Friday, January 29, 2010

An Architecture of Economies and Innovation Systems

Implicit in my purpose for this blog is to enter into a discussion that attempts to disentangle ideas of  geographic, economic and innovation structure. Although we might joking suggest, to paraphrase Derrida that structuralism is dead, it lives on still and should. Today I start a four part series on a relatively new comer to the lexicon of economic 'structure' words; 'architecture'.

The first use of it that I became aware of was in connection to the asia financial crisis and the perceived need to revisit the global financial system architecture. Since then it has been used by others, notably Michael Jacobides et al. (Industry Architectures) and I have even used it in my book Innovation System frontiers (Chapter 10).

Is architecture just another word for structure in English which is surprising devoid of useful terms, or can the word be used with deeper meaning.

as it is currently used.
Industry architectures
Benefiting from innovation: Value creation, value appropriation and the role of industry architectures
Michael G. Jacobides, Thorbjørn Knudsen, Mie Augier. Research Policy 35 (2006) 1200–1221.

p1201. Our first contribution is to extend the Teecian purview (which focuses on the potential dyadic relationships between innovators and outside asset holders) by considering industry architectures, i.e. templates that emerge in a sector and circumscribe the division of labor among a set of co-specialized firms. We explain why these architectures emerge, usually early on in an industry’s life, as a result of balancing advantages from division of labor with transaction costs relating to the certification of quality of the final good or service. We further explain why these architectures sometimes become stable, thus creating the contours of an industry.We then argue that firms may be able to affect the architecture of their sectors, especially when it is not sharply defined, and as such create an “architectural advantage”.

p1202. Yet most economic organizations, including firms and markets, exhibit a considerably more complex structure of cospecialized agents and assets. We shall refer to such a structure of co-specialized agents and assets as architecture, and suggest that industry architectures are the common frameworks determining the nested structures of industry organization. An industry architecture, we argue, is a sector-wide construct that defines the terms of the division of labor.
Architecture of economies. I will confess that I wanted to use the term in my book and did so in probably a rather shallow way given that my diagrams of industry connectedness are little more than the wiring diagrams of the global economy or at best the floor plans. The diagrams do not provide an idea of the overall form of economies. However, in admitting this I also want to say that I do have in mind a broader image of architecture, even if it was not articulated there.

So what is architecture?

Obviously to start with it is primarily used to define the human built environment. One of the earliest writers on architecture, Vitruvius, a Roman writer and 'engineer' of the 1st century BCE  spoke of firmness, utility, and beauty, latter translated by Wotton as "Commoditie, Firmeness, and Delight'.

... today we might summarise these as form, function and beauty (or perhaps happiness after De Botton).
For an interesting read see:  David Cast (1993) Speaking of Architecture: The Evolution of a Vocabulary in Vasari, Jones, and Sir John Vanbrugh. The Journal of the Society of Architectural Historians, Vol. 52, No. 2 (Jun., 1993), pp.179-188 Stable URL:

Can we imagine describing economic or innovation systems in terms of their form, function and delight, we shall see?

New OECD Reports

Just before Christmas the OECD released a number of important reports.

OECD Science, Technology and Industry Scoreboard 2009

At a time when world economy is in the midst of the most severe economic downturn since the Great Depression, the Scoreboard provides the statistical information necessary to define a response to these global challenges. This edition of the Scoreboard illustrates and analyses a wide set of indicators of science, technology, globalisation and industrial performance in OECD and major non OECD countries (notably Brazil, Russia, India, Indonesia, China and South Africa). Indicators are organized around five issues: responding to the economic crisis, targeting new growth areas, competing in the world economy, connecting to global research, and investing in the knowledge economy.


This book has a bit of a new look and some interesting new analyses. Readers may be drawn to the opening chapter on the economic crisis and the section on emerging research fields.

OECD: Regions Matter: Economic Recovery, Innovation and Sustainable Growth

Why do some regions grow faster than others, and in ways that do not always conform to economic theory? This is a central issue in today’s economic climate, when policy makers are looking for ways to stimulate new and sustainable growth.OECD work suggests that there is no one-size-fits-all answer to regional growth policy. Rather, regions grow in very varied ways and the simple concentration of resources in a place is not sufficient for long-term growth. This report draws on OECD analysis of regional data (including where growth happens, country-by-country), policy reviews and case studies. It argues that it is how investments are made, regional assets used and synergies exploited that can make the difference. Public investment should prioritize longer-term impacts on productivity growth and combine measures in an integrated way. This suggests an important role for regional policies in shaping growth and economic recovery policies, but also challenges policy makers to implement policy reforms.

This is a really important report and I haven't read it closely enough yet to comment, however, some key messages include.
  • Across all OECD countries, regions vary greatly in per capita income levels and growthrates; there are few signs that they are becoming more similar.
  • Urban areas tend to have higher income levels than rural regions, but not necessarily higher growth rates; there is no consistent relationship between urban concentration and economic performance.
 The report contains a range of easily accessible statistics and innovative graphics (3D maps).

OECD: Innovation and Growth: Chasing a Moving Frontier

Innovation is crucial to long-term economic growth, even more so in the aftermath of the financial and economic crisis. In this volume, the OECD and the World Bank jointly take stock of how globalization is posing new challenges for innovation and growth in both developed and developing countries, and how countries are coping with them. The authors discuss options for policy initiatives that can foster technological innovation in the pursuit of faster and sustainable growth. The various chapters highlight how the emergence of an integrated global market affects the impact of national innovation policy. What seemed like effective innovation strategies (e.g. policies designed to strengthen the R&D capacity of domestic firms) are no longer sufficient for effective catch-up. The more open and global nature of innovation makes innovation policies more difficult to design and implement at the national scale alone. These challenges are further complicated by new phenomena, such as global value chains and the fragmentation of production, the growing role of global corporations, and the ICT revolution. Where and why a global corporation chooses to anchor its production affects the playing field for OECD and developing economies alike.

Some interesting material, but this book is a collection of papers from a conference the OECD and World Bank ran.

Thursday, January 21, 2010

NSF Science and Engineering Indicators 2010 released

The US National Science Foundation (NSF) has just released its latest Indicators report.

Webpage for downloads.

Webcast (interesting but less than dynamic)

Friday, January 15, 2010


There are three conferences with the deadlines rapidly apporaching.

DRUID 2010
The deadline for papers is usually around the 28 of Feb.

DRUID and Imperial College London Business School have agreed to co-organize the DRUID Summer Conference in London on June 16-18, 2010.

"This is the very first time a DRUID flagship event is held outside Denmark and we are very excited about the new promising possibilities this opens for our research community" declares DRUID Director, Professor Peter Maskell, Copenhagen Business School.

Dr Ammon Salter, co-Director of the Innovation Studies Centre, Imperial College London states: "DRUID has become one of the world's leading intellectual forums for discussions about technology, innovation and strategy. We are delighted to welcome DRUID to Imperial, bringing this forum into the heart of London."

The 13th Conference of the International Schumpeter Society takes place at Aalborg University in Denmark on 21-24 June 2010.

Schumpeter 2010 serves as an opportunity for both established scholars and young researchers to present research that has a Schumpeterian perspective. The major topic of the conference is "Innovation, Organisation, Sustainability and Crises". But the conference more generally embraces micro-studies of the innovation, routine and selection as well as studies of the macro-problems of Schumpeterian growth and development as a process of "creative destruction". The broad range of issues implies that both economists, business economists, and other social scientists can contribute to the conference and that evidence may be provided by statistical and historical methods as well as other methods.

The EU funded world input output database is also I believe holding a conference in late May which will apparently have some session open for external submissions.
Watch the WIOD website for details.