SIXTH FRAMEWORK PROGRAMME
PRIORITY 8.1.B.3.5
022780
Information Society
Technologies
Benchmarking and
Fostering
Transformative Use of ICT in
EU Regions
Differences in Innovation Culture
Across Europe
– A Discussion Paper –
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Report Version:
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Draft
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Report Preparation Date:
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February, 2008
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Classification:
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Public
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Authors:
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Maike Didero, Karsten Gareis, Pedro Marques & Mirjam
Ratzke, with contributions from other project partners
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Contract Start Date:
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1st January 2006
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Duration:
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30 Months
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Project Co-ordinator:
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empirica (Germany)
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Partners:
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The University of Newcastle upon Tyne (U.K.), European
Regional
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Information Society Association (Belgium),
Queen Mary and Westfield
College, University of
London (U.K.)
Contents
1 Introduction
The starting point for this document is the TRANSFORM
State(s) of the Art(s) report (Cornford et al. 2006) which took a broad look
into theories explaining why there are differences in Regional Innovation
Culture (RIC) and how specific characteristics of RICs influence the capability
of regions to achieve economic and social progress in the knowledge-based
economy and society.
Now that the case study regions have been selected, the task
is to review the literature in order to identify existing empirical evidence about the type of differences in the innovation
culture between the regions and countries we want to analyse. Unfortunately,
the elusiveness of the term “regional innovation culture” (and the various uses
which the different academic faculties make of the term “culture”) makes this a
difficult task.
The present document summarises some available evidence
about differences in innovation culture across Europe, with a special focus on
the Germany, Italy, Poland, Slovakia, Spain, Sweden, United Kingdom – the
countries in which case studies are conducted as part of TRANSFORM. In
addition, EU15 and EU25 averages and figures for the USA are presented,
wherever available, to provide points of reference.
Section 2 looks into available evidence from mainly
qualitative empirical analysis of innovation related cultural differences
between EU countries. Arguably, not much of this evidence has found its way
into informing policy making at EU level. A main reason is likely to be the
looming risk of cultural determinism. We also quote from available statistical
data which can be used for highlighting differences in innovation culture
across Europe. A small number of analytical reports have produced data which in
some way cover the aspects of willingness and open-mindedness of citizen
towards technological innovation and entrepreneurial activities. Country
differences which can be detected in survey-based statistics, however, need to
be treated with care because of the difficulty to conduct robust cross-cultural
research using harmonised data collection tools (see Harkness et al.
2003).
Section 3 presents findings on differences in innovation
culture within nation states, i.e. at interregional level. The number of
studies which have been conducted in this area is small and varies across EU
Member States. Nevertheless, we feel that the studies cited can shed some light
on differences in Regional Innovation Culture within Europe.
2 National Differences in Innovation Culture
This chapter deals with the question what the research
literature says about the extent to which there are differences in national
culture which have an influence on the capability of regions to foster
innovation, and the specific ways in which innovation takes places within a
country.
“Innovation culture” is to be understood in terms of
attitudes towards innovation, technology, exchange of knowledge,
entrepreneurial activities, business, uncertainty (Hofstede 2001), and related behaviour
and historical trajectories.
Most comparative work on cultures is based on the assumption
that there is a large degree of homogeneity within nation states as opposed to
large differences between nation states. The work of Hofstede and his followers,
for example, does not look into differences between regions within countries at
all, with very few exceptions (e.g. Belgium is divided into Wallonia and
Flanders).
It is for this reason that this document first looks into
available evidence on differences in innovation culture across countries.
Indeed, although the main focus of TRANSFORM is on region-level innovation
culture, it must still be assumed that the properties of national cultural
exert a – more or less strong – influence on regional settings, and as such
need to be taken into account.
2.1 “Measuring” National Culture
Meaningful empirical research on cultural influences on ICT
adoption must first develop a definition of what one intends to understand by
“culture”. The following three showcase definitions disclose the main aspects
to be considered in any definition of culture:
Herbig and Dunphy (1998:13) define culture as follows:
“culture is the sum total of a way of life: it is the values, traits, or
behaviours shared by the people within a region. The function of culture is to
establish modes of conduct, standards of performance, and ways of dealing with
interpersonal and environmental relations that will reduce uncertainty,
increase predictability, and thereby promote survival and growth among the
members if any society.” This definition hints at the fact that culture is not
stable but evolves to meet the needs of society. That culture is not fixed once
and for all is underlined by studies mapping value change (Rosenstiel &
Koch: 201-203).
Hofstede (1991:5) however presents a more definite and less
flexible conception of culture when he defines it as “the collective
programming of the mind, which distinguishes the members of one human group
from another.” Hofstede concedes that people belong to different cultural
groups at the same time (nation, gender, organisation…). With regard to
economic activities however he considers the national scale to be of particular
importance. According to Hofstede, “national culture” is the set of collective
beliefs and value that distinguishes people of one nationality from those of
another. This view perceives national cultures as extremely stable. Hofstede
claims that “(…) this stability can be explained from the reinforcement of
culture patterns by the institutions that themselves are products of the
dominant cultural value systems”. Even if cultures shift in the log run, “they
shift in formation, so that the differences between them remain intact”
(Hofstede 2001:255).
In order to arrive at a possible “measure” of culture, Brons
(2006:549) looked into different definitions of culture. He was able to
distinguish two major elements present in nearly all definitions of culture: 1)
culture guides, influences or co-determines behaviour and 2) culture is socially
transferred. This means in short that culture is perceived as “meta-behaviour”.
Brons holds that meta behaviour as some deeper structure is reflected in actual
behaviour. Therefore it should be possible to measure cultural differences
indirectly, that is to infer them from data about collective behaviour. He
points to the problem that although data about social behaviour (social
mobility, frequency of labour conflicts, political violence, wealth
distribution) tell something about a country’s (or region’s) culture it is not
always very clear how to interpret these data.
Values are often seen as one “layer” of cultural traits (see
onion model in Figure 11 on page 24). Rosenstiel and Koch (2001:201) argue
that, like culture in general, „values are an abstraction; they cannot be
observed directly. They have to be inferred from indicators. Such indicators
can be (a) observable human behaviour, (b) human artefacts, or (c) verbal
statements by persons about their value orientation.” Most research on values
and on value change however resorts to the third kind of indicator: statements
on value orientation. One important influence of values is on corporate
cultures that in turn represent an important indicator for innovative capacity.
The authors hold that although “socioeconomic values are not identical with the
spectrum of values that make up corporate culture and that also includes norms
and ideologies, (...) they do constitute part of it. Because corporate cultures
are rooted in a consensus on values, they are directly affected by value
change” (Rosenstiel & Koch 2001:209).
2.2 Dimensions of (National) Culture
Different
models trying to map out differences in national culture have been established,
many of which turn to “dimensions”, or specific “traits” of culture in order to
work out different systems of cultural attitudes and behaviour. Myers and Tan
(2002:5) distinguish three categories of national culture models: Single
dimension models, Multiple dimension models and Historical-social models.
Table 1: Models of national culture
Source: Myers and Tan (2002:6)
The literature review effected by Myers and Tan (2002:5)
shows that several authors tried to operationalise culture through the use of
multiple cultural dimensions. The most famous and most widely used of these
“models of cultural dimensions” was developed by Hofstede (2001). He based his
model on a survey of employees in IBM subsidiaries in 64 countries (in 1970).
The first version of Hofstede’s model of national culture contained four
dimensions: power distance, individualism, masculinity, uncertainty avoidance,
and long-term orientation:
Power distance
is the extent to which the less powerful members of organizations and
institutions (like the family) accept and expect that power is distributed unequally.
This represents inequality (more versus less), but defined from below, not from
above. It suggests that a society's level of inequality is endorsed by the
followers as much as by the leaders.
Individualism
is seen versus its opposite, collectivism, that is the degree to which
individuals are integrated into groups. On the individualist side we find
societies in which the ties between individuals are loose: everyone is expected
to look after him/herself and his/her immediate family. On the collectivist
side we find societies in which people from birth onwards are integrated into
strong, cohesive in-groups, often extended families which continue protecting
them in exchange for unquestioning loyalty.
Masculinity
versus its opposite, femininity, refers to
the distribution of roles between the genders which is another fundamental
issue for any society to which a range of solutions are found. The IBM studies
revealed that (a) women's values differ less among societies than men's values;
(b) men's values from one country to another contain a dimension from very
assertive and competitive and maximally different from women's values on the
one side, to modest and caring and similar to women's values on the other. The
assertive pole has been called 'masculine' and the modest, caring pole
'feminine'. The women in feminine countries have the same modest, caring values
as the men; in the masculine countries they are somewhat assertive and
competitive, but not as much as the men, so that these countries show a gap
between men's values and women's values.
Uncertainty
avoidance deals with a society's tolerance for uncertainty and ambiguity.
It indicates to what extent a culture programs its members to feel either
uncomfortable or comfortable in unstructured situations. Uncertainty avoiding
cultures try to minimize the possibility of such situations by strict laws and
rules, safety and security measures, and on the philosophical and religious
level by a belief in absolute truth. People in uncertainty avoiding countries
are also more emotional, and motivated by inner nervous energy. The opposite
type, uncertainty accepting cultures, are more tolerant of opinions different
from what they are used to; they try to have as few rules as possible, and on
the philosophical and religious level they are relativist and allow many
currents to flow side by side. People within these cultures are more phlegmatic
and contemplative, and not expected by their environment to express emotions.
Later on, Hofstede developed a fifth dimension, based on a
study among students in 23 countries:
Long-term
versus short-term orientation: Values
associated with Long Term Orientation are thrift and perseverance; values
associated with Short Term Orientation are respect for tradition, fulfilling
social obligations, and protecting one's 'face'. Both the positively and the
negatively rated values of this dimension are found in the teachings of
Confucius, the most influential Chinese philosopher who lived around 500 B.C.
However, the dimension also applies to countries without a Confucian heritage.
Although the model is concerned with “national” cultures,
Hofstede groups the countries into supranational cultural regions: “Power
distance scores are high for Latin, Asian and African countries and smaller for
Germanic countries. Individualism prevails in developed and Western countries,
while Collectivism prevails in less developed and Eastern countries; Japan
takes a middle position on this dimension. Masculinity is high in Japan, in
some European countries like Germany, Austria and Switzerland, and moderately
high in Anglo countries; it is low in Nordic countries and in the Netherlands
and moderately low in some Latin and Asian countries like France, Spain and
Thailand. Uncertainty avoidance scores are higher in Latin countries, in Japan,
and in German speaking countries, lower in Anglo, Nordic, and Chinese culture
countries. A Long Term Orientation is mostly found in East Asian countries” (www.geerthofstede.nl).
This grouping of country scores points in his opinion to the roots of cultural
differences that should be sought in the common history of similarly scoring
countries.
The Hofstede scores for his
five dimensions for the EU countries for which data are available are
reproduced in Table 2.
Table 2: Hofstede Cultural Dimension Scores
for EU Countries
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Country
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Power Distance
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Individualism
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Masculinity
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Uncertainty Avoidance
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Long-Term
Orientation
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Austria
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11
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55
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79
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70
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--
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Belgium
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65
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75
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54
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94
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--
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Bulgaria*
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70
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30
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40
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85
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--
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Czech Republic*
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57
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58
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57
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74
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13
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Denmark
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18
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74
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16
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23
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--
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Estonia*
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40
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60
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30
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60
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--
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Finland
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33
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63
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26
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59
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--
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France
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68
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71
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43
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86
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--
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West Germany
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35
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67
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66
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65
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31
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Greece
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60
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35
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57
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112
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--
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Hungary*
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46
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80
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88
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82
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50
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Ireland
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28
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70
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68
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35
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--
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Italy
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50
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76
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70
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75
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--
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Luxembourg*
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40
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60
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50
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70
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--
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Malta*
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56
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59
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47
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96
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--
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Netherlands
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38
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80
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14
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53
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44
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Norway
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31
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69
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8
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50
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20
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Poland*
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68
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60
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64
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93
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32
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Portugal
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63
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27
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31
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104
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--
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Romania*
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90
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30
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42
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90
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--
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Slovakia*
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104
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52
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110
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51
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38
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Spain
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57
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51
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42
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86
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--
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Sweden
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31
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71
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5
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29
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33
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U.K.
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35
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89
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66
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35
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25
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* = Values estimated by Hofstede; -- = not available
Brons (2006:550) critiques Hofstede on the grounds that
Hofstede regards his measurement as direct although in fact he based his
measurement not on actual behaviour but on what people said they would do. This
refers to the problem of measurement elaborated above: whether culture is best
measured against what people do or against what they think would be appropriate
to do. While Brons thinks that actual behaviour is more revealing, Rosenstiel
and Koch (2001:200) come to the conclusion that the correlations between values
and behaviour are weak because human behaviour is affected by many factors, of
which cultural values is just one.
Irrespective of criticism such as this, Hofstede’s indices
have proven to be valuable for explaining economic differences. Dieckmann
(1996) found a negative and significant correlation of uncertainty avoidance
with the growth rate of per capita income[1].
Another
widely used system for measurement of cultural differences between nations was
developed by Inglehart (1997) and builds on data from the World Value Survey[2]
(see box below). As opposed to Hofstede’s approach which is informed by
cultural theory and stress on path dependency, Inglehart is more indebted to
modernization theory, which argues that processes of economic and social
traditional family values,
and reject divorce, abortion, euthanasia, and suicide. These societies have
high levels of national pride, and a nationalistic outlook. Societies with
secular-rational values have the opposite preferences on all of these topics. 
The second major dimension
of cross-cultural variation is linked with the transition from industrial
society to post-industrial societies-which brings a polarization between
Survival and Self-expression values. The unprecedented wealth that has
accumulated in advanced societies during the past generation means that an
increasing share of the population has grown up taking survival for granted.
Thus, priorities have shifted from an overwhelming emphasis on economic and
physical security toward an increasing emphasis on subjective well-being,
self-expression and quality of life. Inglehart and Baker (2000) find evidence
that orientations have shifted from Traditional toward Secular-rational values,
in almost all industrial societies. But modernization, is not linear-when a
society has completed industrialization and starts becoming a knowledge
society, it moves in a new direction, from Survival values toward increasing
emphasis on Self-expression values.
A central component of this
emerging dimension involves the polarization between Materialist and
Postmaterialist values, reflecting a cultural shift that is emerging among
generations who have grown up taking survival for granted. Self-expression
values give high priority to environmental protection, tolerance of diversity
and rising demands for participation in decision making in economic and
political life. These values also reflect mass polarization over tolerance of
outgroups, including foreigners, gays and lesbians and gender equality. The
shift from survival values to self-expression values also includes a shift in
child-rearing values, from emphasis on hard work toward emphasis on imagination
and tolerance as important values to teach a child. And it goes with a rising
sense of subjective well-being that is conducive to an atmosphere of tolerance,
trust and political moderation. Finally, societies that rank high on
selfexpression values also tend to rank high on interpersonal trust.
This produces a culture of
trust and tolerance, in which people place a relatively high value on
individual freedom and self-expression, and have activist political
orientations. These are precisely the attributes that the political culture
literature defines as crucial to democracy.
Source: Inglehart
& Welzel (2005)
There are, of course, further sources for indices which
attempt to capture national differences in culture. For exsample, for his study
on the correlation between political culture and growth, Mauro (1995)
calculated indices from data sets on institutional performance such as those
produced by “Business International (BI)”. BI indices are available on (a)
efficiency of the judical system, (b) corruption, (c) red tape and (d)
political stability. The source of the data were expert assessments by BI’s
correspondents stationed in about 70 countries.
2.3 Culture and Innovation
Just as
culture is difficult to define, “culture of innovation” is also a multifaceted
term. Often used in terms of “business culture”, the following definition takes
a more general approach: In his essay on the theoretical background that could
be useful in enlightening the concept of “culture of innovation”, Wieland
(2004: 10) conceives culture of innovation as the institutions (norms, values,
formal and informal) that have a significant influence on how the actors
involved in an innovation process perceive economic and technical challenges
and that provides them with strategies to tackle these.
Herbig and Dunphy (1998:14) highlight the profound
significance of culture for the adoption of innovative technologies when they
hold that “existing cultural conditions determine whether, when, how and in
what form a new innovation will be adopted. If the behaviour, ideas and
material apparatus which must accompany the use of innovation can affect
improvements along lines already laid down in the culture, the possibilities of
acceptance are much greater.” They cite several previous studies[3]
that attribute higher innovation capacities to societies which are
characterized by:
Higher Individualism
Willingness to take risks
Readiness to Accept Change
Long-Term Orientation
Low on Power/Status/Hierarchy (Low Power Distance)
Weak Uncertainty Avoidance
Openness to New Information
Frequent Travel
Positive attitude Towards Science
Value of Education to Society (High Education Levels)
Early Adapters
(innovators ARE early adopters not so much the other way round) Religion (however, depending on which
religion, see below).
The authors stress the fact that most people work in hope of
reward. This is why class systems that freeze people in place will discourage
people to work hard or to innovate. The same holds true for a society in which
lack of trust in institutions prevails. This is because people have to be
persuaded that they can affect their destiny in order to become active and innovative
citizens (Herbig & Dunphy 1998:18). The existence of social capital, as
conceptualised by Coleman, should therefore be conductive to an innovative
climate.
The authors devote an entire chapter to the relationship
between religion and innovation, which they consider of special importance. In
their opinion the relatedness is twofold: On the one hand a strict segregation
of church and public affairs is regarded as being beneficial towards a
country’s innovative potential: They hold that often “where religious and
political systems are intertwined, definite cultural bias exists against
technology that might affect tradition.“ The Arab states, Ireland, Spain and
Latin American countries are cited as examples of these “usually
underdeveloped” societies where “more often than not, the educational level and
general intellectual environment […] is not conductive to innovation” (Herbig
and Dunphy 1998:20). On the other hand they judge the religious transcendence
of work inherent in Christian faiths – especially as to be found as part of the
protestant work ethic – as contributing to a country’s innovative capacity. In
the view of Lynn White, an medieval historian cited by them, the
Judeo-Christian belief that domination of nature is sanctioned by religion was essential
for the aggressive effort to exploit nature and to develop technology to its
full potential. In contrast Asian faiths such as Hinduism or Buddhism that aim
at the elimination of desires and are more benign towards nature are supposed
to provide less incentives to innovate. Islamic virtues and moral perceptions
are also seen as hindering innovations. Herbig and Dunphy hold that because in
Islamic cultures material advancement does not entail higher status or merit
and because innovation is considered to be the work of the devil the propensity
to innovate is low and fatalism is prevalent. This tendency is reinforced when
the ulama voice opposition to innovation and thus make any change a high-risk
project[4].
Figure 1 presents recent Eurobarometer data on the share of
the adult population who state that they “believe in God” or in another sort of
“spirit, God or life force”. The data indicate the degree of differences which
exist across EU25 countries.
Religious beliefs also differ, of course, within countries.
In a recent study using data from the European Value Studies, Beugelsdijk et
al. (2006: 324-325) found that – at least within Germany and the Netherlands –
“regional differences in terms of a Protestant ore a Catholic tradition are not
so strong to differ signifcantly from national characteristics once the latter is controlled” [emphasis
added]. The authors interprete their findings as supporting Inglehart &
Baker (2000:36) who suggest that “given religious traditions have historically
shaped the national culture of given societies, but that today their impact is
transmitted through nationwide institutions, to the population of that society
as a whole – even to those who have little or no contact with religious
institutions”. According to this view, religious beliefs today are of less
importance for economic development compared to those in the past, especially
if these have become deeply embedded in national/regional culture. 
The influence of culture on innovation has also been
explored by Shane (1993; 1995). His research suggests that rates of innovation
(measured as per capita number of trademarks) are predominately influenced by
weak uncertainty avoidance. This turned out to be a more important factor than
even per capita income. Weak power distance and strong individualism were also
shown to be related to innovation, if to a lesser extent. Shane (1995) also
analysed national differences in attitudes about the role of innovation
champions (“people who take personal risks to overcome resistance to innovative
ideas in established organisations”). He found a signifcant association between
national culture and national preferences for innovation championing
strategies: “It found that the more collectivist a society is, the more people
in it prefer champions to gather support for an innovative idea by making
cross-functional appeals for support from organization members. It also found
that the more uncertainty accepting a society is, the more people in it prefer
champions to overcome organizational inertia to innovation by violating
organizational norms, rules and procedures. Finally, it found that the more
power distant a society is, the more people in it prefer champions to make
those in authority the locus of support for efforts to overcome resistance to
innovative ideas.”
Research by Ulijn and Weggeman (2001) maps out a more
differentiated relationship between national culture and innovativeness. They
suggest that different types of corporate culture exist which – depending on
the overall national culture – might obtain equally good results concerning
economic growth and innovative capacity. Hence one has to keep in mind that
more than one satisfactory blend of cultural attributes can lead to innovation.
2.4 Culture and Entrepreneurship
2.4.1 Empirical Research
Hofstede claims that innovation is directly related to
entrepreneurship and that therefore cultural dimensions influencing innovation
will also set the background for entrepreneurial activities. Beugelsdijk
(2007:192) argues in the same vein that propensity for innovation and
propensity to entrepreneurship go hand-in-hand because in his opinion
entrepreneurship is not only associated with the formation of new firms, but
should also be understood in the sense of starting something new. This might
include innovative and enterprising behaviour inside already existing
organizations. He claims that since entrepreneurship is associated with
alertness, the finding of new product-market combinations and innovation,
“entrepreneurship, innovation and economic growth are logically linked through
the recognition and exploitation of opportunities in economic and social
areas”. Common sense supports the assumption that innovative cultures might
feature a high rate of entrepreneurship as well. The opposite though, might not
hold true. Hofstede et al (2004:195) find some evidence for their
dissatisfaction hypothesis which states that people less satisfied in life as a
whole show a higher degree of entrepreneurship. It remains questionable,
however, if the factors causing higher entrepreneurship that are cited by
Hofstede et al (societies with larger power distance, stronger uncertainty
avoidance, more bureaucracy, more corruption and relatively poor with people
less satisfied with democracy and society) really do provide a promotional
environment for innovation.
One of the factors that highly relates to entrepreneurship and innovation is Hofstede’s dimension of
“uncertainty avoidance”. It refers to the prerequisite for both, that is to be
willing to take a risk, and invest time and/or money in the face of
uncertainty. Wennekers et al (2007) looked into the presumed relationship
between uncertainty avoidance and the rate of business ownership across 21 OECD
countries. They differentiate between the effects of risk aversion on an
individual level and on the national level. While risk-averse individuals are
less likely to resort to entrepreneurial activities, the corresponding
relationship on a national scale is less clear-cut. There are two opposing
hypotheses: on the one hand that high uncertainty avoidance might inhibit entrepreneurship
and on the other hand that a high degree of uncertainty avoidance in the
overall society results in an restrictive working environment in existing
companies and organisation which in turn raises the incentive for
selfemployment. Both hypotheses are taken into account in Wennekers et al’s
quantitative analysis of statistical data for 21 one OECD countries form
1976-2004. One of the main outcomes is that there is evidence for a push effect
of high uncertainty avoidance on the rate of business ownership. However this
effect diminishes over time. This leads the authors to the presumption that in
the changing environment of an information economy that evolved during the last
years, low uncertainty avoidance acts as a growing pull factor toward entrepreneurship
and that thus both Baum’s push hypothesis for high uncertainty avoidance and
Shane’s pull hypothesis for low uncertainty avoidance might be equally valid
for the economies of today.
In a similar study of 27 countries world-wide, Uhlaner and Thurik
(2007) find a clearly negative relationship between the cultural dimension of
Post-Materialism as developed by Inglehart (1997) and entrepreneurial
activities.
Menzel et
al. (2006) carried out a comprehensive study of the literature on the influence
of national, corporate and professional culture on intrapreneurship, defined as
entrepreneurship within existing organizations and considered “an important
source of technical knowledge to develop radical innovation” within companies
(ibid.: 3). They suggest an ideal profile of intrapreneurship-supportive
culture” (see Figure 2) for which they use Hofstede’s five dimensions as well
as a new one called “open systems orientation”. This is “about the coexistence
of internal and external factors and sources of innovation along the whole
value chain: funding of innovation, idea generation, sourcing and sharing of
knowledge, joint development, marketing, and distribution” (cp. von Hippel
2005).
2.4.2
EU-Level Survey Research on Entrepreneurial
Attitudes 
A 2004 Eurobarometer survey can be used to obtain
comparative data about attitudes of the adult population towards
entrepreneurial behaviour.
Figure 3 presents data on
respondents’ preferred job status. For the EU on average the share of people
preferring employee status is similar to the share of people preferring to be
self-employed. Among the countries covered by TRANSFORM, there is a more
widespread preference for entrepreneurship in Spain (56%) and in Italy (55%),
while in Sweden (35%) and Slovakia (30%) a clear majority favours being
employee. In contrast to the results for the EU, the adult US population
appears more open-minded towards the possibility of being self-employed, with
61% preferring this option over being employed.
Figure 3: The result of
the question which kind of job would the respondents prefer if they could
Source: Flash Eurobarometer 160 (see TNS/EOS Gallup
2004a)
A more specific look at the
reasons for respondents’ preferences (Table 3) reveals that 30% of EU citizens
prefer the fixed income which comes with an employee status, even in Slovakia
its 55%. The stability of the employment is for 24% of the respondents
important, in Italy 48% and the reason of a not risky job for 21%, whereas in
Germany this was named with 47%. The same question asked in the USA had the
outcome that 16% would prefer the regular income but 28% the severity of
decision, which is stated in the European Union only with 6%.
Table 3: Main reasons for preferring
employee status (in %; multiple response)
|
|
DE
|
UK
|
IT
|
SK
|
PL
|
SE
|
ES
|
EU15
|
EU25
|
USA
|
|
Regular, fixed income vs
irregular, variable income
|
29
|
25
|
54
|
55
|
24
|
17
|
20
|
29
|
30
|
16
|
|
Stability of employment
|
13
|
29
|
48
|
29
|
23
|
18
|
23
|
23
|
24
|
10
|
|
Not as risky/ unfavourable economic climate
|
47
|
6
|
9
|
23
|
20
|
6
|
12
|
20
|
21
|
5
|
|
Severity of decision/ being
tied to business
|
10
|
9
|
1
|
4
|
4
|
5
|
10
|
6
|
6
|
28
|
Source: Flash Eurobarometer
160 (see TNS/EOS Gallup 2004a) Table 4: Main reasons for preferring
self-employed status (in %; multiple response)
|
|
DE
|
UK
|
IT
|
SK
|
PL
|
SE
|
ES
|
EU15
|
EU25
|
USA
|
|
Personal independence
|
85
|
81
|
80
|
64
|
66
|
75
|
66
|
79
|
77
|
21
|
|
Own environment
|
22
|
9
|
18
|
28
|
10
|
9
|
7
|
15
|
16
|
61
|
|
Better income prospects
|
27
|
23
|
17
|
43
|
27
|
6
|
14
|
20
|
23
|
9
|
|
A business opportunity
|
12
|
7
|
11
|
10
|
5
|
3
|
5
|
8
|
8
|
2
|
|
others
|
31
|
23
|
10
|
52
|
16
|
18
|
21
|
19
|
20
|
7
|
Source: Flash Eurobarometer 160 (see TNS/EOS Gallup
2004a)
Looking at the reasons for establishing an own business,
Table 4 shows that most self-employed state personal independence (77%) as the
main reason, which also includes self-fulfilment and focusing on an interesting
task. The possibility of achieving a higher income is mentioned by only 23% of
respondents. The country breakdown shows that German self-employed stated
“personal independence” most often (85%), compared to the U.K. (81%) and Italy
(80%). The possibility to achieve a higher income matters most for the
self-employed in Slovakia, where 43% state this factor as a main reason. A very
different result emerges from the US data, as here 61% of self-employed
respondents selected the possibility of creating their own working environment
as the most important reason for being self-employed[5].
57% of EU respondents have never thought about setting up an
own business (see Figure 4). EU countries with above average figures for this
question include Spain (70%), Sweden (64%), Italy (61%) and the United Kingdom
(59%). 16% of EU respondents state that they are currently thinking about
starting up a business – this share is considerably larger in the
post-Communist countries Poland (23%) and Slovakia (26%). In Germany, a
comparatively large share of respondents state they have once considered
becoming self-employed but have since given up on the idea (15%).
Compared to the EU picture, the results for the USA indicate
a higher propensity to consider becoming self-employed – more than one in four
are currently thinking about setting up an own business.
Source: Flash Eurobarometer 160 (see TNS/EOS Gallup
2004a)
In the literature there is an ongoing debate about the
extent to which the decision to start a business is mainly caused by push or
mainly caused by pull factors. A typical push factor would be unemployment,
while a typical pull factor would be the possibility for more
self-responsibility.
The Eurobarometer survey asked
those respondents who are either self-employed already or who are currently
taking steps to set up a business for their reasons for doing so (Figure 5). It
turns out that with 55% most of the respondents consider pull factors
(opportunity) as more important, while 32% rank push factors (necessity) as
more relevant. The percentage of respondents who see being selfemployed as an
opportunity is especially high in Sweden (78%) and the U.K. (67%). Only 13% of
the respondents in the USA started (or are about to start) a business out of
necessity, while 71% did/do so because they saw an opportunity.
2.4.3 EU-Level Survey Research on Attitudes towards Economic Globalisation
A 2003 Eurobarometer study assessed attitudes within the
EU15 about globalisation and economic competition.
According to the survey
(Figure 6), the majority of EU15 citizens (63%) are generally in favour of
globalisation, defined as the opening-up of economies resulting in worldwide
competition. The country breakdown shows that the highest shares of respondents
in favour of globalisation are to be found in Germany (71%) and Italy (67%),
while Spain has the lowest figure (51%). On average, nearly 30% are generally
opposed to globalisation.
Respondents were also asked if
globalisation in their opinion represents a good opportunity for domestic
companies (thanks to the opening-up of markets), or if it rather means a threat
to national employment and the country’s companies (Figure 7. Choosing between
these two propositions it turns out that most of EU15 respondents (56%)
consider globalisation to be an opportunity for national businesses rather than
a threat. Respondents from Sweden were most optimistic, with two in three
considering globalisation as an opportunity for their country.
Figure 7: Percentage of
the conclusion which propositions is closest to the opinion with regard to
Globalisation’s impact on
domestic employment is considered to be less positively (see Figure 8). With
52% more than every second Eu15 citizen sees globalisation as a threat to their
country’s employment. This view is especially widespread in Germany (63%).
Finally, the survey asked
whether respondents would see an intensitication of globalisation in the future
as being more or less advantageous for themselves and their families (Table
5). 
2.5 Culture and Technology Adoption
2.5.1 Empirical Research
Concerning the adoption of ICT as a specific segment of
innovation uptake, the importance of cultural factors is well recognized.
However, as Hasan and Ditsa (1999:5) discovered in their study of crosscultural
differences in ICT adoption, very little research has been undertaken to this
regard: “Of all the factors that must be considered in the adoption of
information technology, culture is probably the most difficult to isolate,
define and measure. Consequently the influence of local culture on the adoption
of computer-based information systems in organisations has not featured prominently
in the research literature.”
In their comparative study of the adoption of IT in
Australia, West Africa and the Middle East Hasan and Ditsa (1999) identified
eight cultural dimensions as potential factors influencing the uptake of IT:
Power Distance, Uncertainty Avoidance, Individualism/Collectivism,
Masculinity/Femininism, Time Orientation (derived from Hofstede),
Monochrony/Polychrony and Context (derived from Hall & Hall 1990) and
Polymorphic/ Monomorphic (derived from Bottger et al. 1985).
Hofstede’s cultural dimensions having been explained above,
the remaining factors are conceptualized as follows:
Monochrony and Polychrony describe attitudes
towards the use of time in performing task. Monochronous societies focus on
issues one at a time and emphasize procedures for task completion. Polychronous
societies perform activities in parallel and concentrate on task completion
rather than on procedures.
Context means the amount of information that
surrounds an event. In high context cultures little information is coded, most
is implied in the person itself while in low context cultures the mass of
information is in an explicit code.
Polymorphic and Monomorphic refers to the
influence of opinion leaders. In Monomorphic cultures the expertise of leaders
is supposed to span a wide range of issues, whereas in polymorphic cultures, a
leader’s scope is limited to his explicit area of expertise
Although referring to Hofstede’s dimensions of national
culture, the authors decided to base their research on a transnational scale of
cultural regions rather than limiting themselves to quite recent and often
arbitrarily designed borders of nation states.
The three regions included in
their study showed the characteristics depicted in Table 6.
Table 6: Key characteristics of
macro-regions studied by Hanan and Ditsa
|
|
Australia
|
West Africa
|
Middle East
|
|
Power
Distance
|
Low
|
High
|
High
|
|
Uncertainty Avoidance
|
Moderately Low
|
Low
|
High
|
|
Individualist
vs. Collectivist
|
Highly Individualistic
|
Highly Collective
|
Collective
|
|
Masculinity
vs. Femininism
|
Masculine
|
Feminine
|
Masculine
|
|
Time
Orientation
|
Long-term
|
Short-term
|
Short-term
|
|
Monochrony
vs. Polychrony
|
Poly
|
Mono
|
Mono
|
|
Context
|
Low
|
High
|
High
|
|
Polymorphic
vs. Monomorphic
|
Mono
|
Poly
|
Poly
|
Source: Hanan and Ditsa (1999:10)
Hasan and
Ditsa come to the conclusion that measured against the rate of uptake of new
technology per head of population, age of IT in use, courses related to IT as
indicators of IT uptake, West Africa shows a more favourable climate for IT
adoption than the Middle East. As the two societies score similarly with regard
to most cultural dimensions, the differing attitudes towards IT adoption are
most likely due to opposing degrees of Uncertainty Avoidance.
An overview summarizes the
influences of cultural factors on the adoption and use of IT for the three case
studies.
Table 7: Overview of influence of cultural
factors on adoption of IT in macro-regions studied by Hanan and Ditsa (1999)
|
|
Australia
|
West Africa
|
Middle
East
|
|
Power Distance
|
IT has
flourished in this low PD culture as networked organisations develop flatter
management structures
|
In this high PD culture, IT is often an imposition on
organisations from the top without taking advice from
IT staff
|
In this
high PD culture, governments want to
control IT and are concerned with its power to democratise society
|
|
Uncertainty
Avoidance
|
People are prepared to take
risks and ready to adopt new IT, resulting in successful innovation
|
Also
prepared to take risks but many unwise and risky projects are undertaken and
a lot of incomplete IT projects are observed
|
In this high UA culture, there is almost no R& D.
they accept only well established
IT
products from the developed world
|
|
Individualist
vs. Collectivist
|
The individualistic
characteristic of the culture is exemplified in the typical solitary image of
a computer programmer
|
Collective attitude towards
solving IT problems by teams of IT professionals.
Potential to produce good
IT solutions
|
Most IT projects initiated by people trained in the
West who have individualist skills, whereas locals usually prefer to work in
teams. Source of conflict in joint projects.
|
|
Masculinity
vs. Femininism
|
IT
development has been predominantly technical and male oriented. Women are
becoming more prominent as the number of less technical positions grows
|
Males and Female vie for
top jobs in IT industry. People are more interested in what the technology
can do rather than technical details
|
Most jobs in IT held by men, but IT provides jobs for
women. Welcomed by those
trying to
raise position of women, but seen as a threat in conservative circles
|
|
Time
Orientation
|
Most
organizations have a three to five year strategy and think reasonably long
term
|
Short-term planning is
prevalent, so that only results of today determine success and are rewarded
|
Management
want quick results and do not appreciate the time value of money. Many
organizations
retain inefficient manual systems
|
|
Monochrony
vs. Polychrony
|
Modern
interactive, multi-tasking systems encourage polychronous work and are
popular
|
IT
professionals prefer completing one job before taking another: a display of
monomchonous culture
|
Batch systems were readily adopted in the 60s and
70s and many have not been upgraded
|
|
Context
|
System
developers are good at low level development which requires detail and
abstraction
|
Interested
in getting a system in place without much attention to details
|
Seem to
prefer modern high level end-user development tools which suit a high context
culture better than traditional programming
|
|
Polymorphic
vs.
Monomorphic
|
IT management is separated from core business
resulting in problems of communication: a display of monomorphic culture
|
IT managers are expected to
have knowledge of every aspect of IT and the organization: display of
polymorphic culture
|
Managers are expected to deal with IT issues without
being trained in IT: a display of polymorphic culture
|
Source: Hanan and Ditsa (1999)
2.5.2 EU-Level Survey Research
In a 2005 Eurobarometer survey, a representative sample of
the EU25 adult population was asked about their views on technology. In
particular, the survey tried to explore the perceived effects of a number of
selected new technologies on quality of life in the next 20 years.
In general, a majority of EU25 respondents appear to think
positively about the effects of new technologies will have a positive effect on
our way of life. There are, however, significant differences between
technologies, and – to a lesser extent – also between EU countries.
The technologies covered were: Computers and Information
Technology, Biotechnology and genetic engineering, Space exploration, The
Internet, Nuclear energy for electricity production, Nanotechnology, Mobile
phones, New energy sources to power cars, Air transport, Military and security
equipment, High speed trains, Medicines and new medical technologies, High-tech
agriculture (Agriculture using new technologies), Energy saving measures in the
home.
Of these, nano-technology is
considered by fewest respondents of having a positive effect (48%), while the
six most frequently cited new technologies with positive effects are “medicines
and new medical technologies” (94%), “energy saving measures in the home”
(92%), “solar energy” (91%), “new energy sources to power cars” (90%),
computers and information technology” (87%) and “the Internet” (78%). A smaller
majority, one in three, believes that mobile phones will have a positive effect
in the next 20 years. 
Figure 9
shows differences between the EU countries covered by TRANSFORM with respect to
attitudes towards computers & IT, the Internet, and mobile phones. While
shares of respondents who think that computers will have significant positive
effects in the next 20 years are similar across all countries, there are
sizeable differences with respect to mobile phones: 80% of Italian and Polish
respondents expect positive effects from this technology, while the figures are
57% and 61% for Germany and the U.K., respectively.
The eUSER survey, which was conducted
in 2005 in ten EU Member States, included a set of questions on attitudes
towards technology. The survey used a representative sample of the total adult
population living in private households. The findings (see Table 9) indicate
considerable differences between the countries covered. Fore example, while in
Ireland 69% of the entire adult population state that they are interested in
new technologies, in France the figure is only 49% and in the Czech Republic
even lower (46%).
Table 9: Attitudes towards
new technologies in Europe 2005 (Share of responses “strongly agree” and
“agree”)
|
|
DE
|
FR
|
IT
|
DK
|
UK
|
IE
|
PL
|
HU
|
CZ
|
SI
|
Overall sample
|
|
I am interested in new technologies*
|
55%
|
49%
|
55%
|
55%
|
56%
|
69%
|
51%
|
61%
|
46%
|
60%
|
55%
|
|
Computers are intimidating to use*
|
14%
|
17%
|
15%
|
9%
|
21%
|
22%
|
34%
|
15%
|
11%
|
24%
|
18%
|
|
I enjoy using the Internet**
|
64%
|
70%
|
63%
|
69%
|
72%
|
70%
|
78%
|
79%
|
81%
|
56%
|
70%
|
|
I enjoy using the mobile phone***
|
42%
|
39%
|
42%
|
46%
|
46%
|
60%
|
72%
|
75%
|
61%
|
32%
|
50%
|
|
The Internet is very useful for my work**
|
55%
|
52%
|
52%
|
56%
|
56%
|
55%
|
87%
|
53%
|
67%
|
68%
|
59%
|
|
The Internet is very useful to me in private life**
|
54%
|
43%
|
30%
|
60%
|
64%
|
65%
|
57%
|
41%
|
59%
|
59%
|
54%
|
|
Keeping up with computer developments takes much
time*
|
58%
|
50%
|
51%
|
65%
|
47%
|
45%
|
42%
|
36%
|
53%
|
62%
|
51%
|
|
One
shouldn’t use Internet for everything because of security*
|
60%
|
56%
|
45%
|
58%
|
46%
|
48%
|
74%
|
45%
|
41%
|
26%
|
50%
|
Base: *Total
population 18+, ** Internet users 18+, *** Mobile phone users 18+ Data source:
eUSER 2005
3 Regional Differences in Innovation Culture
This chapter looks into what the research literature says
about the extent to which there are differences in innovation culture between
regions within a country.
Research concerned with regional cultural differences and
their impact on economic activities has been fairly limited. This is mainly due
to the problem that data is far more easily available on a national than on a
regional scale. In addition to that, in the case that data is indeed available
for administrative districts, these more often than not do not correspond to
cultural or functional entities.
This is why – in spite of a number of authors criticising
Hofstede on the grounds that he does not account for regional and subcultural
differences – there are few empirical studies pertaining to the impact of
regional cultures on innovation or economic activities in general.
Myers and Tan (2002:8) for example point to a profound
mismatch between the nation-state, which is a recent phenomenon, and dominant
culture, which in some cases has existed for thousands of years (cp.
Beugelsdijk et al. 2006). They further stress the fact that many nations are
comprised of more than one culture and/or many subcultures and call for a more
complex and multidimensional approach to the study of culture’s influence on
Information Systems. It is argued that culture has to be studied at
international, national, regional, business and organisational levels while
taking into consideration that these levels are often inter-connected and
intertwined. Another criticised aspect is that conceptions of national culture
view the human world as composed of separate, distinguishable entities and fail
to take account of recent anthropological conceptions of culture as contested,
temporal and emergent, being constantly interpreted and (re)produced. The
authors’ call for stronger theoretical approaches as well as for improvements
in the research methodologies is however not supplemented by an alternative
framework for such an encompassing analysis.
Beugelsdijk et al. (2006) in their study indeed found
“significant intra-country differences”. Examples include huge differences
along the Inglehart dimensions Traditional/rational and Survival/selfexpression
between North and South Italy, and also between Hamburg and Saarland in
Germany. Below, this research is being discussed first, before reviewing
additional research which was carried out at national level in selected
countries.
3.1 Multi-country Analysis
3.1.1 Western Europe
Beugelsdijk et al. (2006) look for associations between
cultural values and economic development in European regions. For this they
used NUTS-1 level data from the European Value Studies carried out in 1990 and
1999. NUTS-1 level data from this source is available for Belgium. France,
Germany, Italy, the Netherlands, Spain and the U.K. The authors applied
Inglehart’s cultural dimensions Traditional/rational and
Survival/self-expression as a conceptual framework for the study. Economic development
was measured by Gross Regional Product per head, for two poins in time
preceding the value measurements, namely 1977 and 1990.
Key findings include:
The level of economic development is
significantly correlated with differences in value systems. However, rather
than indicating a causal relationship between culture as the cause and economic
development as the result, the analysis suggests that value systems develop in
line with economic development. This would support the revised modernization theory
as promoted by Inglehart & Welzel (2005).
Religious heritage is also found to be
significantly associated with values systems, but this result only holds true
at the national level. Once nationality is controlled for, regional differences
in terms of a Protestant or a Catholic tradition are not significantly related
with values anymore.
Convergence of values as a result of an
economic catch-up growth of poorer regions – as suggested by development
theorists – is unlikely to occur in the short or medium term, if at all. “The
vision of the European Commission [...] in which there would be a reasonable
homogeneous regional social-economic structure across Europe and a shared
European value system is therefore not built on realistic accounts of the actual
cultural differences that exist in Europe”.
In a second study, Beugelsdijk and van Schaik (2006)
analysed differences in social capital across 54 NUTS-1 regions in Western
Europe, and explored whether there is a correlation between social capital and
economic development. The data sourced used, again, was the European Value
Studies (1990 data).
For quantifying social capital, the level of trust as
measured by the widely-used “generally speaking” question was used: “Generally
speaking, would you say that most people can be trusted, or that you cannot be
too careful in dealing with people?”. Scores very widely across Europe, within
as well as between countries. The authors did not find a correlation between
trust and Protestantism or religion in general, as suggested by some authors
(e.g. Knack & Keefer 1997). The other variable used to measure social
capital is membership in groups or networks, i.e. numbers of such organisations
which the respondent is member of. A difference is being made between active
and passive membership. The results indicate that “controlling for the initial
level of GRP per capita, social capital is significantly and positvely [...]
related to regional economic growth in the sample of 54 Western European
regions” (Beugelsdijk and van Schaik: 1061).
This supports findings from an
analysis by Lindner et al. (2005) using data from the EVS as well as other
sources (e.g. Eurobarometer). Figure 10 reproduces two graphical
representations of the EVS data on trust and civic engagment. In addition to
these indicators, Lindner et al. also explored association between GRP/head and
other social capital indicators, namely % reading newspaper daily, attachment
to town/village, attachment to region, stated political interest, political
discussion, openness to foreigners, and statements about the social being more
important than the economic. The explanatory power of all of these for
explaining differences in economic development were found to be very low,
though.
Figure 10: Regional differences in key
social capital indicatotrs
 |
 |
|
Membership in civic
organisations (EVS 1999/2000)
|
People who have trust in
other persons (EVS 1999/2000)
|
Source: Lindnder et al. 2005: 41-42.
3.1.2 German-French Border Region
Dörrenbacher and Schultz (2002) undertook an empirical study
on the Saar-Lorraine region. The cross-border regions of Saarland (Germany) and
Lorraine (France) feature many socio-economic similarities as both regions are
striving to overcome a legacy of early industrialisation. Common historic and
cultural bonds contribute to a common functional region on both sides of the
border. The workforce on both sides of the border is accustomed to industrial
employment, especially by large companies. It is characterised by a weak spirit
of enterprise and a culture of unemployment, which exerts a negative influence
on the development of a strong innovation culture. Dörrenbacher and Schulz
assume consequently that the regional innovation culture is very similar in
both regions irrespective of national borders and that one should look at
cultural, historic and functional entities instead. A deeper look into the
hypothesised cross-border production systems and cross-border corporate
cultures in the automobile industry however shows a quite differentiated and
contradictory picture. Notwithstanding the cultural similarities, there are
nearly no regional cross-border firm relationships. As the automobile industry
is heavily globalised, supplier branch plants are most often controlled from
outside and assembly plants are furnished by firms outside the Saar-Lorraine
region. Although in other areas cross-border linkages do exist, the production
systems of the two major assembly plants are hardly interlinked and more
embedded in the respective national and corporate culture than in the regional
culture. The socio-cultural embeddedness of firms and their respective culture
of innovation is – according to this study –
to be found in the conflicting context of regional culture, national
culture and the respective corporate culture which might be influenced itself
by transnational company structures.
3.2 Single-country Analysis
3.2.1 Netherlands
Brons (2006) provided one of the first attempts at a
quantitative measure of regional cultural differences. He assumes that different
culture – economy relationships exist on different spatial scales. Culture,
thus, can be measured indirectly for any territorial scale for which sufficient
behavioural data is available. In his case study of regional culture in the
Netherlands Brons (2006) included all except two of 489 Dutch municipalities.
He used all available data reflecting metabehaviour or culture for the period
from 1997-2003. The resulting 65 variables were grouped by means of a series of
factor analyses in order to find the meta-behavioural factors behind the
behavioural data. With regard to cross-cultural psychology, which defines
culture as a set of core values and as a sub-set of meta-behaviour, Brons
(2006:551) interprets the results of his factor analysis as core value dimensions. Based on previous
studies on national culture (see section 2.2), Brons selected seven dimensions
of interpretation: individualism-collectivism, power distance,
masculine-feminine values, uncertainty avoidance, conservatism,
post-materialism and dissatisfaction.
A final principal component analysis revealed that in the
Netherlands, the cultural dimensions most relevant to regional cultural
difference are, in descending order: post-materialism, protestant conservatism,
classical individualism, egalitarian anti-conservatism and dissatisfaction.
Concerning these five cultural dimensions, Brons was able to identify
significant regional differences. However he points to the fact that it is not
clear whether the spatial differences are due to differences in regional
culture or rather the result of socio-economic and cultural differences that
only happen to be regionally unevenly distributed. According to him
post-materialism, for example, seems to be much more an effect of urbanisation,
low income and education than of an historical cultural regional pattern. Brons
comes to the conclusion that whatever the source of meta behaviour or cultural
differences, they determine behaviour so that the collected data can be used in
empirical analyses of economical and or sociological phenomena. Multiple
regression for example shows that for the Dutch municipalities protestant
conservatism and dissatisfaction as well as post-materialism (controlled for
urbanisation, income and education) positively influence entrepreneurship.
3.2.2 USA
One of the first to demonstrate explicitly the importance of
cultural factors for industrial adaptation was Saxenian (1994). Her comparison
between the Boston route 128 and the silicon valley however did not establish
any causal link between culture and industrial adoption, nor did she actually
measure cultural influence (James 2005: 1198-1199).
James (2005:1198) points to one of the most immanent
problems of the research into the relationship between regional economy,
innovation and culture, when he criticises that “while the formal “hard”
institutions that underpin innovative regional economies are relatively well
theorized, their cultural basis are still not fully understood. While many
accounts are typically suggestive of something intangible that permits
innovation to proceed in some places but not in others, they often fail to
specify the exact nature of these “mysterious” processes through which regional
cultures promote innovative activity more successfully in some regions than in
others.”
In his research James focuses
on the high-tech industrial agglomeration in Salt Lake City which is embedded
in Mormonism as a highly visible regional culture whose ideologies are written
down and easily accessible. He argues that a firm’s cultural embeddedness is
best understood in terms of tensions between regional self-identity imported
into the firm versus key elements of corporate cultures that have been shown in
the regional learning literature as being central to firms’ abilities to innovate.
Drawing on the multi-tiered
conception of culture used in the organizational studies literature (see Figure
11), James sets up a regional culture hierarchy made up of a) individual
corporate culture, b) regional industrial culture and c) the broader regional
culture. He argues that regional cultural systems of collective beliefs and
conventions are imported into the firms’ cultural cores and hence shape firms’
systems of organizational control (middle layer). On the outer layer,
regionally culturally inflected patterns of corporate behaviour become
observable. 
Using both an extensive quantitative survey and qualitative
in-depth interviews, James (2005:1204) was able to highlight four main traits
of Mormon regional culture which are at odds with regional cultural traits
usually attributed to high innovative capacity:
Unity and mutual trust versus interfirm networking and studied
trust;
self-sufficiency and autonomy versus
outsourcing and exploitation of other firms’ competences; debt
avoidance versus venture capital sought;
family (than church) above all
versus “sleeping bags under the desk” and afterwork socialising.
The last point is especially interesting as it demonstrates
that social capital and networking can be used in very different ways with
differing impacts on innovative capacity. While the Mormons’ strong bonding
relations whose focus lay outside the working place seem to inhibit long
working hours and limit the possible output, well developed bridging capital
between different firms and strong inter-firm relations are thought to further
economic success and innovative potential.
As to innovations, James (2003:284) observes that: “The use
of information to generate new knowledge crucially depends on interactions
between different actors with different ideas, methods of approach and
viewpoints whose interactions around work problems will often generate new and
unexpected ideas or synergies. The import of cultural attitudes of respect for
authority, established ideas and non-confrontation, along with limited
workforce diversity, therefore constrains firms’ abilities to use new
information in this way. Thus, while in some cases, firms’ import of regional
cultural traits enhances and reinforces their innovative capacities, in other
cases it potentially constrains them. Crucially, both enablers and constraints
on firms’ innovative capacities stem from the same regional culture in which
they are embedded.”
It is important to note that neither culture nor cultural
embeddedness remain constant over time. James (2003:285) noted two relevant
mechanisms for cultural embeddedness: “key individuals” who have a strong
influence on corporate culture and “strength in numbers” which refers to the
fact that culturally-inspired decisions have to be accepted and ratified by a
majority of the workforce. He holds that depending on the relative balance of
these two key mechanisms of embedding, firms’ import of regional cultural
values is subject to change, most likely decreasing over time while the firm
itself is growing.
Concerning policy implications James (2006:1212) raises the
following research questions:
When firms’ corporate cultures are embedded in
strong regional culture, to what extend is it possible to realign those
corporate cultures in line with policy prescriptions?
What policy levers might be working?
Over what time scales might such changes be feasible?
How should policy measures vary across
national economies with different mosaics of regional cultures embedded within
each?
He points to the fact that the “right” mix of formal
institutions is not sufficient for a successful cluster policy. Without an
understanding of the culture that underpins a (successful) regional industrial
system it will stay highly problematic to try and take what works in one region
and implement it in a different regional cultural context (2003:286). However
an integration of cultural concepts into innovation and cluster policy will
only be feasible once regional culture gets better conceptualised and
empirically verified (James 2006:1198).
3.2.3 Germany
Proff (2007) in her essay on product innovations and
cultural diversity inquires into the reasons for regional differences in
innovation culture. She regards differing historical, political and economic
developments as having some kind of influence on the development of a specific
regional culture. Although all of these aspects play a role in determining
regional innovative capacity[6],
according to her the key factor is to be found in differences in regional
cultural diversity. The term “cultural diversity” is employed by the author in
a very precise way meaning “business culture diversity”. This cultural
diversity can be traced back to:
different
industrial cultures (due to divergent resources or technologies); diversity
of professions, educational, vocational training and socialisation;
diversity
of corporate cultures due to founders’ strong personalities (e.g. in Germany
Krupp, Thyssen).
The study focuses on the level of business management, but
since a region’s innovative potential depends heavily on that of its
enterprises, the findings might also be illuminating at regional level. The
author cautions, however, that the link between regional and national cultures
has always to be taken into account. Regional cultures are always embedded into
a national (innovation) culture that plays a role in reinforcing or inhibiting
product innovations. This is why regional cultural diversity can only claim to
be a necessary but not sufficient condition for product innovations. She cites
Germany as an example for an innovation-averse national culture as surveys in
Germany often register a prevailing innovation-hostile mood (e.g.
McKinsey&Company 2005); wide-spread anguishes concerning the future and
changes in general; and scepticism in face of high-risk new technologies. Low
flexibility and risk aversion of the German population are often deplored as
limiting the innovative potential.
Mathiesen (2007:116) however argues that there is no
abstract measure of heterogeneity that could guarantee innovation processes. He
insists that the relationship between heterogeneity and innovation can only be
discovered on a case-by-case basis. His case studies of knowledge milieus in
several East German regions are based on a concept of “knowledge cultures”. The
author distinguishes between “soft networks” (milieus of knowledge) and “hard
networks” (strategic and formally institutionalized networks of knowledge and
innovation). These networks constitute cultures of knowledge which in turn
shape a region’s knowledge habitus. As far as creative processes and
innovations are concerned, the embedding “soft networks” characterized by
strong interior communication flows, high potentials for self-organization and
innate development dynamics are of special importance. This interesting
theoretical background turns out to be quite difficult to translate into robust
case studies as knowledge milieus are difficult to trace. In his description of
knowledge milieus in East Germany, Matthiesen’s analysis therefore concentrates
mainly on “hard” institutions, supplemented by research on prevailing
self-images of the cities studied.
Concerning East Germany in general Matthiesen (2007:96)
discerns an ongoing process of hybridization: the dynamics of a developing
knowledge culture transform – but do not erase – the heritage of socialism and
“east-Fordist” monostructures that shaped mental, cultural and social traits as
well as the innovation climate. An important factor for the transformation of a
regional knowledge and innovation culture seems to be migration. Matthiesen
developed the term “space pioneer” to describe people who bring heterogeneity
to homogenous and vacating regions and thus initiative a sort of
“gentrification process” on a regional scale that facilitates development and
innovation. This relates to recent research by Niebuhr (2006) who investigated
the effect of cultural diversity of the workforce (defined as workers’
nationality) on innovaton output for a cross-section of German regions. She
found that “differences in knowledge and capabilities of workers from diverse
cultural backgrounds enhance performance of regional R&D sectors”. However,
while diversity in Germany is highest among low-skilled employees who have no
formal vocational qualifications, the strongest positive impact on innovation
output was found for diversity among qualified employees.
Entrepreneurial activities and its conditions have been
researched exhaustively. According to the definition of “national innovation
culture” underlying the current study, attitudes towards entrepreneurship are
considered to be one aspect of innovation culture. A positive entrepreneurial
attitude might therefore be used as a proxy for a low degree of risk aversion
which is one of the predispositions for innovation processes. Some authors
state that not only entrepreneurial attitudes but also the number of newly
established enterprises are positively related to innovation occurrence. Grotz
and Brixy (2005:150) indicate that in sluggish economic situations newly
established business are seen as a source of innovation and an engine of
economic growth.
In the case of Germany the spatial distribution pattern of
new business formation remains highly stable over time (Grotz and Brixy
2005:151). These regional differences in business formation can be explained by
economic and structural factors and a certain path dependency on the one hand
and personal characteristics of business founders on the other hand.
Entrepreneurs show typical characteristics concerning age, gender, education,
socio-cultural environment, readiness to take risk and willingness to perform.
Concerning the aforementioned attitudes towards risk and entrepreneurship
Bergmann (2005) detected considerable differences between 10 German Regions (Raumordungsregionen). In his empirical
study Bergmann looked into the determinants for positive or negative
entrepreneurial attitudes – a factor very rarely accounted for in previous
publications. Bergmann holds that cultural traits of regions cannot be measured
directly. He suggests to treat cultural influence on entrepreneurial attitude
as a residual category: a significant regional influence on entrepreneurial
attitudes, which cannot be explained by personal characteristics or the
regional economic and socio-demographic structure, is supposed to be a clue to
differences in culture and mentality. In this respect he considers the
difference in risk aversion between the different regions, especially the East
and West German regions to be significant. According to Bergmann (2005:196)
this points to a difference in mentality which exterts an influences on the
scope of entrepreneurial activities[7].
One of the few studies dealing with cultural differences
between (West) German regions was carried out by Miegel (1991). His comparison
between 26 rural districts (Landkreise) with strong and weak employment
indicators looked into differences in economic culture and work culture as
non-economic factors influencing employment. The author points out that
previously the relationship between attitudes and economy had hardly ever been
examined as the economics literature more often than not considers this subject
to be off-limits (ibid.:115). In a survey asking for opinions on typical
features of the local population (self-image and values), on prerequisites of
success and on the significance of gainful employment (importance attributed to
career and job performance) the two groups of districts in Germany showed
several significant variations. In an overall view however the variations
remained relatively small in scale. Miegel (ibid.:92) attributes this fact to a
very homogenous society that results in a homogenous national economic culture
which is only slightly modified by regional differences. Although the economic
situation differs substantially between the strong and weak districts, the
survey reveals very similar degrees of satisfaction. This is interpreted as a
proof for differing mental sets: while for example in some regions people are
satisfied with less income and more free time/social activities, elsewhere
career and income are seen as priorities and contribute to the well-being.
The author supposes that the reasons for differing
(economical) attitudes and behaviors can be found in different geographical and
historical backgrounds. Although little evidence for purely geographical
influence on economic attitudes is to be found, Miegel (1991:97) suggests that
a region’s endowment with natural resources might influence the development of
a specific economic culture. A barren region where mining is more auspicious than
agriculture might turn more easily towards the use of technology and might
retain a certain openness towards technology and innovation[8]. As
for historical developments, there were some kinds of influences to be found.
Most of the “strong” districts were historically characterized by a strong
influence of religion and church, which might have helped to transcend the
importance and value of labour. The two contrasting types of heritage law in
Germany – inheritance by real estate divestiture versus the single heir rule –
might also have played a role: in regions characterized by the single heir rule
farms remained prosperous and population stagnant as the non-inheriting
children most often stayed on the farm as they were not able to nourish a
family of their own. In regions with real estate divestiture the inherited
parts got smaller from generation to generation so that the heirs soon could
not make a living off their land any more. As most children founded families
the population growth contributed to the necessity to look out for different
income solutions which might have contributed to more individualistic and
capitalistic patterns of behavior.
Miegel (2007:103) also noted probably relevant differences
in historical governance structures between strong and weak district. A
disproportionately large number of strong districts belonged to the small
German states, where economy and politics used to be highly interwoven and the
government was interested in activating the entire economic capacity of the mini-state
in question. By contrast many of the weak districts could be found on the
periphery of the former big and highly centralized state of Prussia. Most of
the weak districts were situated remote from trade centers and routes. The
author (ibid.:104) assumes that trading activities fostered attitudes and
mindsets that turned out to be well-adapted to a modern industrial society.
Concerning current influences on regional economic cultures, Miegel (2007:105)
points to the importance of migration. The “strong” districts integrated far
more refugees and displaced persons than the “weak” ones which might be an
indicator for the higher integrative capacity. On the other hand the migrants
brought with them different attitudes and mindsets that influenced the self-image
of the residents and contributed to cultural diversity.
Finally, the author comes to the same conclusion as James: a
more socially oriented and caring type of local society will concede less
importance to career-based thinking and will in consequence bestow less effort
and time on their workplace. This in turn sets firm limits to economic success
and growth. Work cultures that are strongly oriented towards labor based income
however are more disposed towards innovation and investments as in these types
of culture risk and sacrifice are not balked at and a higher degree of
mobility, flexibility and openness towards technical innovations is to be
found. Miegel suggests that a high degree of propensity to innovation and
investment will help to increase productivity and competitiveness whereby the
GDP and the labor market will be influenced in a positive manner.
Based on Miegel’s research in West Germany, Müller-Syring
(1994) undertook a similar study on the economic culture of the East German
federal state of Saxony. The comparability of the research results with
Miegel’s findings is assured by the use of the same questionnaire and the same
regional level of administrative districts. Müller-Syring’s research tries to
answer the question if the economic culture in Saxony has been significantly
influenced by the state-commanded economy. If so, are the influences only short
term or will they stay inscribed for a long time and thus influence on the
adoption of market economy?
The impact chain that determines economic culture is
conceptualised as follows: long-term,
enduring and contemporary influences result in certain ways of thinking and set of minds. These influence on attitudes relevant for economy and work
and vice-versa. The attitudes and dispositions are engraved in an overall economic and labour culture. This
economic culture determines economic
activities and their expression. These activities in turn feedback on the
economic culture as well as on economic attitudes and might also modify
contemporary or future influencing factors.
The Saxon attitude concerning economy and work as presented
by Müller-Syring (1994:16-60) features several significant deviations from the
average West-German pattern of attitudes. Two main – and quite contradictory –
characteristics are (a) high commitment to performance as well as (b) an only
marginal belief in their ability to decide on how to shape their lives which
goes along with (c) a relatively high degree of risk aversion. The answers on
questions relating to work ethos back up this ambivalence: while Saxons accept
more easily than the average West-German to work hard in order to succeed, they
are less inclined to take responsibilities, to make decisions by themselves or
to impose themselves when things get difficult. Müller-Syring attributes these
last features to the Saxon’s experience with a planned economy and dictatorial
political system in which there was no place for individual decisions and
responsibilities.
Concerning labour force behaviour, the study’s results are
congruent with those concerning social attitudes. The population shows a higher
degree of value orientation towards work and employment than most West-Germans.
Müller-Syring explains this with the high importance that socialism attributed
to each and everyone’s work. In contrast to West Germany, where leisure time
evolved as a second pole around which one’s life could be centred, in the
socialist East German states work and merit remained essential for the
significance of life. Thus the author considers the differences between East
and West-Germany regarding work ethos as quite natural. He is more surprised by
the fact that both positions seem to converge more and more: for example while
East-Germans today regard a pay rise as the most important incentive, they
consider that in 10 years time, once the salaries are adjusted to the higher
western level, they would favour an increase in leisure time as an incentive,
just as today do a majority of West Germans. However, in this domain as well,
the Saxons’ profile remains ambivalent. They combine success-orientation with a
high degree of commitment towards their community and favour collectivism.
Müller-Syring traces these features back to the difficult economic situation in
the former GDR, where self-organisation of groups of neighbours and friends
were a necessity.
As far as the historical and long-lasting influences are
concerned, Müller-Syring finds some clues as to how the specific economic
culture in Saxony might have developed. Throughout the history the region has
been relatively densely populated featuring very early a high degree of
urbanization. This meant that a large part of the population was not
subordinated to feudalism but was used instead to a certain degree of
self-organization. During the 16th century, the bourgeoisie of the
townships and the sovereign started to cooperate in order to fend off the
common danger of petty-princes and robberknights vying for power and wealth.
This cooperation was of great value for commerce and economic development since
the sovereign patronized innovations and subsidized certain enterprises that he
considered of a importance. The bourgeoisie in turn provided the government
with economic knowhow. Saxony was an important trade center and its flourishing
economy provided an incentive for immigrants who contributed to a high degree
of cultural diversity. The endowment of diverse natural resource was propitious
to an early economic diversification as well. The economic landscape was
characterized significantly by the mining industry. Miners were not – as common
elsewhere – landlords whose serfs did the work. Instead miners were free men
who were often organized in cooperatives, thus developing deep-seated sense of
entrepreneurship which resulted in the early advent of industrialization in
this region. In the rural areas the lack of large land holdings and the
prevailing heritage system by real estate divestiture contributed to the
development of a sense of individual economic responsibility. Protestantism,
originating in Saxony, strongly influenced the Saxon work ethic and explains
both the orientation towards achievements as well as the importance that Saxons
attribute to the community and community services.
More current influences on work attitudes are to be found in
the migration movements since the Second World War as well as in the economic
and political system of the German Democratic Republic. While the inflow of
refugees in the aftermath of the Second World War reinforced the workforce’s
work experience and performance-orientation, the exodus of motivated and
well-educated professionals from the GDP to the FRG weakened the spirit of
enterprise and competition. The economic isolation, nationalization, as well as
the mergers and concentration tendencies in the GDP entailed a fundamental
change of the economic structure in Saxony. Constantly inadequate supplies
impeded any benefit from the still substantial potential for innovation. The
centrally planned economy restrained creativity, initiative and assertiveness.
However, the dysfunctional economic system forced Saxons to develop a
“chaos-qualification” – i.e., to find ways and means to uphold production under
averse circumstances. While the socialist system welcomed and promoted the
prevailing work ethic, the Saxons’ traditional performance orientation was
considered more a danger than an asset. The existing high degree of
competitiveness was to an even larger extent considered undesirable and
suppressed. The historically strong group orientation however was further
reinforced by the necessity to cooperate and through the group-specific
privileges that were accorded to the workforce employed in the large textile
conglomerates as well as in the mining industry.
Today the Saxons’ economic and social profile displays
historically anchored positive work attitudes that underwent some modifications
due to the economic and political system of the GDP. According to the survey
conducted by Müller-Syring this specific work mentality differs considerably
from WestGerman attitudes. The question if this mentality will remain unchanged
or adapt to West-German values could not be answered at the time of the study,
although Müller-Syring projects the strong work orientation to prevail and thus
to provide auspicious investment opportunities. However he advises investors to
take account of the Saxon work mentality which will prove more beneficial in an
economic environment characterized by Small and Medium Enterprises and
organizational structures based on team work.
3.2.4 Italy
The significant regional differences in economic structure
and development in Italy have incited a number of researchers to look for the
reasons for such an uneven development. Some of these studies took cultural as
well as economic factors into account.
One type of approach is based on the (german) research
school concerned with “economic style analysis”. Economic style analysis
describes and analyses how economic transactions are organised and enacted in
different ways in different countries. Although economic style analysis is
usually concerned with national differences, Stemmermann (1996), in his
analysis of the Italian economic culture, discerns substantial regional
differences that prompt him to use „(regional) economic style zones“ as units
of research instead. He defines an “economic style zone” as a region that is
part of a national economy and that disposes of specific functional and
coordinative mechanisms that are however integrated into the national economic
system. In Italy the regionally different pathways of political, economic and
social development contributed to the evolution of four regional economic
styles: Northeast, Northwest, South and Rome. Three of them were already
inscribed in the political tripartition of the Italian peninsula from the 13th
century onwards: the papal state of Rome, the host of small independent and
city states in the North of Italy and finally the kingdom of Naples in South
Italy. In the North the eastern and western region underwent differing economic
developments. The Northwest which in the 1950s and 60s was characterized by
heavy industrialization is called “First Italy” in contrast to the rural and
little industrialized south, the “Second Italy”. The Northeast, the “Third
Italy” industrialized slightly later, in the 60s and 70s and in very particular
way. Its economic structure is characterized by a host of networks of SME’s,
the majority of whom belong to the manufacturing sector. Stemmerman gives the
following explanative factors for the development of this flexible local
production system characterized by competition and cooperation: first of all
the communist and catholic or Christian Democratic subcultures that account for
strong local ties and a well developed civil society. Furthermore he also
points to the historically developed strong urban-rural relationships. He holds
that many of today’s networks are built upon the historically developed and
tightly woven network of cities. Last of all the tenure system of mezzadria is
mentioned, according to which the tenant used to be part owner of the livestock
and thus was actively involved in and responsible for the farm management. This
might have contributed to the very early development of an entrepreneurial work
ethos.
In contrast to the network structure in the northeast, the
nortwestern “First Italy” is characterized by few but big urban centres of mass
production. Established in the mid 20th century, they focused on international
markets and were quick to take up new technologies and innovations. This structure
facilitated an economic growth miracle during the 50s and 60s, but at the same
time the social fabric was heavily affected: internal migration of low-wage
workers from the south, radicalisation of the workforce and fundamental
restructuring of social and political organisations and institutions gave rise
to a heavily fractured society.
According to Stemmerman the rural south, the “Second Italy”
is to be classified as a “marginal economy”. This region, where nearly no
important, independent cities developed and which remained influenced by feudal
structures until the recent past, shows a lagging economic development until
today. The unsuccessful interventions by the national state administration
since the 1950s only contributed to a “development without autonomy”. The
transfers of national funds contributed to an economic style based on
“political entrepreneurship” with economic actors depending highly on political
protection. A climate of clientelism developed where personal ties are
exploited in order to obtain (public) favours and benefits and the preference
for employment in the public sector is prevalent. Finally the mafia emerged as
a major economic actor, a fact whose consequences are wellknown.
Rome as the last “economic style zone” aims at balancing the
different regional interests. The local economy is characterised by its central
function for the entire nation and by the state functioning as one of the major
economic actors.
A more general picture of the different economic and
political development of north and south Italy is to be found in Putnam’s 1993
work “Making democracy work. Civic traditions in Modern Italy”. He saw the main
difference between the two regions in their differing degree of “civicness”,
the lack of which in his opinion caused the underdevelopment of the Italian
south. In his perception of social capital strong bonding ties towards family
and/or church organisations (as those existing in South Italy) are not supposed
to show positive effects on democratic institutions and development.
Boschma (2005) tried to analyse the role of social capital
in the specific industrial development of the Third Italy. Instead of
associating social capital with economic growth in general, as Putnam did,
Boschma presumes that social capital has been especially beneficial in view of
the development of the industrial districts made up of flexible networks of
SME’s that contributed to the successful development and economic growth of the
Third Italy during the last decades. The special efficiency of the local
networks is explained in terms of a combination of competition (stimulating
innovation), specialisation (enhancing productivity) and cooperation between
local actors (minimising uncertainty and opportunism, while stimulating
transfer of knowledge). The high degree of flexibility inherent in this type of
organisational structure turned out to be especially well suited for the
differentiation of demand since the 1970s, thus enabling considerable economic
growth rates.
Norms of
mutual trust, that are thought to boost economic development, exist in the
region of the Third Italy not only on the small-scale level of industrial
districts, but on a larger scale as well. Here
Boschma refers to the deeply rooted and cohesive political
subcultures (either Communist or Catholic/Christian Democrat), which reflect a
fine balance between the state and civil society that enhanced effectiveness
and credibility of institutions of governance. Boschma concludes that social
capital and norms of mutual trust act as mechanisms that overcome market
failures which arise because of uncertainty. This is why social capital
contributed to the rise of the Third Italy by 1. lowering the cost of
coordination between smaller firms, 2. encouraging cooperation mechanisms that are
vital for competitiveness of small firms, 3. favouring the transmission of
knowledge at district level which is essential for small firms to be able to
learn and innovate. The existence of the two strongly developed political
subcultures fostered the flexibility of the labour market because it regulated
potential social conflicts and provided for a high rate of social mobility and
put a limit on class polarisation.
Burroni, who, on an even smaller scale of analysis, looked
into different patterns of local development within the Third Italy noted the
importance of institutional factors and politics for regional economic
development. His research shows that within a region characterised by a
relatively homogenous economic culture, the economic development can still be
influenced in different ways through political and structural factors.
3.2.5 England
The theme of industrial and innovation culture in the UK has
been the topic of several books (Edgerton and Economic History Society 1996,
Ingham 1984, Wiener 1985), although no consensual conclusions have been
reached. According to Ingham and Wiener (Ingham 1984, Wiener 1985) there has
been, especially since the late XIX century, a disconnect between industry life
and the interests of the British elite. Wiener describes how the aristocracy in
the UK was able to absorb the emerging bourgeoisie, by inducing them to adopt
the former’s lifestyle. This allowed the British aristocracy to maintain its
political clout by hindering the emergence of a fully developed capitalist
culture, valuing capital accumulation and innovation.
This absorption happened in several ways: on the one hand
the aristocracy diversified its investments to the industrial sector, therefore
linking itself to the bourgeoisie on an economic basis; it also included
accepting many nouveau-riche into its ranks, often through marriage
arrangements; but crucially by allowing the sons of industry businessman to
attend the elitist ‘public schools’. In these schools the education was
essentially classical, and new subjects such as science were not taught as they
were seen as undignified. Also, and connecting to current debates about the
interaction between Universities and the private sector, the same culture
predominated at the higher level of education, where the utilization of
scientific knowledge to develop new commercial applications was never
considered as something worthy. Therefore when the potential heirs to the big
industrial groups become adults they had, through formation and socialization,
acquired the tastes of the aristocracy, where practical work that involved
dealing with money was disdained and a more rural and conservative lifestyle
was valued. Ingham (1984) argues that this absorption prevented the same kind
of social revolution that happened in Germany or France, where the bourgeoisie
destroyed (often through violence) the existing social structures to install in
its place a structure more akin to an industrial society. This had an impact in
the entire institutional framework regulating society, such as government
policy, school curriculums, relations between banks and industry or the
functioning of business associations.
Wiener (1985) while putting forward a similar argument
focuses more specifically on how this had an impact on the divergent interests
of the City (the financial centre of London) and the industrial sector in
England. According to his argument the financial sector in England was from an
early stage outward looking, especially as the existence of the English Empire
allowed it to have a crucial role on world trade. This was also accompanied by
a political action that promoted the British pound worldwide (for many years
the Sterling was the standard regulating currencies). These policies also had
(and still have) an implication inside Britain, as the maintenance of a strong
pound to serve the interests of the financial firms in the city hurts British
industry’s exports.
According to Wiener (1985) the fact that the City had from
the beginning a certain degree of independence from the internal industrial
sector (as it was mainly oriented to being the intermediary in international
trade) together with the disdain of high society for industrial activity, led
the City agents to distance themselves even further from industry when the
latter started its process of decline, towards the end of the XIX century.
Therefore, the conclusion of both Ingham and Wiener (Ingham 1984, Wiener 1985)
is that even though England led the industrial revolution in the XVII and XVIII
centuries, through a series of technological breakthroughs, it was not able to
maintain its position due to a disconnection between the elite governing the
country (and eventually the financial sector in London) and its industrial
sector. This explains, according to the same authors, the poor performance of
England in terms of innovation and consequentially its continuing industrial
decline.
This thesis has been however challenged by authors such as
Edgerton (1996). He argues that much of the literature criticizing the alleged
anti-industrial culture in England is based on a flawed argument: that British
industry has been declining. This decline is measured by the diminishing
importance of British industrial output worldwide, as measured by its
proportion of total production, and also by annual growth rates. This
measurement is however incorrect, because in fact British industry has
continued to expand its productive capacity and its exports. What happened
instead was that other countries who were lagging behind in the XIX century,
such as Germany or France, accelerated their pace of growth in the XX century.
This means that there was no absolute British decline but rather a catching up
from other countries that diminished the weight of the former’s production
worldwide, even though it kept increasing throughout the XX century.
In what regards the low rates of investment in science and
technology (S&E), Edgerton again criticizes the methodologies that have
been used to measure this investment. First because much of the discussion
relies on the testimony of scientists, engineers and industrialists, whose
hidden agendas (such as the intent of putting pressure on government to
increase public investment in these areas) renders their opinions questionable.
For instance, Edgerton (1996) remembers that complaints about lack of funding
were often stronger during periods of rapid increase in spending. But more
important is the conflation between S&E and innovation that is frequently
found in the literature, when in fact the relation between both is very
complex. For instance, Edgerton noticed that in the 60’s Britain had a higher
level of R&D spending than Japan but it had lower growth rates.
Additionally many of the authors who have criticized the British decline argued
that the country had no proper training institutions for Engineers. However
such a statement is usually made in comparison with the German case, where
several schools were created during the XX century, specifically dedicated to
this type of training. In Britain however, the training of engineers was done
at Universities because educationists in this country thought that it would be
more appropriate to have multi-faculty Universities. And in fact, according to
Edgerton’s (1996) comparison with the USA, Germany, France, Japan and Italy in
terms of the provision of engineering graduates Britain indeed lagged behind
some countries in the beginning of the XX century, but this was not the case by
the 1960s. And Germany productivity only surpassed the British in the 1960s.
Overall what Edgerton (1996) argues is that it is wrong to
establish direct relations between factors that are probably related but not in
a linear way. Therefore it is incorrect to draw a direct line between a certain
type of culture and innovation and indeed between innovation and growth. These
are complex and multidimensional factors that relate with each other
differently, according to the context and the sector involved.
Similar
conclusions may be reached by looking at studies about entrepreneurship. Even
though entrepreneurialism is not necessarily innovative, there is a strong
connection between both, as new ideas are often diffused through the
establishment of new firms. Several authors (Armington & Acs 2002,
Kirchhoff & Armington 2002, Lee et al. 2004, Reynolds et al. 1994) have
tried to understand why some regions are more entrepreneurial than others, and
their results may shed some light on this issue (see Table 10). What they show
is that entrepreneurialism is a product of agglomeration (as there is a
positive significant correlation with population growth and concentration). But
at the same time this agglomeration needs to be combined with a specific type
of economic development trajectory: those regions where there is a higher
industrial intensity and smaller establishment sizes are more likely to be
entrepreneurial. Again this is consistent not only in the US but in the cross
national comparison. The explanation for this is that old industrial regions,
such as South Yorkshire, had an economic structure based around a few large
firms that employed thousands of workers. In contrast places like London or
Cambridge, more oriented towards services, have a bigger tradition in small
business activity. This has a direct impact on the institutional structure of
regions, with the former being more dependent on the existence of a few big
projects and the latter being more able to generate entrepreneurial activity.
In terms of ICT adoption success seems to be more connected with the second
type of cultural/institutional structure, because more than having a big firm
providing a service, the important is to have all firms using it to become more
competitive.
Table 10: Indicators
used to explain firm birth rates in journal articles by Lee et al. (2004), Armington et al. (2002), Reynolds et al. (1994), Kirchhoff et al. (2002)
|
Independent Variables
|
Articles were it was
used to explain firm birth rates
|
Significant or non significant
|
|
Economic factors
|
|
|
|
Income growth
|
Lee et al.
(2004)
Armington et al.
(2002)
Reynolds et al. (1994)
|
Sig.
Sig.
Positive
|
|
Industry intensity
|
Lee et al.
(2004)
Armington et al.
(2002)
Kirchhoff et al. (2002)
|
Sig.
Sig.
Sig.
|
|
Establishment size
|
Lee et al.
(2004)
Armington et al.
(2002)
Kirchhoff et al. (2002)
|
Sig. (-)[9]
Sig. (-)
Sig (-)
|
|
% of small firms
|
Reynolds et al. (1994)
|
Positive
|
|
University R&D
expenditures
|
Kirchhoff et al. (2002)
|
Sig.
|
|
Number of patents
|
Lee et al. (2004)
|
Not sig.
|
|
Government spending in
infrastructures
|
Reynolds et al. (1994)
|
No impact
|
|
Government financial
assistance to new and small firms
|
Reynolds et al. (1994)
|
No impact
|
|
Social factors
|
|
|
|
Population growth
|
Lee et al.
(2004)
Armington et al.
(2002)
Reynolds et al.
(1994)
Kirchhoff et al. (2002)
|
Sig.
Sig.
Positive Sig.
|
|
% of population with formal occupational training or post-high school
degrees
|
Reynolds et al. (1994)
|
Positive
|
|
Population density
|
Reynolds et al. (1994)
|
Positive
|
|
% of population 25-44
years old
|
Reynolds et al. (1994)
|
Positive
|
|
% of population with high
school degree
|
Kirchhoff et al. (2002)
|
Not sig.
|
|
% of adults with college degree
|
Lee et al.
(2004)
Armington et al.
(2002)
Kirchhoff et al. (2002)
|
Sig.
Sig.
Not sig.
|
|
Extent of socialist
voting patterns in recent election
|
Reynolds et al. (1994)
|
Mix impact
|
|
Cultural factors
|
|
|
|
Creativity – Bohemian
Index10
|
Lee et al. (2004)
|
Sig.
|
|
Diversity – Diversity (or gay) index11
|
Lee et al. (2004)
|
Sig.
|
|
Diversity – Melting pot index12
|
Lee et
al. (2004) Kirchhoff et al.
(2002)
|
Not sig.
Not sig.
|
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[1] Sensitivity analysis
showed, however, that this correlation was not robust with respect to changes
in the set of exogenous variables considered.
[3] Barnett
(1953), Rothwell and Wissema (1986), Hofstede (2001), Beteille (1977), Mokyr
(1991), Herbig & Miller (1992), Lee (1998)
[4]
One has to ask though if restrictive political and economic systems that leave
little influence to ordinary people do not contribute as much to a high degree
of fatalism and low-innovativeness as religious beliefs do.
[5]
The validity of comparison between USA and EU figures on this questions is
hampered by the fact that multiple-response was not allowed in the USA.
[6]
She argues that cultural diversity is especially important for product
innovations in fast changing and unstable business environments as those found
in the knowledge economy and ICT branches.
[7] Bergmann cautions insofar
as he only took two East German regions into consideration. He calls for
further analysis taking into account all East German regions (2005:196).
[8]
The opposite view was mentioned by Grabher (1993) when he identified the
“weakness of strong (historical) ties” and low propensity to change in
Germany’s Ruhr area.
[9] The
sign (-) means that the relation is negative i.e. the regions with lower
establishment sizes have higher firm birth rates. 10 Measures the proportion of ´bohemians` and
other artistically creative people in a region 11 Measure of the concentration of same-sex male
unmarried partners 12 Measure of
the % of population that is foreign-born
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