How do Rising Powers Shape Global Innovation?

On 6-7 October 2016, the Manchester Institute of Innovation Research and the ESRC Rising Powers and Interdependent Futures programme hosted a thematic workshop to discuss the roles of rising powers in shaping global innovation. Our policy brief summarises the findings and practical implications that come out of different projects under the ESRC programme working on the theme of innovation.

How do Rising Powers Shape
 Global Innovation?

Overall, the research findings discussed at the workshop underline that the Rising Powers, such as China, India, and Russia, represent one of the key drivers of global economic and social change today. Notwithstanding recent short-run fluctuations in economic growth, these Rising Powers are becoming increasingly important players in global innovation. Non-Western models of innovation challenge Western approaches to research and development in some areas, but also offer opportunities for research cooperation and technology transfer.

The emergence of Rising Powers as global players in key technologies, but also the need to look more closely at the differences between them, can be seen from the findings of our project on Innovation Systems Development in China and Russia. Both China and Russia have undergone periods of market reform and developed new strategic goals for their innovation policies that show some parallels, for instance in the field of nanotechnology. Despite these similarities China appears to be more clearly on a path to becoming a world-leading country on innovation than Russia. For the UK, innovation developments in China, as well as in other Rising Powers countries, can present new collaboration opportunities although they also heighten competition for leadership and global market success in emerging and advanced technologies. 

This is also apparent from the research presented by our project at King’s College London on state strategiesof governance in global biomedical innovation in China and India. The emergence of bioinformatics, meaning tools that make biology legible with the help of computer science, is changing the way science works. This opens new opportunities for Rising Power countries to establish themselves in this new territory. Western models of innovation have dominated global research on bioinformatics, but increasing engagement of Rising Powers such as China and India in the area of bioinformatics could challenge established norms and practices of research in Western countries. Effective regulation of biomedical research in the UK needs to take into account stem cell therapy in countries such as China and India, different emerging national and international governance approaches for innovation, as well as data and incentives issues. 

Finally, looking beyond the Rising Powers’ impact on developed country innovation systems, their investment in innovation offers opportunities for South-South technology transfer and addressing key global development challenges such as climate change. Our project based at SOAS explores these dynamics in its comparativestudy of Chinese hydropower dams in Africa and Asia. Findings show that Chinese investment into low carbon energy in developing countries offers opportunities for technology transfer and mitigation of climate change. In addition, its development impact could be further enhanced by strengthening social safeguards and environmental impact assessments. Watch the video on the project's findings here:

As a collection, our projects show that the Rising Powers’ engagement in innovation has a profound impact beyond their borders, both in the UK and globally. Within the UK, policies on research and innovation need to take innovation dynamics in countries such as China, Russia, and India into account to be effective. Globally, innovation and technology transfer from the Rising Powers has the potential to address key policy challenges such as climate change, provided that social and economic side effects of South-South investment projects are dealt with effectively.

For more details, please refer to the full thematic policy brief on 'How do Rising Powers shape Global Innovation?' produced by the ESRC Rising Powers and Interdependent Futures programme. 

For a more general overview of the findings of all 12 research projects under the Rising Powers and Interdependent Futures programme, please have a look at our briefing on 'How do Rising Powers Drive Global Change?'.

Reversing the international flow of innovation: Interview with Simone Corsi

Simone Corsi, Research Fellow, Dept. of Entrepreneurship, Strategy & Innovation,
Lancaster University Management School and Programme Manager, Lancaster China Catalyst programme, was interviewed after presenting at a seminar hosted by the Manchester Institute of Innovation Research (MIOIR) on 29 February 2016. Listen to his conversation with Dr. Yanchao Li here.




Stepping aside from the International Product Life Cycle Theory (Vernon, 1966) that considered advanced economies as the only loci of innovation, scholars are now looking at the growing role of emerging economies as potential sources of global innovation. Simone Corsi draws on the concept of reverse innovation (Immelt et al, 2009; Govindarajan & Ramamurti, 2011) in its common market-based definition and expands it by adding an R&D perspective, highlighting the importance of where the innovation was ideated (R) and developed (D) as determinants for a reverse innovation. A new typology of reverse innovation is then described, identifying multiple patterns of innovation where emerging economies play an important role and framing the new concept within a global innovation setting.

Recognizing China as one of the most prominent emerging economies, the seminar at MIOIR looked at how the Chinese market can influence the innovative activities of foreign MNCs and become a source for global innovation. Four case studies of foreign MNCs and R&D activities in China were presented and analyzed. These confirm an evolutionary path of foreign R&D activities in China from an exploitative to an explorative nature, although we move away from a framework where host countries affect MNCs’ subsidiaries innovation activity based on their technological richness and diversity (Almeida & Phene, 2004; Frost, 2001) stepping into a context where Chinese subsidiaries can be considered as interpreters of local market characteristics, whose inputs configure unique innovation sources. The results show how the Chinese competitive context can trigger global innovation if stimuli are properly received at both local and corporate levels.

Synthetic biology in China: An update from the field

By Yanchao Li and Philip Shapira

Over a two-week period in May 2015, we undertook a series of interviews in China with scientists and entrepreneurs working in the fast growing domain of synthetic biology.

Synthetic biology involves redesigning biological components and systems present in the natural world or making new ones from scratch. Champions expect synthetic biology to drive a new industrial revolution, shifting economies to greener, bio-materials and offering opportunities to develop innovative products and applications in medicine, agri-food, energy, information technology, and other fields. The UK published a pioneering Synthetic Biology Roadmap in 2012 and has funded a series of new synthetic biology research and commercialisation initiatives. In the US, the European Union, other developed countries, and now China, researchers and companies are now similarly exploring the opportunities presented by synthetic biology. China’s efforts are underpinned by its policy drive to shift from routine manufacturing to more innovative high-technology sectors and the considerable expansion in recent years in Chinese resources and capabilities for science, engineering, and innovation.

During our field research in China, we visited several key institutions undertaking synthetic biology research and commercialization in China, interviewing a range of researchers, entrepreneurs and high-level managers. China has long used a centrally managed five-year planning approach to signal science and technology priorities, fund research and training in the Chinese Academy of Sciences and universities, guide regional agencies, and support technology commercialization. These plans did not foresee the rapid recent growth of attention in other countries to synthetic biology. However, prompted in part by the fast scale-up of the UK programme, Chinese governmental sources have expanded support for synthetic biology research, including at local levels. Academicians and science and technology policy officials have prepared a Chinese roadmap that identifies strategic targets in synthetic biology over five, ten and twenty year periods. Nearer-term goals include building databases of standardized biological parts and developing computational competency for part and device design. China’s roadmap also outlines timelines for commercial and clinical applications of parts, devices, and systems developed using synthetic biology and engineering. Indeed, we observed an actively developing community of synthetic biology researchers, entrepreneurs and established companies.

We met with several key people involved in synthetic biology research in China, including at Tsinghua University in Beijing and at the Shanghai Institute for Biological Sciences, Chinese Academy of Sciences. Research groups in these institutions target both scientific outputs and commercialization, with close links to scientific entrepreneurs and established companies. In an incubator at Tsinghua University, we visited a start-up company that is drawing on university research to engineer polyhydroxyalkanoates (polyesters fashioned by bacterial fermentation). The company’s patented organism can be used to make biodegradable plastics using seawater (rather than more expensive freshwater). We also visited a US-owned biological research company based in eastern China that employs a labour force of Chinese scientists and technicians to provide gene synthesis, cell line development, and biological testing services and products to a worldwide customer base. The company is exploring synthetic genome design and other ways in which synthetic biology can be used to develop enhanced and new services and products.

However, systematic approaches in China to address the ethical, legal, equity, and societal implications of synthetic biology are not evident. As yet, no explicit measures to foster responsible research and innovation are embedded in Chinese initiatives to develop synthetic biology, and China has not emulated the open processes of broad consultation and public engagement seen in the UK Synthetic Biology Roadmap. This is not to say there is no discussion about broader implications in China. Just before our visit, a group of Chinese scientists from Sun Yat-sen University generated worldwide controversy through their efforts to genetically modify human embryos. We were told that this work also ignited debate among scientists and policymakers in China, although without consensus as to its appropriateness and what should be done to more effectively govern biological research by Chinese researchers to address ethical and safety concerns. Debate on such topics in China has tended to be restricted to small-scale groups of academics and policymakers. Still, there are signs that issues are being discussed. A recent Xiangshan-Science academic workshop considered ethical issues and governance of converging technologies, while one of the first academic meetings in China on responsible research and innovation is being held this summer. There are also early indications of the use of China’s extensive social media platforms to highlight specific projects in synthetic biology. It remains to be seen whether and how such developments will influence the governance and trajectories of research and innovation of synthetic biology in China.

Philip Shapira is Professor of Innovation, Management and Policy at the Manchester Institute of Innovation Research, Manchester Business School (MBS), The University of Manchester, UK, and is Principal Investigator for the Project on Emerging Technologies, Trajectories and Implications of Next Generation Innovation Systems Development in China and Russia (ES/J012785/1). He is also a Co-Investigator with the Manchester Synthetic Biology Research Centre (SYNBIOCHEM) (BB/M017702/1) and lead for SYNBIOCHEM’s Responsible Research and Innovation (RRI) Group. Dr. Yanchao Li is a Research Associate with the Manchester Institute of Innovation Research and a researcher with the Project on Emerging Technologies, Trajectories and Implications of Next Generation Innovation Systems Development in China and Russia and the SYNBIOCHEM RRI Group. Dr. Jan Youtie (Georgia Institute of Technology) and Xiao Liang (MBS Doctoral Student) were also involved in interviews. For further information, contact: pshapira@mbs.ac.uk

The emergence of an industry cluster: Brazil’s ‘Oil Island’

By Alec Waterworth

Ilha do Fundao is an island complex constructed in the Guanabara Bay north of downtown Rio de Janeiro in Brazil. The island’s transformation reflects broader trends of technological and industrial development and also some of the challenges seen in Brazil in recent years. For fifty years, Ilha do Fundao was home to CENPES (the primary research and development centre of Petrobras, Brazil’s massive semi-public oil and gas company), and to the Federal University of Rio de Janeiro’s (UFRJ) Institute for Graduate Studies and Research in Engineering (COPPE). Yet, large areas of this mostly artificial island had laid empty. Today, that has changed. Ilha do Fundao is now also occupied by technology centres from nine leading companies in the global oil and gas industry and is emerging as a cluster of innovation in the oil and gas sectors. I have visited the island several times over the last two years in order to interview the actors in this emerging industry cluster. As a technology manager at CENPES told me during my most recent visit, “a new world has been created”.

General Electric’s US$100m research centre on Ilha do Fundao, opened in late 2013

Ilha do Fundao’s makeover has centred around the university-owned technology park in the south of the island. Next door to this is the university’s business incubator, which has expanded from one multi-firm building to three. A thirty-minute walk from the technology park takes you to CENPES and in between this lies COPPE. COPPE and CENPES have a long history in collaborating together: Over the last fifty years, COPPE has been instrumental in establishing Petrobras as a technology leader in the exploration and production of oil and gas, and most recently, as a specialist in deep and ultra-deep water technologies. “There has always been an exchange of knowledge. […] Petrobras has never worked completely alone,” said one of my interviewees at Petrobras. “Petrobras not only used their knowledge, it shared knowledge … so the university [could] help us.”

Technological and innovation capabilities on the island are now further enhanced with the arrival of new residents on the island, including Schlumberger, Baker Hughes, Halliburton, FMC Technologies, Siemens, BG Group, General Electric and Vallourec. These firms have invested heavily in the area, establishing large and expensive R&D centres. For example, FMC’s 20,000 square metre facility cost around US$25million to build. Why there? FMC hopes to tap into the university campus, to create a collaborative environment and enable access.

Yet, despite these new R&D investments, operational challenges remain. As yet, cooperation between the new companies on the island is still weak. Several companies identified this as a source of concern. Perhaps with strong relationship already built by Petrobras, it is hard for newcomers to forge links with local academics. But there may be other reasons. These issues will be examined in an academic paper in preparation this year which addresses the motivations of foreign multinational enterprises in Brazil in locating in industry clusters, how they participate in those clusters, the extent to which the collaborative efforts of such firms are inhibited by barriers to entry, and the implications for industrial innovation in Brazil. 

Alec Waterworth is a doctoral student with the Manchester Institute of Innovation Research, Manchester Business School, The University of Manchester, UK, and a researcher with the Project on Emerging Technologies, Trajectories and Implications of Next Generation Innovation Systems Development in China and Russia (ES/J012785/1). Alec is completing his doctoral research on path dependence, path renewal, and the evolution of innovation in Brazil’s petroleum sector. For further information, contact: alec.waterworth@postgrad.mbs.ac.uk

Nanotechnology Research and Innovation in Russia: A Bibliometric Analysis

By Philip Shapira

Image by Victor Habbick
FreeDigitalPhotos.net

Researchers with the Rising Powers and Interdependent Futures project on Emerging Technologies, Trajectories and Implications of Next Generation Innovation Systems Development have published a new working paper on Nanotechnology Research and Innovation in Russia. This working paper presents findings from analyses of Russian nanotechnology outputs in publications and patents focusing on developments over the period 1990 through to 2012. The investigation draws on bibliometric datasets of scientific journal publications and patents and on available secondary English-language and Russian sources.

The working paper is authored by Maria Karaulova, Oliver Shackleton, Abdullah Gök, Maxim Kotsemir, and Philip Shapira. Kotsemir is a researcher with the National Research University Higher School of Economics, Moscow – the project’s principal international partner in Russia. The other authors are researchers with the Manchester Institute of Innovation Research at the Manchester Business School, University of Manchester. The research was supported by the Economic and Social Research Council [grant number ES/J012785/1] as part of the project Emerging Technologies, Trajectories and Implications of Next Generation Innovation Systems Development in China and Russia.

For further details, please refer to:

Karaulova, M., Shackleton, O., Gök, A., Kotsemir, M. and Shapira, P. (2014) 'Nanotechnology Research and Innovation in Russia: A Bibliometric Analysis', Project on Emerging Technologies, Trajectories and Implications of Next Generation Innovation Systems Development in China and Russia, Working Paper, October 2014.