RedeSist – Local innovation and productive systems approach: some methodological and analytical issues

Marco Vargas

Research Network of Local Productive and Innovative Systems - www.redesist.ie.ufrj.brFederal University of Rio de Janeiro, Brazil

Brics-workshop – first meeting in the project on learning,innovation and competence building systems in Brasil, Russia,India, China and South Africa

Rebild, February 12-15, 2006

Research Network on Local Productive and Innovative Systems - RedeSist

Up to 70 case studies in different regions of Brazil, Argentina and Uruguay.

Questionnaire surveys: sample of more than 2000 firms covering diverse sectors such as: aerospace, biotechnology, telecom, software, automobile, textiles-apparel, agro-industry, furniture, leather-footwear, ornamental stones, tourism and music.

Development of an empirical and analytical methodology for the study of local systems in diverse sectors.

LIPS approach: Methodological and Analytical Issues

Characterizing and setting the boundaries of LIPS: i) focus on network of economic, political and social agents performing related economic activities within particular territories; ii) focus on the linkages aimed at fostering processes of creation, use and diffusion of knowledge and innovation at local level.

Analytical framework: i) covers micro, meso and macro elements influencing the learning, innovation and competence building processes within local systems; ii) takes also into account the specificities in the institutional framework of local environment, which may either impel or hinder the intensification of learning and innovation processes among local system’s agents

Measuring performance: development of quantitative and qualitative indicators aimed at: i) explaining the dynamic of learning, innovation and cooperation processes at local level; ii) providing elements to analyse evolving trajectories; iii) allowing comparisons with other LIPS case studies a well as national and international innovation surveys

Main research questionsQ1: What are the origins of the researched local systems? What are the major inflection points that characterize their growth trajectory and what are the structural features in terms of delimitation, productive arrangements, coordination form and knowledge systems?

Q2: What are the factors which affect the learning, innovation and competence building processes within the local system, and in what extent such processes are related to local, national and international spheres?

Q3: How do coordination forms affect the competence building strategies adopted by local systems?

Q4: To what extent competitiveness and innovative strategies adopted by productive agents are sustainable (in socio-economic and environmental terms), and are based on specific competences and capabilities of the local system of innovation?

Q5: What are the effects of macroeconomic regime and of implicit and explicit policies on the productive and innovative capabilities of such systems?

Q2: What are the factors which affect the learning, innovation and competence building processes within the local system, and in what extent such processes are related to local, national and international spheres? Objectives Forms of measurement To understand the nature of communication channels and of information and knowledge flows used to develop productive and innovative capabilities and to disseminate encoded and tacit knowledge at the local level. To understand the nature of interaction and cooperation forms among agents of the local system. To estimate the relative relevance of the diverse learning mechanisms, both formal and informal, existing in the local system. To estimate the relative relevance of the external sources of knowledge and information in the process of productive and innovative training of local agents.

Sources of information for learning according to:

degree of relevance, degree of formalization, and location.

Cooperation forms according to: types of

partners, degree of relevance, degree of formalization, partners’ impact and location.

Roll of local enterprise associations, unions, and

other supporting and promoting bodies, according to role carried out and importance ascribed by local actors.

Main sources:

questionnaire survey (sample of firms)

In-depth interviews with key informants (industry associations, research centres, etc.)

Collection of secondary data (SINAL)

Research question: objectives and forms of measurement

Research Reports: main highlightsOverview on national and international context (competitive patterns, technological regimes, etc)Local system profile (’inflection points in growth trajectories, main agents in productive sector, support and coordination organizations, knowledge infra-structure, embeddedness and cooperative practices, performance and competitive strategies, public policies aimed at promotion)Innovation and Production capabilities

Formal and informal learning mechanismsFirms learning strategiesInteractive learning processes within the local system

Local system prospects (challenges and opportunities)

Empirical Research Design

Systematization of secondary data base of SINAL database (information system on local productive arrangements)Collection of primary data at firm level: questionnaire survey comprising different segments of firms within the local productive chain (based on sample design, tabular plan)Interviews with other key informants (industry associations, cooperatives, organizations in charge of teaching and research, financing and promotion, etc.)

Some common features about Local Innovative and Productive Systems in Brazil

Diversity: Remarkable inter-regional differences on innovative and competence building strategies within local productive systems belonging to the same sector

Deep impacts on competitive and innovative dynamic emerging from structural reforms in 1990s (deregulation, privatisation, etc);

Important constrains associated to macro-economic regime and major role of “implicit” industrial and technology policies

Important bottlenecks concerning financing schemes for SMEs;

Low tendency to develop interactive learning processes – either along the productive chain (user-producer) or with support organisations (technological and training infrastructure, industry associations, etc).

One example - clothing and apparel

Informality in Brasil – total and apparel industry (% 2003)

32,7

23,5 22,6

4,26,0

30,9

44,0

17,8

4,52,8

0,0

5,0

10,0

15,0

20,0

25,0

30,0

35,0

40,0

45,0

50,0

Empregado comcarteira

Conta própria Empregado semcarteira

Empregador Não remunerado

Total ConfecçõesFonte: Pnad 2003

EmployerRegistered worker Self-employed Not registerd worker Not paid

Apparel

Overview on selected clothing and apparel LIPS in Brazil: production structure

Selected LPISA in apparel sector

Type of production

Main products Major markets density of local

commercial trade

nature of local trade

Campina Grande - PB diversified general apparel Maily regional High product sales Jaraguá - GO diversified jeans and general

apparel Mainly national medium acquisition of

components and parts

Natal - RN diversified general apparel Mainly local low product sales Tobias Barreto - SE diversified Bed, bath and

table linens and other apparel

Mainly local High acquisition of specialized

services Colatina - ES low diversified Jeans e sweaters Mainly national low acquisition of

specialized services

Apucarana - PR specialized Hats Mainly national High acquisition of raw material

Terra Roxa - PR specialized Embroidered children´s wear

Mainly national medium acquisition of components

and parts Petrópolis - RJ specialized Women's knitwear

wear Maily regional medium acquisition of

specialized services

Cabo Frio - RJ specialized Beach wear Mainly local low product sales Ibitinga - SP specialized Bed, bath and

table linens Mainly national low acquisition of

specialized services

Overview on selected textile and apparel LIPS in Brazil

Common featuresMost firms have reported the introduction of new or improved goods or services that were new to their firm but not necessarily new to their market.Most firms have reported the introduction of new or improved processes that were new to their firm but not necessarily new to their sector.

But several important diferenceshigh diversity between the case studies, both in terms of the range of goods produced and also in terms of the markets target by each arrangementconsiderable variation in innovation and cooperation rates between the different arrangementsmost important sources of information, for learning vary significantly (some clients or customers, some suppliers of equipment, materials or components and trade fairs).

0,00%

10,00%

20,00%

30,00%

40,00%

50,00%

60,00%

70,00%

80,00%

90,00%

%

Cam

pina Grande -

PB

Jaraguá - GO

Natal - R

N

Tobias Barreto - SE

Colatina - ES

Apucarana - PR

Terra Roxa - PR

Petrópolis - RJ

Cabo Frio - R

J

Ibitinga - SP

Brasil - PINTEC

Local Systems

Brazil - Apparel Local Innov Systems Studied by RedeSist - 2003

Innovation Rate

Cooperation Rate

Some challenges

Now we are developing new methodological tools: i) to cope with learning, innovation and capacity building processes in the service sector (e.g. creative industries);

Improve evaluation (and measurement) of social capital in local systems

More comparative analysis between local systems belonging to the same sector: allows identifying specificities in learning, cooperation and innovation associated to localized organizational and institutional designs.