How to Evaluate the Strengths of an Innovation Ecosystem
May 17, 2024
May 17, 2024 ・ minutes reading time
Identifying the strengths of an innovation ecosystem requires analyzing the complexity and diversity of its capabilities across sectors. From primary industries to advanced technological fields, each capability reflects a different level of expertise and infrastructure. By assessing where an ecosystem excels—whether in science, technology, or manufacturing—stakeholders can prioritize key areas for development. Understanding these strengths allows for targeted investments in innovation, fostering growth in the areas that offer the greatest potential for long-term success.
Complex capabilities highly rewarding
As countries become more diversified in general their capabilities become less common across other countries. However, rare capabilities are not necessarily complex. Some capabilities may be rare because they are not attractive enough to acquire or because they are located in specific places in the world. Complex capabilities are those that everybody wants but few know how to develop. This is the case of, for example, audiovisual, electronics and semiconductor technologies. These capabilities appear exclusively in diversified countries that have managed to collect know-how across different dimensions.
Each country has a different set of these innovation capabilities, and looking into the complexity of each can help them identify which of their strengths has more potential to drive economic development. For instance, the Republic of Korea demonstrates a broad range of innovation capabilities, excelling in complex fields such as semiconductors, ICTs, and audiovisual technologies, with leading companies like Samsung and LG showcasing its strengths. In contrast, Egypt's innovation capabilities, are more limited and concentrated in less complex domains, primarily agrifood, mineral fuels, manufacturing, and chemicals. Egypt's most complex strengths lie in the scientific dimension (chemistry, biology, and engineering), with few technological capabilities.
How to nurture complex capabilities
Capabilities connect to each other according to their complementarity. This proximity can be measured by looking at how often these innovation capabilities co occur in the same ecosystem. In this sense, innovation capabilities can be like a network connecting similar forms of knowledge.
To nurture complex capabilities, it is important to develop new complementary capabilities. Ecosystems with expertise in a certain field are more likely to successfully enter new related fields while also preserving the capabilities they already possess. By maintaining these existing related capabilities, innovation ecosystems are more likely to retain and further develop even the most complex ones. On the opposite end, innovation ecosystems often lose those capabilities that are isolated from their related skills.
In this scenario, public policies play a vital role in strengthening complex capabilities. Governments can target related fields by offering incentives like R&D subsidies and tax credits, encouraging companies to direct their innovation efforts toward complementary activities. Additionally, policies that promote cross-disciplinary research and foster partnerships between businesses and universities can accelerate the exchange of knowledge and skills across related sectors, further enhancing innovation and capability-building.
