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
Friday, 3 July 2015
Wednesday, 1 July 2015
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”.
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| 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.
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
Sunday, 28 June 2015
What influences the returns to innovation policies in Rising Power economies?
By Yanchao Li, Maria Karaulova, Oliver Shackleton and Philip Shapira
In the arenas of science, technology and innovation, two of the world’s largest emerging economies – China and Russia – have placed great emphasis on seizing early opportunities to develop and exploit strategic emerging technologies. These technology and innovation policies are being implemented in the context of, and are indeed part of, the transformations of economic structures and other innovation system aspects in these two countries, including changes in institutional frameworks, governance approaches and actor roles. In our ESRC project on Emerging Technologies, Trajectories and Implications of Next Generation Innovation Systems Development in China and Russia we are building a conceptual framework to investigate the factors that influence the returns to technology and innovation policies in each of these countries.
There are multiple points of comparison between China and Russia, including a shared legacy of centrally planned regimes and more recently economic reforms and market orientations. Three decades ago, there were many similarities between the two countries in science and innovation. National economic shares of investment in science and outputs of scientific papers were comparable. In both countries, the Academies of Sciences dominated the institutional research landscape, while universities focused mostly on teaching. Large state companies occupied most of the major economic sectors, driven by goals of production. Particularly since the 1990s, both China and Russia have sought economic transformation with greater use of market incentives, and each has developed policies to modernize and reform science and innovation. Today, there are similarities in the strategic goals of their respective innovation policies – and both countries engage in active innovation policy learning from US and European models.
Nevertheless, it is evident that present day China and Russia now diverge significantly from each other in science and innovation system performance. China has undergone a striking transformation in R&D capabilities, greatly expanding the share of its economy spent on research, rising to one of the world’s leading source of scientific publications, developing a number of globally-recognized research universities, and seeing the emergence of innovation as a source of growth among larger companies and new entrepreneurial start-ups alike. In contrast, Russia has struggled to maintain its research infrastructure, particularly since the decline of the oil-fuelled economic growth of the early 2000s and the economic consequences associated with recent geo-political tensions. Overall, by almost all innovation indicators, Russia now lags. Yet, these differences between the two countries cannot be explained only by macro-level events. We also identify the importance of institutional and micro-level factors within innovation systems themselves. Our research frames the problem of micro-macro systemic interactions in an iterative way through which actor expectations and subsequent strategies shape innovation policy implementation processes in an institutional context – which, in turn, influences the next round of an expectations cycle and bears on whether trajectories follow path dependency or open up path plasticity (see Figure).
Our research draws on interviews with a wide range of innovation actors in China and Russia including established firms, new start-up enterprises, central and regional government officials, scientists, think tanks, and managers of science parks and incubators. We have used focus groups and workshop and conference engagements alongside individual and group interviews. We also draw on secondary data, such as organisational documentation, bibliometric sources, and other available statistical data. We have focused research on emerging technologies, such as nanotechnology and synthetic biology, so as to track developments through the lens of a leading-edge, high priority new technology.
While our research is ongoing, we do have some initial findings. Evident in both countries are factors of path dependency – including deep-rooted legacies of administrative behaviour and hierarchical top-down oversight that carry over from prior phases of central state planning. At the same time, path plasticity – where actors stretch institutional boundaries and more flexibly overcome constraints – is stronger in China. For example, while one Chinese research university we visited does not officially encourage faculty to form companies notwithstanding central government guidance to allow this, faculty are informally associated with start-up-companies, at times through their graduate students. Indeed, actor perception of plasticity (as seen in China) is conducive to entrepreneurship, while actor conformance to path dependencies can stifle such activities (in Russia).
The importance of plasticity is also seen in differences in openness to internationalization and mobility of scientific and entrepreneurial talent. While maintaining strategies of “innovation with Chinese characteristics,” science and technology in China has become much more open to international knowledge exchange. An example is the prominent role of returnees in the innovation process in China, bringing with them transnational experience and active linkages with international innovation and business communities. “Over the years, the government has invested a lot in education and sending students abroad,” commented one interviewee. “These graduates and returnees are gradually showing their contribution to the society.” Russia is more circumspect when it comes to internationalization. While many Russian scientists have moved to other countries, relatively few move back – in part because of differences in the availability of resources but also because it is often hard for returnees to be re-accepted, notwithstanding government policies to encourage return migration. Instead, the Russian approach has been to promote internationalisation through established collaborations with compatriot scientists abroad – this has been a feature of many international cooperation programmes in recent years, although one consequence is that Russia captures fewer domestic innovation spillover benefits from these international linkages.
There are differences in perceptions of the roles of respective government in innovation processes. Maintaining good relationships with government officials at all levels is de rigueur in China. Government linkages often lead to special status designations, tax incentives, and support for research and facilities for high technology enterprises. This can be the case too in Russia, but we also see the increased importance of intermediaries in facilitating communication, trust building, and access to resources. However, as trust in government institutions is low, private companies tend to abstain from government initiatives and policies, even eschewing available tax breaks for science-based enterprises. Quasi-governmental brokers serve as a buffer between the aggressive state and mistrustful companies. “We prefer to work with foundations rather than with the government,” one Russian small enterprise told us. Interestingly, some of these foundations are funded by government itself. Others are privately funded, although the status of some foundations established by private donors has now become uncertain in Russia. A current case involves the Dynasty Foundation – a sponsor of research, education, scientific prizes and exchanges founded by a wealthy Russian business philanthropist – which has fallen into difficulty with the Russian government. Here, a seemingly flexible initiative designed to overcome problems in state science support has encountered the limits of government tolerance in the current Russian system.
Overall, the innovation actors in these countries now have different expectations, as well as differences in access to resources and capabilities. In some cases, similar weaknesses are evident in both countries, for example in encouraging innovation-based collaborations between large and small firms. Yet, while combinations of flexibilities and rigidities are present in the institutional and governance frameworks of both China and Russia, the greater opportunities for path plasticity now available in China have helped significantly to improve its innovation performance outcomes.
Further work is continuing in our project through to September 2016 both to elaborate the conceptual framework and to develop evidence and insights from our field work and other analyses.
All authors are associated with the Manchester Institute of Innovation Research, Manchester Business School, The University of Manchester, UK, and the Project on Emerging Technologies, Trajectories and Implications of Next Generation Innovation Systems Development in China and Russia (ES/J012785/1). Yanchao Li is a Research Fellow, Maria Karaulova and Oliver Shackleton are doctoral students, and Philip Shapira is Professor of Innovation, Management and Policy. For further information, contact: yanchao.li@mbs.ac.uk
In the arenas of science, technology and innovation, two of the world’s largest emerging economies – China and Russia – have placed great emphasis on seizing early opportunities to develop and exploit strategic emerging technologies. These technology and innovation policies are being implemented in the context of, and are indeed part of, the transformations of economic structures and other innovation system aspects in these two countries, including changes in institutional frameworks, governance approaches and actor roles. In our ESRC project on Emerging Technologies, Trajectories and Implications of Next Generation Innovation Systems Development in China and Russia we are building a conceptual framework to investigate the factors that influence the returns to technology and innovation policies in each of these countries.
There are multiple points of comparison between China and Russia, including a shared legacy of centrally planned regimes and more recently economic reforms and market orientations. Three decades ago, there were many similarities between the two countries in science and innovation. National economic shares of investment in science and outputs of scientific papers were comparable. In both countries, the Academies of Sciences dominated the institutional research landscape, while universities focused mostly on teaching. Large state companies occupied most of the major economic sectors, driven by goals of production. Particularly since the 1990s, both China and Russia have sought economic transformation with greater use of market incentives, and each has developed policies to modernize and reform science and innovation. Today, there are similarities in the strategic goals of their respective innovation policies – and both countries engage in active innovation policy learning from US and European models.
Nevertheless, it is evident that present day China and Russia now diverge significantly from each other in science and innovation system performance. China has undergone a striking transformation in R&D capabilities, greatly expanding the share of its economy spent on research, rising to one of the world’s leading source of scientific publications, developing a number of globally-recognized research universities, and seeing the emergence of innovation as a source of growth among larger companies and new entrepreneurial start-ups alike. In contrast, Russia has struggled to maintain its research infrastructure, particularly since the decline of the oil-fuelled economic growth of the early 2000s and the economic consequences associated with recent geo-political tensions. Overall, by almost all innovation indicators, Russia now lags. Yet, these differences between the two countries cannot be explained only by macro-level events. We also identify the importance of institutional and micro-level factors within innovation systems themselves. Our research frames the problem of micro-macro systemic interactions in an iterative way through which actor expectations and subsequent strategies shape innovation policy implementation processes in an institutional context – which, in turn, influences the next round of an expectations cycle and bears on whether trajectories follow path dependency or open up path plasticity (see Figure).
Our research draws on interviews with a wide range of innovation actors in China and Russia including established firms, new start-up enterprises, central and regional government officials, scientists, think tanks, and managers of science parks and incubators. We have used focus groups and workshop and conference engagements alongside individual and group interviews. We also draw on secondary data, such as organisational documentation, bibliometric sources, and other available statistical data. We have focused research on emerging technologies, such as nanotechnology and synthetic biology, so as to track developments through the lens of a leading-edge, high priority new technology.
While our research is ongoing, we do have some initial findings. Evident in both countries are factors of path dependency – including deep-rooted legacies of administrative behaviour and hierarchical top-down oversight that carry over from prior phases of central state planning. At the same time, path plasticity – where actors stretch institutional boundaries and more flexibly overcome constraints – is stronger in China. For example, while one Chinese research university we visited does not officially encourage faculty to form companies notwithstanding central government guidance to allow this, faculty are informally associated with start-up-companies, at times through their graduate students. Indeed, actor perception of plasticity (as seen in China) is conducive to entrepreneurship, while actor conformance to path dependencies can stifle such activities (in Russia).
The importance of plasticity is also seen in differences in openness to internationalization and mobility of scientific and entrepreneurial talent. While maintaining strategies of “innovation with Chinese characteristics,” science and technology in China has become much more open to international knowledge exchange. An example is the prominent role of returnees in the innovation process in China, bringing with them transnational experience and active linkages with international innovation and business communities. “Over the years, the government has invested a lot in education and sending students abroad,” commented one interviewee. “These graduates and returnees are gradually showing their contribution to the society.” Russia is more circumspect when it comes to internationalization. While many Russian scientists have moved to other countries, relatively few move back – in part because of differences in the availability of resources but also because it is often hard for returnees to be re-accepted, notwithstanding government policies to encourage return migration. Instead, the Russian approach has been to promote internationalisation through established collaborations with compatriot scientists abroad – this has been a feature of many international cooperation programmes in recent years, although one consequence is that Russia captures fewer domestic innovation spillover benefits from these international linkages.
There are differences in perceptions of the roles of respective government in innovation processes. Maintaining good relationships with government officials at all levels is de rigueur in China. Government linkages often lead to special status designations, tax incentives, and support for research and facilities for high technology enterprises. This can be the case too in Russia, but we also see the increased importance of intermediaries in facilitating communication, trust building, and access to resources. However, as trust in government institutions is low, private companies tend to abstain from government initiatives and policies, even eschewing available tax breaks for science-based enterprises. Quasi-governmental brokers serve as a buffer between the aggressive state and mistrustful companies. “We prefer to work with foundations rather than with the government,” one Russian small enterprise told us. Interestingly, some of these foundations are funded by government itself. Others are privately funded, although the status of some foundations established by private donors has now become uncertain in Russia. A current case involves the Dynasty Foundation – a sponsor of research, education, scientific prizes and exchanges founded by a wealthy Russian business philanthropist – which has fallen into difficulty with the Russian government. Here, a seemingly flexible initiative designed to overcome problems in state science support has encountered the limits of government tolerance in the current Russian system.
Overall, the innovation actors in these countries now have different expectations, as well as differences in access to resources and capabilities. In some cases, similar weaknesses are evident in both countries, for example in encouraging innovation-based collaborations between large and small firms. Yet, while combinations of flexibilities and rigidities are present in the institutional and governance frameworks of both China and Russia, the greater opportunities for path plasticity now available in China have helped significantly to improve its innovation performance outcomes.
Further work is continuing in our project through to September 2016 both to elaborate the conceptual framework and to develop evidence and insights from our field work and other analyses.
All authors are associated with the Manchester Institute of Innovation Research, Manchester Business School, The University of Manchester, UK, and the Project on Emerging Technologies, Trajectories and Implications of Next Generation Innovation Systems Development in China and Russia (ES/J012785/1). Yanchao Li is a Research Fellow, Maria Karaulova and Oliver Shackleton are doctoral students, and Philip Shapira is Professor of Innovation, Management and Policy. For further information, contact: yanchao.li@mbs.ac.uk
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