As innovation is the driving factor behind how global locations become hotspots, some countries choose to offer their new technology to the rest of the world while others keep it close to home. Eastern European countries such as Hungary, Poland and Romania are looking to export their innovations.
How a country chooses to market its innovation efforts depends on the nature of its government style. “Eastern Europe is modeling itself after the US model of entrepreneurial innovation. They want to provide value-added products and processes and then export them to the rest of the world,” explains Mark Minevich, CEO of Going Global Ventures Inc. On the other side of the philosophical divide are Russia and the Ukraine which are trying to emulate Singapore's model, says Minevich. Singapore uses a centralized or government controlled process to become innovative in product development or niche markets.
Singapore's biomedical sciences industry, for example, has a manufacturing output of $23 billion Singapore dollars. And that is an increase of 30.2%. Companies such as Abbott, GlaxoSmithKline, Lonza, Merck & Co, Novartis, Pfizer, Sanofi-Aventis and Schering-Plough, operate multi-purpose plants. Manufacturing companies in Singapore receive a variety of tax incentives including a Pioneer Incentive which awards full corporate tax exemption on qualifying profits for a set period. There is also an Investment Allowance, which is offered on qualifying equipment costs incurred within a set period. The Enhanced Tax Deduction for R&D Expenses enables companies to claim a tax deduction on expenses on R&D outsourced to any R&D organization, local or overseas. Another country that offers government assistance but not with the intention of exporting knowledge is Russia. Russia in concentrating on industries such as steel, energy, auto production in an effort to supply its own growing market and plans to continue to keep things close to home says Minevich.
Eastern European countries such as Hungary, Poland and Romania are looking to export their innovations. They will bring in talent from across the globe including China, India, US and the UK to find the best talent to assist in their research and development efforts, explains Minvich. The government has less involvement in these efforts than in Russia or the Ukraine.
Looking specifically at Hungary, they ranked 29th in patents' registrations in the Global Competitiveness Report. Augusto Lopez-Claros, head of the World Economic Forum's Global Competitiveness Network said that this shows Hungary's high innovation potential. But he warned that “Hungary will need to tackle a number of challenges if it is to retain its innovative capacity and remain competitive in the face of rising labor costs. While the country has fairly efficient labor, financial and goods markets, and the quality of education is good, efforts will have to be maintained to reduce the burden imposed on business by government regulation and tackle government favoritism and inefficiencies.”
Moving to the Middle East, Israel prefers the entrepreneurial model. Many of its larger companies that are now setting up show outside Israel had their beginnings in small research and development companies. High tech is well represented with Jerusalem housing 180 hi-tech companies, employing 12,000 people. And in the most recent Global Competitiveness Report Israel was ranked first in the availability of scientists and engineers. In Dubai, they are developing knowledge clusters in real estate and multi-media and are attracting investors globally says Minevich.
“The innovation models of Africa and South America are fluid. They develop their own model. South America in particular is using a hybrid of the North American and Singapore models. In the Scandinavian countries such as Norway, Sweden and Finland innovation is a joint project,” says Minevich. Everything is done by consensus and everyone must agree. “The top rankings of Switzerland and the Nordic countries show that good institutions and competent macroeconomic management, coupled with world-class educational attainment and a focus on technology and innovation, are a successful strategy for boosting competitiveness in an increasingly complex global economy,” says the World Economic Forum with regards to Finland, Sweden and Denmark taking the second, third and fourth spots on the Global Competitiveness Report in 2007.
“Looking to the future, models of innovation will expand to include the concept of socially responsible innovation. Companies want to make sure they are giving back to the community and that their companies are environmentally sustainable,” says Minevich. (industryweek.com)
Mark Minevich is the co-author of “Six Billion Minds: Managing Outsourcing in the Global Knowledge Economy”.
Other authors include Dr. Frank-Jurgen Richter and Faisal Hoque.