Essay by Jay Lloyd and Annalee Saxenian: “Silicon Valley’s dynamism during the final three decades of the twentieth century highlighted the singular importance of social and professional networks to innovation. Since that time, contemporary and historical case studies have corroborated the link between networks and the pace of technological change. These studies have shown that networks of networks, or ecosystems, that are characterized by a mix of collaboration and competition, can accelerate learning and problem-solving.
However, these insights about networks, collaboration, and ecosystems remain surprisingly absent from public debates about science and technology policy. Since the end of World War II, innovation policy has targeted economic inputs such as funding for basic scientific research and a highly skilled workforce (via education, training, and/or immigration), as well as support for commercialization of technology, investments in information technology, and free trade. Work on national systems of innovation, by contrast, seeks to define the optimal ensembles of institutions and policies. Alternatively, policy attention is focused on achieving efficiencies and scale by gaining control over value chains, especially in critical industries such as semiconductors. Antitrust advocates have attributed stalled technological innovation to monopolistic concentration among large firms, arguing that divestiture or regulation is necessary to reinvigorate competition and speed gains for society. These approaches ignore the lessons of network research, potentially threatening the very ecosystems that could unlock competitive advantages. For example, attempts to strengthen value chains risk cutting producers off from global networks, leaving them vulnerable to shifting markets and technology and weakening the wider ecosystem. Breaking up large platform firms may likewise undermine less visible internal interdependencies that support innovation, while doing nothing to encourage external collaboration.
Networks of networks, or ecosystems, that are characterized by a mix of collaboration and competition, can accelerate learning and problem-solving.
How might the public sector promote and strengthen important network connections in a world of continuous flux? This essay reexamines innovation policy through the lens of the current era of cloud computing, arguing that the public sector has a regulatory role as well as a nurturing one to play in fostering innovation ecosystems…(More)”.