PLATFORMS FOR SMART ECONOMIC GROWTH

CREATING SMART INNOVATION ENVIRONMENTS

TO HARNESS GLOBAL FLOWS IN A DIGITAL AGE

HEADING GLOBAL CONFERENCE 2016 --- 14-15 NOVEMBER 2016,

KUWAITAdjunct Professor Dr. Ari-Veikko Anttiroiko

University of Tampere, School of Management,

Finland

PLATFORMS FOR SMART ECONOMIC GROWTHKEY TOPICS•GROWTH, FLOWS AND LOCALITIES• TOWARDS INCLUSIVE SMART CITY• PARTICIPATORY INNOVATION

PLATFORMS

Global flows of values

Global networking

Attraction Export

Participatory innovation platform as a smart innovation environment

Engaging people

Growth

Innovation

Smartness

Platforms

People

Context

Urban community as a dissipative structure

SmartCity

FACTORS AFFECTING ECONOMIC GROWTH• Urban land as a historical starting point • Exogenous growth theory and export-base theory (exogenous export demand)• Endogenous growth theory: novel perspective on unique factors of spatial milieu• The role of technology: beyond the increase in the labour and capital in production -> technology• Soft factors of growth: knowledge, social, human and creative capital, institutions, culture, etc.

Urban land

Physical and monetary capital

Technology

Soft forms of capital

Systemic smartness?

Agrarian, industrial and informational mode of development (Castells)

GLOBAL FLOWS OF VALUES

Source: Manyika et al. 2014. Global flows in a digital age. McKinsey Global Institute (MGI).

Business

Public Civic

Frictional human and material flows

Frictionless flows

Local attraction and value-generation processes (city as a dissipative structure)

Production sphere Consumption sphere

Cultural values

Knowledge Innovation

Technology Know-how

Capital FDIs

BUSINESS

CONSUMERS SOFT FACTORS

HARD FACTORS

Global markets

CITY Natural resources Technology Capital Labour

Knowledge Creativity Entrepreneurship Social capital

Shopping Fashion Sports Culture Tourism Education

Innovation milieux Business services Fairs Logistics

P C

Irreducible services

Online services

Goods and materials

Enterpreneurs Business travelers Professionals

Public authorities

Tourists

Hybrid services

Productive actor and institution

flows

Talent

Labor

Raw materials

Intermediate goods

Exports Imports

Client flows

Firms

Students

Immigration

Local leadership / Governance / Policies

Community characteristics

Urban design

Logistics Fairs

• Declined transport and communication costs -> global trade, mobility and communication

• Digital economic transformation: digital goods and services, digital ”wrappers” and digital platforms -> money and data

• Flows of goods, services and finance have grown steadily for decades, reaching 36% of global GDP in 2012.

• Knowledge-intensive flows are growing faster than capital-intensive or labour-intensive flows. They generate more economic value than the global goods trade.

=> RISE OF GLOBAL KNOWLEDGE ECONOMY

LOCALITY AS A DISSIPATIVE STRUCTURE• Dissipative structure (Ilya Prigogine):

exchange of energy and matter between entity and its environment

• Uurban structure is sustained through flows to and from the outside

• Neighbourhood revitalisation• City attraction hypothesis• Export-base theory• Global innovation networking

1

3

2

4

Internal processes External processes

Smart local restructuring

Locality

Community asset development and utilization

Exporting local products and services

Attraction strategy

Global networking and knowledge sharing

Global context: global markets and production and innovation ecologies

Relational processes

Local context: local history, economy and community characteristics

SMART URBAN RESPONSETO THE CHALLENGES OF A DIGITAL AGE• World is ’spiky’ in terms of productive smartness (Florida).• Metropolitan revolution: we need smartness to fix a fragile

economy and to restore our confidence in economic growth.• Traditional ”business engineering” view: smart solutions,

systems and industries as drivers of smart economy.• Hard and soft smartness supports competitiveness:

smartness helps a city to be attractive and competitive and ICTs have a role to play in gaining such competitive advantage.

• Smartness is also about social intelligence and the wisdom of the crowd applied to complex social processes, including innovation processes.

Smart city is about hard and soft smartness

SMART CITY AS A LOCUS OF ECONOMIC DEVELOPMENT

E.g. the case of Barcelona

• Smart city is a framework for promoting the utilisation of technological advancements for urban development

• ICTs as a catalyst of development are embedded in socio-economic context

• Inclusive smart city -> Citizen involvement and inclusion in the making of smart cities

• Playable smart city -> residents are able to hack the city and use open data and new ICTs for their own purposes and applications (Anton Nijholt).

Facilitation of smartness = platformisation

EMERGENCE OF LOCAL PLATFORMSFOR FACILITATING THE SMARTENING UP OF COLLECTIVE CAPABILITIES

1. Platforms for local asset utilisation, e.g. local associations, BIDs, incubators, Living Labs

2. Platforms for attracting external resources, e.g. InnovationXchange, magnet institutions, talent attraction schemes

3. Platforms for export promotion, e.g. export processing zones, accelerators, Go Global programme (Stockholm)

4. Platforms for knowledge sharing and networking, e.g. city networks, PLATFORMA (CEMR), ENoLL

1

3

2

4

Internal processes External processes

Smart local restructuring

Locality

Community asset development and utilization

Exporting local products and services

Attraction strategy

Global networking and knowledge sharing

Global context: global markets and production and innovation ecologies

Relational processes

Local context: local history, economy and community characteristics

Citizens’ have key roles in local asset utilisation and knowledge sharing

PARTICIPATORY INNOVATION PLATFORMSParticipatory = inviting, inclusive, open, appreciative, democratic, fair

• Examples: Quadruple Helix, PPPP, Crowdsourcing, Citizensourcing, Living Labs, open and user innovation and innovation events

• Participatory platforms match business, academia and government with citizens

• Platform offer structured and enabling environment for citizen engagement• Platform functions: access, creativity, sharing and integration

Access

Sharing

Integration

Creativity

Innovation platform

CITIZEN PARTICIPATION• Local people are much more than just

users or customers serving firms’ product development

• Local people can participate in innovation processes in various roles:

• Users and customers• Lead users and enthusiasts• Activists and hactivists• Inhabitants• Community members (”citizens”)

• Culture and societal conditions significantly affect citizen engagement

Local people’s roles in

innovation

processes

CitizenCommunity

member

Inhabitant

CustomerUser

Co-designer

Co-creator

InnovatorCivic

entrepreneur

HackerActivist

Enthusiast

FORMS OF PARTICIPATION• NOMINAL PARTICIPATION

• Display needed for legitimation

• INSTRUMENTAL PARTICIPATION• Users in pre-decided setting

• REPRESENTATIVE PARTICIPATION• Community members are given a voice

• TRANSFORMATIVE PARTICIPATION• Self-organisation and empowerment

Informing

Public hearing

Crowdsourcing

Co-design

BarCamp

Integration with official planning system

Degree of freedom

and creativity

Strong Weak

Low

High Urban hactivism

Self-organized

urban planning

Collaborative

urban planning

Technocratic urban planning

The above-mentioned four-fold typology of citizen participation is developed by Sarah C. White

THE CULTURE OF OPENNESSAS A BACKBONE OF PARTICIPATORY INNOVATION PLATFORM

Elitist innovation culture Open innovation cultureInnovation system System of privileged institutions Open innovation ecosystemApproach to innovation Closed OpenGovernance model Elitist, top-down Inclusive, bottom-upRole of citizens Subordinates, users Empowered citizens

The full utilisation of citizens’ potential requires an open innovation culture, which is built on transparency, non-hierarchical structures, democratic sentiment, social inclusion and the idea of sharing.

Essential in citizen involvement is to utilise citizens’ experience, knowledge, commitment and diversity, rather than their expertise on some particular issue. In short, diversity trumps expertise.

DIGITAL SMARTNESS• ICTs enable new ways of tapping into the collective intelligence• Most of the crowdsourcing excercises today are web-based or

computer-assisted processes• Digital tools can be used to support ’soft smartness’ associated

with complex knowledge processes, such as innovation process• Interfaces between digital and innovation systems

(Komninos): [1] digital disruption in industries, [2] digital platforms (living labs, virtual marketplaces etc.), and [3] co-design and co-creation with lead users, customers, crowds and user communities.

Communicative intelligence

Content intelligence

Collaborative intelligence

Collective intelligence

Aggregating

Interacting Analyzing

Communicating

Aspects of digital

smartness

4Cs of social

intelligence

DIGITAL DISRUPTION• Current developments include interferences between public

governance, activism, social networking and business

• Self-organised and decentralised networking and hacking are becoming a norm in business and social interaction:

• Hackers undermine the conventions of business life• Terminological changes: e.g. growth hacking in marketing• The rise of non-elite stakeholder groups• Dissolving the fixities of roles in Quadruple Helix

• Hacker ethic: access, openness, freedom of information, sharing

• From physical/local to virtual or cyber-physical platforms Anarchism and distrust of authorities

SMART INNOVATION ENVIRONMENTS IN LOCAL COMMUNITIES

Global flows of values

Global networking

Attraction Export

Participatory innovation platform as a smart innovation environment

Engaging people

Growth

Innovation

Smartness

Platforms

People

Context

Urban community as a dissipative structure

SmartCity

• Knowledge-intensive global flows, platformisation and the democratisation of innovation give impetus to the creation of participatory innovation platforms.

• Local value creation processes take place at the intersection of business, policy-making, urban activism and digital living.

• Cities are keen on creating innovation environments of various scales to facilitate global-local interaction.

• People have different roles in local innovation platforms, which reflect the cultural and societal context within which they operate.

Participatory innovation platforms contribute to the utilisation of the innovation potential of urban community and related pursuit of smart, inclusive and sustainable economic growth.