New top destinations for knowledgeintensive FDI The globalization of the world economy has brought about a growing internationalization at the regional level. Regions have increased their ties with foreign regions, both in terms of collaborations for innovation—as shown above by regional co-inventorship patterns—and in terms of new linkages deriving from the new forms of innovation organization; in fact, companies have started to delocalize research and design activities that had previously
been kept in-house.10 This unbundling of the production and innovation processes and the new knowledge-intensive FDI are contributing to the generation of new alliances among regions and cities located in different countries, especially in emerging economies. These new forms of FDI are targeting not only main regions and capital cities; more and more they are targeting new places characterized by growing domestic demand and/or by territorial clusters of scientific and knowledge capabilities. These new forms of FDI have primarily benef ited those places that have implemented specific policies targeted to attract these types of investments, including cities in different countries, including Brazil, China, Costa Rica, India and the United Arab Emirates. The f Di Market database collects information on greenf ield investment projects. These data can be broken down to the city level.11 According to this database, the top five cities for outsourcing innovative FDI activities in 2010–12, as measured by number of jobs created by greenfield investment projects, are Shenzhen (China); Espoo (Finland); and Fairfield, Palo Alto, and Seattle (USA). Seoul (Republic of Korea) ranks 6th, and has the peculiarity of outsourcing more R&D than design activities. Traditional European manufacturing sites, such as Boulogne Billancourt and Paris, also rank among the top 20 cities for outsourcing innovative activities (Figure 4a). Since the 2008 economic and financial crisis, innovative FDI has suffered of a sharp decrease. For example, the number of jobs created by greenf ield FDI projects in design, testing, and R&D in the top recipient city decreased from 20,000 in 2005–07 to 13,000 in 2010–12, and from 1,500 to 500 in the 20th city in the rankings.12 The cities that
receive the most FDI inf lows related to R&D and design are located in emerging economies. Only six out of the top 20 are from European countries; five are from India and three from China. The top five destinations for design, testing, and R&D are Bangalore, Hyderabad, and Pune in India; Singapore; and Shanghai in China (Figure 4b). Most of the jobs created are in design and testing, while a few are in R&D activities.
Emerging innovation hotspots in developing economies The f lourishing of new clusters of innovative start-ups in emerging economies is contributing to redefine the mapping of world innovation. Yet Silicon Valley is still the reference when thinking about a creative environment where knowledge-based f irms f lourish. In that environment, potential new entrepreneurs can easily make contact with a high-quality and vibrant science community, can interact with big and top innovative f irms, and can have easy access to technologies and finance. Furthermore, the regulatory framework is businessfriendly and less adverse to risk-taking than it is in other localities.13 However, new innovative hotspots where technology-based entrepreneurs cluster together are beginning to appear in other regions. Israel, for instance, brands itself as the ‘Start-up Nation’. But start-up hubs have begun to f lourish in new places, including specific locations in Africa, Asia, and Latin America. Several factors contribute to explain the emergence of clusters of start-ups in emerging economies. These include (1) the diffusion of ICTs that has opened new opportunities for knowledge exchange and innovation, making start-up companies a feasible business option in
THE GLOBAL INNOVATION INDEX 2013
Collaboration modes also differ according to sectors. For instance, top patenting regions in telecommunications, biotechnology, and renewable energies exhibit different collaborative behaviours. Some inventors tend to apply for patents in collaboration with other inventors located outside their region, whereas others tend to co-invent mostly with inventors located in the same region. Ajmone-Marsan and Primi (2012) show that f irst-mover regions— that is, early patent leaders—tend to maintain their leadership over time, but there are opportunities for others to become local, national, or global hubs. An example of this growth is seen in the telecommunication sector: although California has maintained its leadership in telecommunications since the 1970s, the Chinese province of Guangdong has recently ranked among the top 20 world patenting regions in the field. National borders play an important role. Most top patenting regions show a high propensity to establish co-patenting collaborations within their own country rather than with foreign ones. This can be because of geographic proximity or scientific, linguistic, and cultural proximity, as well as for economic reasons.
2: The Evolving Geography of Innovation
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