Innovation - Climate Change?
climate conducive to innovative activity has economic, social and institutional dimensions. Firms are more inclined to innovate when profits are rising and sales growth is in prospect; innovation is easier when business and investment communities are willing to bear and manage risk; and the interactions on which innovation depends can flourish freely only when systems and structures to link potential partners are in place.
A fourth dimension is equally critical, but has sometimes been overlooked - that is, the framework conditions which support or discourage entrepreneurship, risk-taking, and collaboration. These conditions are embodied in legislation, regulatory and tax regimes, and professional and institutional codes of practice which have usually been designed without consideration for their impacts on innovation. They nevertheless affect profoundly both the investment decisions of companies and the career choices of individuals. If the framework conditions are wrong, many companies never explore new technological opportunities, and many potential entrepreneurs never leave their jobs in research institutes or large firms.
The BEST initiative (see The BEST is Yet to Come) is tackling head-on the issue of the framework conditions for business, and for technology-oriented SMEs in particular, in the European Union. Improving these conditions is now a cornerstone of EU enterprise policy. Meanwhile, in the 13 accession countries, six of which are examined in this edition's dossier article, it is also becoming clear that measures to stimulate and support innovative activity must be accompanied by co-ordinated efforts to improve the framework conditions for business.
January 2001
