Monday, October 11, 2021

Dan Breznitz's "Innovation in Real Places"

Dan Breznitz is a Professor and Munk Chair of Innovation Studies in the Munk School of Global Affairs and Public Policy with a cross-appointment in the Department of Political Science of the University of Toronto, where he is also the Co-Director of the Innovation Policy Lab. He is a Fellow of the Canadian Institute for Advanced Research, where he co-founded and co-directs the program on Innovation, Equity and the Future of Prosperity. His award-winning books include Innovation and the State, The Run of the Red Queen, and The Third Globalization.

Breznitz applied the “Page 99 Test” to his latest book, Innovation in Real Places: Strategies for Prosperity in an Unforgiving World, and reported the following:
Opening the book at page 99 lands the reader in the last page of chapter 6 of the book.
The establishment and development of two international trade shows created a stable bridge between Livenza’s producers and global pipelines.

As we have seen, stage 2 and stage 3 innovation are a viable option for locales seeking sustained and widely distributed innovation-based economic growth. They are not a panacea—an ecosystem honed to produce and scale-up firms focused on those stages is ill equipped to support and sustain firms that strive to succeed in cutting-edge innovation. The other side of the strengths of complementarities enhancing each other, the gestalt of the system that they form, means that companies needing different sets of public and semi-public goods will be ill-served. Further, as the cases of Taiwan, Brenta, and Alto Livenza show, developing such a system is not a task for a day or even a year, it is a long-haul endeavor of experimentation and development and co-evolution of the four fundamentals that leads to success. Further, the global economic system is not a static one, and hence it is not enough to just engage the local with the global. Public policies need to constantly redefine, improve, and excel in connecting the right parts of the global to the local, changing those connections in time as both the region and the global industry change and evolve.
As such it immediately leads the reader to few of the main tenets of the book.

First that innovation is not invention. Innovation is the complete process of taking new ideas and devising new or improved products and services. It comes in all stages from the first vision, design, development, production, sale, usage, to the after-sale of products and services. The true impact of innovation was not in the invention of the internal combustion engine, nor even the invention of the first automobile. The true impact of innovation is the continuous stream of implementation of large and small inventions to make the car a better and cheaper product, to improve the way we produce it, and to continuously find ingenious ways to sell, market, and service cars. If innovation was invention, a smartphone would still be a very large wooden box with a rotating dial and it would take us about a minute to even attempt a call. In technical terms, invention is the process of coming up with a truly novel idea; while innovation is the process of using ideas to offer new or improved products and services at the same factor cost.

Second that we have to understand globalization, specifically the global fragmentation of production and services if we want to understand how and where does innovation translate to growth, jobs and prosperity. If there is something truly new in our supposedly new global economy, it is the global fragmentation of production. As production of goods and services fragments, and vertically-integrated production – a system in which a product or services was manufactured from basic materials to a final product in one location – come crushing down, new entry points for innovation-based growth have been opening in old and new industries for places who know how to take them. In the book I schematically break down this production system into four stages from novelty to assembly.

Third that there are multiple paths for communities to secure innovation-based local prosperity, each one focused on a different stage of production, each one with different distributional outcome and each one necessitating a long process of experimentation and co-evolution between local actors and the local actors and the global economy.

Last, but certainly not least, the readers get some teasers about Taiwan and the Rivera del Brenta, two of my favorite cases in the book.
Learn more about Innovation in Real Places at the Oxford University Press website.

--Marshal Zeringue