Innovation research

Theme for 2012: Intangibles, value creation and policy

In the midst of an economic crisis, it is particularly important to find new sources of long-term growth for Finland.

Earlier growth drivers included a high level of education and investments in research and development activities. Finland is already a world leader in these areas. On the other hand, innovation activities and sources of growth are increasingly dependent on intangible factors and different types of assets – such as business and marketing expertise and design – the utilisation of which still needs development. From the perspective of innovation policy, we need a diverse understanding of intangible factors and their impacts on value creation and growth.

The research projects funded in 2012 are grouped according to the following sub-themes.

Intangible assets: valorising hidden opportunities

Value Creation and Capture – The Impact of Recycling and Global Dispersion of Intangible Capital (module A)
Etlatieto: Martti Kullvik

The goal of this research is two-fold: 1) to understand how intellectual capital (IC) is re-used, e.g., after corporate failure, and 2) to find out to what extent firms' intangible assets and value capture have globalized. The first part addresses a perpetual cycle of creative destruction and re-emergence of corporate IC where IC is reused and integrated with other IC sources to capture value. The 2nd part tracks the globalization of Finnish corporate intangible assets, and assesses whether its geographic distribution coincides with that of profit generation and risks. The proposed project has a very strong international dimension with numerous international partners.

Patients, business and the state – translating health information into sustainable benefits
University of Helsinki: Arto Tupasela

The study examines governance challenges posed by the utilization and translation of healthcare information, including information derived from biobank research and genetic databases into globally sustainable and socially robust healthcare products and services. The starting point of the study is a 1) comparative analysis of governance and engagement regimes in Finland, England, US, Canada and Iceland, as well as supranational actors, to manage the collections, storage, use and commercialization of healthcare and genetic data, 2) exploring the implications that new patient engagement strategies have for the creation and deployment of intangible assets and value creation within the Finnish innovation system, and 3) identifying and scrutinizing critical elements within the patient-business-state axis that play a role in the sustainability of value creation regimes that can be deployed by companies.

Towards Inclusive Use of Intellectual Capital
University of Turku: Mika Raunio

Diversity in intellectual capital is for the benefit of the Finnish economy. Key source of this diversity are people who have immigrated to Finland, but are especially the highly skilled integrated to knowledge generation and innovation processes of the Finnish firms and organizations? If not, why? What are the communities and inclusive practices that open access to activities within an innovation system? The main aim of the study is to contribute to the Finnish innovation policy and innovation management practices by increasing research knowledge on the role and use of foreign human capital in innovation activities. The key questions are: 1) how foreign human capital is integrated into innovation activities; 2) what kind of communities there are facilitating this; 3) what are the inclusive and exclusive practices that define the integration of foreign human capital to innovation activities; and 4) are there policies, practices and types of innovation communities in selected foreign countries that could be usefully applied in Finland? These questions will be studied by 1) identifying a variety of innovation communities (e.g. Meego Network Finland, Aalto ES, New Factory Tampere,); 2) conducting a survey (250 responses) among the immigrated; 3) conducting altogether 40-55 interviews preceding the survey and as a part of the cases abroad.

Social entrepreneurship in innovative value creation
Lappeenranta University of Technology, University of Turku: Helinä Melkas

Social enterprises have a high potential as innovations, innovators and employers. The present view of them is too narrow; it is not a question of employing, for example, marginalised people only. These enterprises are directly relevant with regard to intangibles (e.g., human and social capital). In Finland, they have so far attracted quite meagre research attention, but at the EU and global level, the interest towards them is rising rapidly. This theoretical and empirical research defines concepts and measures as well as identifies good policy practices and policy thinking options. The conditions of social entrepreneurship are addressed from various viewpoints and related theoretical frameworks: innovation (social innovation, innovation systems), entrepreneurship, legislation, and employment issues. The research will be conducted at the international (comparisons based on macro-level data) and national level; the meso-level of regions and communities, and the micro-level of case companies and their personnel. The theoretical and practical aims of the project are to (i) better understand the conditions under which social entrepreneurship can contribute effectively and efficiently to solving societal challenges in a sustainable way, (ii) provide participatory innovation support to social enterprises particularly in the private and third sectors in their establishment or mature stages, and (iii) contribute to design of policies to support the development and exploitation of the un- or under-utilized intangible assets that are hidden in social enterprises and their employees.

 

Intangible assets: management and policy

Intellectual Capital analyses for political decision making
University of Turku: Pirjo Ståhle

Along with the recent rise of the Knowledge Economy, intangible issues have become the key bases for value creation. According to recent studies, Finland as a nation has plenty of intellectual potential, but Finnish organizations seem to lack the capacity to leverage this potential for creating value. To help Finnish organizations to improve their capabilities in this context, our project aims to make the intangible success factors of Finnish companies visible with a concrete measurement approach. The project will particularly analyze which intellectual capital categories and management mechanisms are the most effective ones for value creation. The project will compare the Finnish situation to an extensive international dataset – collected in collaboration with international project partners – in order to outline our key national strengths and weaknesses. The project will thereby improve Finnish companies' ability to manage their intellectual capital so that they can create economic value and growth, innovation and well-being with it. It will furthermore produce a set of policy briefs to assist ascertaining that the Finnish innovation system will sustain and develop its international excellence in global competition.

Value Creation and Capture – The Impact of Recycling and Global Dispersion of Intangible Capital (module B)
Etlatieto: Jyrki Ali-Yrkkö

The goal of this research is two-fold: 1) to understand how intellectual capital (IC) is re-used, e.g., after corporate failure, and 2) to find out to what extent firms' intangible assets and value capture have globalized. The first part addresses a perpetual cycle of creative destruction and re-emergence of corporate IC where IC is reused and integrated with other IC sources to capture value. The 2nd part tracks the globalization of Finnish corporate intangible assets, and assesses whether its geographic distribution coincides with that of profit generation and risks. The proposed project has a very strong international dimension with numerous international partners.

Management of intellectual capital – discontinuous innovation approach
Aalto University: Pekka Berg

Management of Intangibles – Discontinuous Innovation Approach (MAIN) is a research project conducted by Innovation Management Institute IMI from Aalto University School of Science. The project is based on strong collaboration with companies and international research groups. It examines the management of intangible assets from the standpoints of innovation processes and innovation policy. The studied forms of intangible assets cover the internal and external innovation structures of firms, such as processes, learning, capabilities, network relations and roles. The project concentrates on control and management methods which aim to systematically utilize intangible assets in developing radical and discontinuous innovations. It also discusses the challenges and requirements for innovation policy in promoting the development of radical and discontinuous innovations.

Open innovation on the borderline of university-enterprise cooperation
VTT, Lappeenranta University of Technology, University of Helsinki, University of Turku: Janne Lehenkari

The Open-UNIC research project advances research on open innovation as a new source of value creation in the collaboration between Finnish universities and enterprises. The study focuses on the role of universities as utilisers of unused intangible assets of firms – patents and ideas – in organized and managed research and student projects. Research work consists of a) a survey that presents the status quo of current activities, b) project-level case studies and c) policy workshops that assure relevance of research. As a result, a Finnish handbook of open innovation is prepared for practitioners and policy guidance.

Global Time – well-being and innovativeness in global work
Aalto University: Matti Vartiainen

In this project we will study how demands set by time differences (e.g. having to extend working hours to enable synchronous work) affect well-being and innovativeness in globally distributed teamwork. We complement the intellectual capital (or intangible assets) research tradition with organizational psychology theories in a novel manner. The multi-method analysis of exceptionally rich data on global work demands, resources, well-being effects and innovativeness enables us to produce and test guidelines and policies that support sustainable and innovative global teamwork.

 

Drivers and indicators for intangible value creation

Intellectual Capital and Value Creation
Lappeenranta University of Technology: Aino Kianto

Along with the recent rise of the Knowledge Economy, intangible issues have become the key bases for value creation. According to recent studies, Finland as a nation has plenty of intellectual potential, but Finnish organizations seem to lack the capacity to leverage this potential for creating value. To help Finnish organizations to improve their capabilities in this context, our project aims to make the intangible success factors of Finnish companies visible with a concrete measurement approach. The project will particularly analyze which intellectual capital categories and management mechanisms are the most effective ones for value creation. The project will compare the Finnish situation to an extensive international dataset – collected in collaboration with international project partners – in order to outline our key national strengths and weaknesses. The project will thereby improve Finnish companies' ability to manage their intellectual capital so that they can create economic value and growth, innovation and well-being with it. It will furthermore produce a set of policy briefs to assist ascertaining that the Finnish innovation system will sustain and develop its international excellence in global competition.

Relational Capital for Innovative Growth Companies
VTT, University of Tampere: Kaisa Still

Why was Instagram – a team of twelve – sold to Facebook for a whopping 1 billion dollars – and why the valuation turned out to be partly speculative? In this study, we see the need for novel approaches and propose exploring the key concept of relational capital for understanding and measuring the intangible nature of innovation and value creation. Relying on relational view showing that competitive advantages not only derive from firm-level resources, but also from capabilities embedded in relationships, we study relational capital as a resource created through social network processes. Therefore, we see that tools and methods of social network analysis contribute towards its measurement and understanding. We will use action research for co-creating with research collaborators as well as with the business partners the possibilities of developing data-driven visual indicators for actionable and possible interactive insights on relational capital for innovative growth companies, individuals, investors, customers, policy makers and other stakeholders.

Intangible capital – supporting knowledge and value added in Europe
University of Vaasa: Hannu Piekkola

INNOFINLAND undertakes a comprehensive evaluation of intangible investment in Finland and Europe. The measures are used to explain innovative growth and value added to experience and search goods and the ways protecting innovative ideas through patenting. The knowledge spillovers are assumed essential to the companies and to the European regions. Intangible capital is measured at firm level using cost-based approaches compatible with system of national accounts and with performance-based approaches, with evaluation how firm-level training and organisational practices transform into intangible investment and customer capital.

Relational and social assets as shapers of adaptive capabilities for innovation
VTT: Juha Oksanen

This proposal regards intangibles in the form of relational capital and capabilities. It focuses on the role of a specific class of intangibles on the input side of innovation – relational capital – in shaping another key-output side intangible, namely adaptive capability. We approach these through the lens of inter-organizational macro-cultures concept, which is new to innovation policy research. The macro-culture refers to "the relatively idiosyncratic, organisation-related beliefs that are shared among top managers across organisations". Shaped by relational and social capital, which affect future strategic and technological similarity, macro-cultures can also limit inventiveness restricting the adaptive and innovative capabilities leading to failure to renew. We will investigate the role of different intangible assets as well as forms of economic inter-dependences (e.g. value-added chains or venture capitalist-innovator relationships) and forms of governance on the formation and impact of macro-cultures. Our empirical focus will be on selected industries (e.g. energy & forest and ICT) in international comparative settings (Finland, Brazil, and South Korea).