Where and how innovations are created

Research and development (R&D) has been an important, if not the central, driver of social change over the past decades. The innovation activity triggered by this has led to very successful economic development in many places - Austria is also one of the countries that have strongly profited from this. Today, we are increasingly confronted with technological developments whose speed and impact pose major challenges to our society. The Corona pandemic has shown that science and research are extremely challenged to provide new solutions for coping with unexpected crisis situations more quickly than in the past.

"Innovation today happens in networks of researching and innovating organizations," explains Matthias Weber, Head of the Center for Innovation Systems & Policy at the AIT Austrian Institute of Technology. Without these collaborations, it is no longer possible to use the detailed knowledge available in many places for technological developments and innovations.

In recent years, such innovation systems have become more complex, as the networks supporting them have grown not only in size but also in diversity - for example, in terms of the thematic, institutional and geographic background of the participating organizations. Moreover, more and more "players" are entering the innovation system, for example through NGOs or citizen participation. "The spectrum of partners is becoming broader and goes far beyond the established RTI players from science, business and politics," says Weber.

Traditional models and indicators of empirical innovation research (such as input-output analyses or the specification of R&D expenditures as a percentage of GDP) can no longer adequately depict the different facets and impact mechanisms of innovation systems. In order to be able to grasp and control these increasingly complex systems, new methods are needed for their analysis and for policy design.

New data and indicators that capture R&D activities at a micro level of individual organizations and their collaborations have therefore moved to the center of the scientific debate. These so-called "micro data" allow a much more differentiated picture of the development of innovation patterns, i.e. earlier statistical indicators. Such detailed data are at the core of the European research infrastructure RISIS (Research Infrastructure for Science and Innovation Policy Studies), which has been under construction for several years under the leadership of AIT researchers.

"In RISIS, various output data, e.g. publications, patents or R&D collaborations of universities, research organizations or companies, are collected in a standardized and quality-assured manner," explains AIT innovation expert Thomas Scherngell. Geocoding allows flexible spatial analysis. Semantic methods can also be used to examine different thematic focuses, such as activities in the field of new key technologies or with regard to major social challenges.

Microdata can be used to develop new indicators that capture the complexity of an organization's and/or region's knowledge base. This can also be used to construct models that attempt to explain the impact of innovation on socioeconomic development.

Recently, a new index for measuring the so-called "knowledge complexity" of regions has come to the fore, explains Scherngell: According to this index, a region with high knowledge complexity produces findings and knowledge (which are reflected in patents, for example) in many different technological fields (diversity) - but at the same time also in fields that are only developed by a few other regions. Initial analyses have shown that the fields of digital communications, computer technology and telecommunications have the highest knowledge complexity. What is particularly interesting is that the regions in which these technologies are developed and produced are typically different from the traditional European core regions. Specifically, the regions with the highest knowledge complexity include, for example, Brittany, Madrid or Southern Ireland - and not, as in conventional rankings, Upper Bavaria or the greater Paris region, for example.

Longer-term changes in global innovation systems can also be studied in this way. Under Scherngell's leadership, a team of researchers from AIT and the Vienna University of Economics and Business recently analyzed the changing role of China. For a long time, China was seen primarily as an imitator of existing technologies, but it has now carved out a strong position for itself with a high level of knowledge production and intensive international networking, especially in ICT. In figures: As recently as the early 2000s, China was far behind in research and in many technology areas; in 2018, with research spending of $554 billion, China was only slightly behind the United States ($582 billion). In terms of patents in the field of information and communications technology (ICT), China overtook the USA as early as 2015 - a consequence of state-directed and lavishly funded investments in this field, especially in the area of basic university research.

The network analysis of around 70,000 patents in the ICT sector from 2001 to 2015, which were jointly developed by inventors from different countries (so-called "co-patents"), provided revealing details. The results refute all assumptions that China's research is isolated from the rest of the world and that its quality is therefore below average. Indeed, it showed that Chinese researchers are increasingly playing a central role as cooperation partners in international research projects: In telecommunications, China's so-called network centrality (i.e., the number of co-patents with other countries) improved from 32nd in 2001 to 5th in 2015; in hardware, from 82nd to 6th; and in semiconductors, from 93rd to 10th. Only in consumer electronics did the opposite trend occur - but China is also in the global top 10 in this area.

Although the USA still plays a central role in ICT research and development, its position is becoming weaker in relative terms. In addition to some European countries, countries such as India, Israel and, above all, China are moving more and more into the center of global research and innovation networks based on the division of labor. In the eyes of the study authors, this also means that China's catch-up process is not yet over.

This text is based on a contribution by Matthias Weber and Thomas Scherngell in the Yearbook to the Alpbach Technology Talks 2020 "Discussing Technology" on the topic of "Complexity", supplemented by a recent publication in "PlosOne" (DOI: 10.1371/journal.pone.0237864).

[1] The Yearbook is published as part of the Alpbach Technology Talks, which are jointly organized by the AIT Austrian Institute of Technology and ORF Radio Österreich 1.