спасибо автору за интересную и качественную статью.

Gegamyan Mariam Araikovna

Достаточно интересная статья. Много новой инвормации открыла для себя. Спасибо Вам за статью.

Хачпанов Гия Вячеславович

Выведены тезисы, проведена аналитика. Тема хорошо освящена. Творческих Вам успехов.

Stepanova Vera Vladimirovna

The article rises present direction of socio-economical development of modern society and developed countries. Innovation-related knowledge became the strategic recourse of further development of territories. Innovations and researches will become the main drivers of all post-soviet economics. V.Stepanova

Tatyana Veselova

Очень орошая статья. Рассмотрена атуальнейшая тема. Интересны определения. Спасибо.
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