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Chapter written by Sophie BOUTILLIER.
6
Capacity – Innovation Capacities and Learning Dynamics
6.1. Introduction
The term “innovation” has given way to “capacity” in work relating to innovation systems over the last twenty years and, more particularly, in the context of developing countries, where the diffusion and absorption of foreign knowledge is positioned upstream of its constitution (Casadella and Uzunidis 2018).
Originally, innovation capacities proved to be relevant in the literature on technology transfer. Transfer is defined by UN regulations (1971) as the transfer of knowledge for the manufacture of a product or the provision of a service. It is a transfer of knowledge between firms belonging to different countries, an exchange of equipment or techniques from one country to another. Technology transfer can take place from one company to another, from one foreign country to another, from a research laboratory to a newly created or existing company. Part of the innovation process comes from this technology transfer. Technology transfer refers to the diffusion and the opportunity for actors and territories to reappropriate foreign technology (Casadella et al. 2015). Obviously, technology transfer alone is not enough to create dynamic innovation. It is the entire meso-, micro- and macroeconomic environment that must be considered, hence the importance of systemic interactions between productive and academic spheres and, above all, of the so-called “capacity” for innovation.
We first present the link between innovation capacities and learning dynamics, before looking at the diversity of these capacities and deducing the value of building skills within innovation systems.
6.2. Learning and innovation capacities
Neoclassical economists have been interested in allocation problems within a general equilibrium context. Individual agents, by virtue of their preferences and information (notably technical knowledge), must make rational choices among the various alternatives proposed. From this perspective, conclusions on the organization of the economic system are known: allocating resources to achieve objectives. As these resources are always limited, choices have to be made. This being the case, this vision cannot correspond to an understanding of current economic development phenomena. Indeed, if firms or states intensify their efforts to allocate existing resources (capital, labor), and if each separate unit produces the same product with the same technique, they become much less competitive because of the repercussions on demand (consumers). Innovation therefore goes beyond the principle of allocating resources, in a context where the speed of technical change is constantly accelerating. It is less a question of knowing how to distribute resources related to labor and capital factors, than of creating and using diverse knowledge through learning processes. In addition, the information and specific knowledge that agents have is less important than their ability to make, have made or to use knowledge. The latter includes the ability to do new things, to cope with new situations and to gain access to new information. In short, companies must constantly look for new knowledge to use in production, such as new products or processes. To do this, they must be part of a Learning Economy (Lundvall and Borras 1999), which means that the current change does not lie in the intensive use of knowledge, but rather in the acceleration of the speed of change, which leads to a very rapid depreciation and obsolescence of skills and knowledge. Consequently, the essential factor in the competitiveness of firms lies more in the capacity to acquire new skills rather than in the possession of a certain stock of knowledge or access to information.
6.3. The diversity of innovation capacities
We turn now to the term ‘innovation capacity’. The capacity of companies in the current context becomes crucial for their performance. It defines a constant need to develop the qualifications of individuals and the organizational or technological skills of companies. The constitution of knowledge includes practical skills through learning by imitation, as well as intellectual capacities acquired in educational and training institutions. It also includes knowledge management through organizational learning, as well as R&D. In other words, innovation capacities include the realization of learning processes through practice (learning by doing), through use (learning by using) or through interacting (learning by interacting), as well as individual learning processes (education and training), controlled directly by individuals. These are inherent prerequisites for innovation processes, even though they do not directly concern them. Direct learning processes are mainly aimed at universities, research centers and R&D laboratories and concern formal organizations, while indirect learning processes are more concerned with internal company learning processes. The similarity between the two processes lies in their social and interactive nature. Finally, learning processes combine four types of knowledge (Lundvall and Johnson 1994): know-what or informational knowledge, know-why or the understanding of social and natural phenomena (scientific knowledge), know-who or the social ability to cooperate and communicate, and finally, know-how or the ability to do something on a practical level (experience). All of these processes, far from being exhaustive, are not only related to the amount of energy spent by actors to solve problems, but also to the expertise that actors have in mastering new knowledge. They consist of efforts to use local knowledge through the capacity to (be able to) internalize foreign knowledge. We speak of domestication of knowledge, rehabilitation and local reappropriation. For this, while knowledge utilization is achieved through capacity building, it also depends on learning opportunities. These capacities, based on constantly evolving demand, develop very rapidly within contexts of learning opportunities: i.e. access to universities, research centers and institutions, and also to national education systems or research projects (Gregersen and Johnson 1997).
The set of capacities shows the great diversity of learning processes that a company can institute, in line with its direct and indirect environment. This diversity is more broadly understood as a “learning culture” (Johnson et al. 2003). The latter refers to the daily promotion of learning in all segments of the economy (R&D, production, human resources, institutions, politics): from individual learning to organizational learning, tacit and explicit, formal and informal, in low and medium technology, from the exact sciences to the humanities. It requires the adaptation of knowledge to local conditions and the improvement of these conditions in the economy as a whole. It is through lack of a “learning culture” that innovation capacities are limited and the institutional framework is not well equipped to promote the necessary learning. In other words, valuing learning in all its forms is key to understanding how firms learn.
6.4. Capacities, innovation system and competency building
While innovative capacity has proved the most common expression in the jargon of current authors in the field of innovation economics, the term “skills construction” has appeared in parallel in the economic literature to take advantage of the diversity of forms of learning, and also their uses for productive purposes. Thus the expression “System of Innovation and Competence Construction” (S.I.C.C.) was first presented by the Globelics group in 2002 at an international conference on innovation systems at the University of Aalborg. Lundvall (2013) recently recalled its importance in developing economies by highlighting