Professor Bengt-Åke Lundvall, innovation researcher at Aalborg University, Denmark, and one of 27 Ambassadors of the European Year of Innovation & Creativity
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How did you first become interested in innovation research?
I have been working on innovation for 30 years and it all started because we were quite critical of the popular idea of international competitiveness. At that time, economists thought about competitiveness as a question of having low costs, which often meant having low wages. And I couldn't find it reasonable to have as a political objective to have wages as low as possible.
What are now seen as the major drivers of innovation in a developed economy?
We did empirical research in the 1970s which showed that economies with the strongest growth in real wages were the most competitive. So we learned that what determines competitiveness is not cost.
Then the next question was what determines competitiveness if it's not cost. We began by looking at the role of science and technology. In the 1980s we did several big studies in Denmark where we studied the use of technology and linked it to productivity and competitiveness.
One major result from that work was that science and technology is important, but there are other factors which mediate between science and technology and economic results, like growth, productivity and competitiveness. This had a lot to do with human resources and with organisation.
So there's more to innovation than just upgrading to the latest technology?
Yes. We confirmed this in further research on productivity where we showed that in Denmark during a period when firms introduced a lot of very advanced computer technology, if they did not combine this with change in their organisation and investment in people, they actually got a negative impact on productivity.
This had such a scale in Denmark that in the final years of the 1980s we actually had a falling rate of productivity – not just a low rate, but a real fall in the rate of productivity in manufacturing over a three-year period. We found that change and investing in staff had a real impact.
This is the way we started moving from competitiveness towards investing in science and technology and then on to focusing on human resources.
One of the results we found was that innovation is a very interactive process. It very seldom achieved by individuals or organisations alone. They have to interact. People interact with others in teams, organisations interact with networks, with suppliers, knowledge institutions, and so on. Your work on innovation systems has been deployed by several governments.
Which country was the first to test the theory?
I developed – along with a colleague, Christopher Freeman – the idea of national innovation systems. We introduced that concept in the middle of the 1980s and it was first used in Finland by another of the EYCI ambassadors, Esko Tapani Aho, when he was Finnish prime minister. He was the first major politician in the world to talk about a national innovation system, and then he used this concept to develop a strategy in a situation which was a very serious crisis.
If you recall, when Russia went down production fell, unemployment rose. They invested a lot in science and tried to link the different parts of their system. Now everybody uses this concept. China's new 15-year-plan starts with saying their strategy will be organised within the framework of the innovation system we developed. I've been there a lot and, in fact, am better known in China than in Europe.
Has your original idea changed since you initially proposed it?
When you get this diffusion of a concept, it changes the original idea somewhat. What has happened is that a lot of people, including in the European Commission, use the innovation system as just something about universities and industry, about science and technology innovation.
But this is not the way we used the concept to begin with. The first major book on innovation was by Freeman and was about the Japanese system. He showed the importance of human resources and organisational issues – it's much broader than just technology.
I have spent the last 15 years trying to correct the idea that innovation policy is just something about science, technology and innovation.
What are the characteristics of an innovative company?
We have done an empirical analysis of 2,000 Danish firms, where we show that firms combining science-based learning with experience-based learning are most innovative. I call science-based learning 'STI learning', and experience-based learning 'DUI learning' which stands for learning by doing, using and interacting.
Those that combine these two are more than twice as innovative as those that are strong in just one of these ways of working.
It means that a lot of innovation policy has to be to balance the capabilities of organisations. Those who are weak in DUI need to be supported to develop organisational learning, better interaction with customers. Those who are strong in DUI but weak in STI need to get linked up to the scientific system.
The idea also is that innovation is something that is going on both in high-tech and low-tech companies. Innovation is not just for electronics or biotechnology. It's for all kinds of firms. Today all companies need to have a certain connection with the science base, but they also need to develop learning organisations and links to universities, etc.
What is the focus of your more recent work?
What I've done in recent and forthcoming papers is to look at the organisation of work and link it to innovation. We're using data from the Dublin Institute on working and living conditions. The kind of questions asked are: Do you learn new things at your job? Do you have some control over your work situation? Have you a chance to apply your own ideas?
We use this to distinguish different job types, where one extreme is tailorism, where you have no freedom whatsoever and you learn nothing new. Another is discretionary learning, where you have some opportunity to organise things yourself.
We have shown that countries in Europe which are strong in discretionary learning are also strong in innovation. I think one of the major weaknesses of southern Europe is not so much too little investment in academic training. It's more a question of upgrading the skills of workers, establishing professional workers, linking academic training to more practical issues, and establishing a more democratic and participatory working life.
You have also done a lot of work on flexicurity. Do you advocate widespread adoption of this idea?
We looked at flexicurity and tried to see what characterised national economies where you had a lot of creative work compared to others, and we found two characteristics which were particularly important.
One is related to having a broad-based, open and democratic education system. By that, I mean a combination of theoretical studies and practical studies, giving high priority to both. It should be possible for people at any age to enter education, even if you missed the train first time around.
And finally, I think it should be democratic – the distance between professors and students should not be too wide. This kind of education system supports creative work.
The other thing that seems to support creativity is when you have flexibility in terms of high mobility within organisations, but you also have active labour market policies with a lot of investment in training and basic economic security for those who become unemployed. So we should develop the labour market along the lines of the flexicurity model.
