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Innovation in Real Places: Strategies for Prosperity in an Unforgiving World
Winner of Balsillie Prize for Public Policy
Winner of Donner Prize
A Summer Book of 2021, Financial Times
Longlisted Financial Times and McKinsey Best Business Book of the Year
A challenge to prevailing ideas about innovation and a guide to identifying the best growth strategy for your community.
Across the world, cities and regions have wasted trillions of dollars on blindly copying the Silicon Valley model of growth creation. Since the early years of the information age, we've been told that economic growth derives from harnessing technological innovation. To do this, places must create good education systems, partner with local research universities, and attract innovative hi-tech firms. We have lived with this system for decades, and the result is a small number of regions and cities at the top of the high-tech industry but many more fighting a losing battle to retain economic dynamism.
But are there other models that don't rely on a flourishing high-tech industry? In Innovation in Real Places , Dan Breznitz argues that there are. The purveyors of the dominant ideas on innovation have a feeble understanding of the big picture on global production and innovation. They conflate innovation with invention and suffer from techno-fetishism. In their devotion to start-ups, they refuse to admit that the real obstacle to growth for most cities is the overwhelming power of the real hubs, which siphon up vast amounts of talent and money. Communities waste time, money, and energy pursuing this road to nowhere. Breznitz proposes that communities instead focus on where they fit in the four stages in the global production process. Some are at the highest end, and that is where the Clevelands, Sheffields, and Baltimores are being pushed toward. But that is bad advice. Success lies in understanding the changed structure of the global system of production and then using those insights
to enable communities to recognize their own advantages, which in turn allows to them to foster surprising forms of specialized innovation. As he stresses, all localities have certain advantages relative to at least one stage of the global production process, and the trick is in recognizing it. Leaders might think the answer lies in high-tech or high-end manufacturing, but more often than not, they're wrong. Innovation in Real Places is an essential corrective to a mythology of innovation and growth that too many places have bought into in recent years. Best of all, it has the potential to prod local leaders into pursuing realistic and regionally appropriate models for growth and innovation.
Winner of Donner Prize
A Summer Book of 2021, Financial Times
Longlisted Financial Times and McKinsey Best Business Book of the Year
A challenge to prevailing ideas about innovation and a guide to identifying the best growth strategy for your community.
Across the world, cities and regions have wasted trillions of dollars on blindly copying the Silicon Valley model of growth creation. Since the early years of the information age, we've been told that economic growth derives from harnessing technological innovation. To do this, places must create good education systems, partner with local research universities, and attract innovative hi-tech firms. We have lived with this system for decades, and the result is a small number of regions and cities at the top of the high-tech industry but many more fighting a losing battle to retain economic dynamism.
But are there other models that don't rely on a flourishing high-tech industry? In Innovation in Real Places , Dan Breznitz argues that there are. The purveyors of the dominant ideas on innovation have a feeble understanding of the big picture on global production and innovation. They conflate innovation with invention and suffer from techno-fetishism. In their devotion to start-ups, they refuse to admit that the real obstacle to growth for most cities is the overwhelming power of the real hubs, which siphon up vast amounts of talent and money. Communities waste time, money, and energy pursuing this road to nowhere. Breznitz proposes that communities instead focus on where they fit in the four stages in the global production process. Some are at the highest end, and that is where the Clevelands, Sheffields, and Baltimores are being pushed toward. But that is bad advice. Success lies in understanding the changed structure of the global system of production and then using those insights
to enable communities to recognize their own advantages, which in turn allows to them to foster surprising forms of specialized innovation. As he stresses, all localities have certain advantages relative to at least one stage of the global production process, and the trick is in recognizing it. Leaders might think the answer lies in high-tech or high-end manufacturing, but more often than not, they're wrong. Innovation in Real Places is an essential corrective to a mythology of innovation and growth that too many places have bought into in recent years. Best of all, it has the potential to prod local leaders into pursuing realistic and regionally appropriate models for growth and innovation.
280 pages, Paperback
Published March 3, 2023
69 people are currently reading
1011 people want to read
About the author
Dan Breznitz
5 books5 followersDan Breznitz is an associate professor at the Sam Nunn School of International Affairs and the College of Management, and an associate professor by courtesy at the School of Public Policy at Georgia Institute of Technology. He is author of the award-winning book Innovation and the State, published by Yale University Press, and a Sloan Foundation Industry Studies Fellow. He lives in Atlanta.
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Displaying 1 - 23 of 23 reviews
August 30, 2021
Every government should read this (because every government is trying to “do” innovation
This is such an extraordinary book compared to the work of so many others professing to know how innovation works. The author has a deep and nuanced understanding of what worked in the past rather than superficial awareness of names of policies with crude attempts to lift and shift.
For so many governments “doing innovation” means a construction programme of office buildings and financing attempts. Instead the author starts by explaining that innovation is the adoption of inventions; it is innovation rather than invention that makes a benefits societies and builds economies; and it is people and companies that innovate - not buildings, accelerators, financers, lawyers or politicians. So the key is to figure out what your policies will do to improve the behaviour and effectiveness of your local people and firms to do innovation. All the other actors need to be considered for the benefits they give to these true agents of innovation.
The author also spells out 4 stages of innovation - stage 1 is the sexiest and most talked about but also the hardest to bring and the least valuable to host. Silicon Valley is what everyone wants to copy and very few have managed to do so like Israel - who paid a heavy price in doing so. By contrast stages 2 (eg Hamilton, Canada), 3 (eg Taiwan) and 4 (eg Shenzhen, China) of innovation are more achievable, bring far greater employment, and require completely different strategies. To me the book was counterintuitive and systematic. I really enjoyed reading it.
This is such an extraordinary book compared to the work of so many others professing to know how innovation works. The author has a deep and nuanced understanding of what worked in the past rather than superficial awareness of names of policies with crude attempts to lift and shift.
For so many governments “doing innovation” means a construction programme of office buildings and financing attempts. Instead the author starts by explaining that innovation is the adoption of inventions; it is innovation rather than invention that makes a benefits societies and builds economies; and it is people and companies that innovate - not buildings, accelerators, financers, lawyers or politicians. So the key is to figure out what your policies will do to improve the behaviour and effectiveness of your local people and firms to do innovation. All the other actors need to be considered for the benefits they give to these true agents of innovation.
The author also spells out 4 stages of innovation - stage 1 is the sexiest and most talked about but also the hardest to bring and the least valuable to host. Silicon Valley is what everyone wants to copy and very few have managed to do so like Israel - who paid a heavy price in doing so. By contrast stages 2 (eg Hamilton, Canada), 3 (eg Taiwan) and 4 (eg Shenzhen, China) of innovation are more achievable, bring far greater employment, and require completely different strategies. To me the book was counterintuitive and systematic. I really enjoyed reading it.
June 19, 2021
Probably the best book on innovation policy in recent years, its common mistakes, failures, and misconceptions, as well as strategies for success. It should be compulsory reading for all policymakers that fell into the delusion that their "Silicon Hyphen" will be a success rivaling the Bay Area.
Breznitz enjoyably describes the various success stories, failures as well as theoretical underpinnings of how can regions create their own was for local economic development through innovation - not just novel and radical innovations, but later stage, incremental and manufacturing-based models, that bring wider prosperity than gigantic exits of VC-backed ICT startups.
In the latter chapters, Breznitz also greatly describes how the intellectual property regimes, systems of corporate finance, and data mining are diminishing the possibilities for local economic growth through innovation.
Breznitz is a must-author for anyone that wants to understand innovation and technology policy and this might his best book yet.
Breznitz enjoyably describes the various success stories, failures as well as theoretical underpinnings of how can regions create their own was for local economic development through innovation - not just novel and radical innovations, but later stage, incremental and manufacturing-based models, that bring wider prosperity than gigantic exits of VC-backed ICT startups.
In the latter chapters, Breznitz also greatly describes how the intellectual property regimes, systems of corporate finance, and data mining are diminishing the possibilities for local economic growth through innovation.
Breznitz is a must-author for anyone that wants to understand innovation and technology policy and this might his best book yet.
November 23, 2023
This is the first and probably the last book I've read based on the recommendation of Khachik Gevorgyan (also known to the public as Armacad Khcho, or Արմակադի Խչո) that I actually liked. It's a must-read amidst the global frenzy over startups and venture capital, often seen as the sole path to prosperity and growth. This book should be read by everyone, even those who dream of being buried in the backyard of Y Combinator.
January 2, 2023
Obviously not a complete theory of innovation, but nothing is! Breznitz describes several geographic locations around the world at different periods in time and how the use of capital and policies lead to innovations at different stages of the supply chain. He goes through the pros and cons, what worked and what did not (retrospectively). The most interesting part, imho, was to see how regions pivoted their investments quite strategically to survive the emergence of low cost products somewhere else. A must read!
February 16, 2024
Overall, it's a nice book, especially the parts explaining Shenzhen and Taiwan. The other case studies weren't quite as interesting, personally speaking. I was mostly fascinated by the stories about Shenzhen, because I was also particularly interested in its ecosystem, due to the many praises it receives from business executives like Tim Cook and Bill Gates. The interviews explaining why some people chose to settle their businesses and production plants in Shenzhen are well-done and very understandable.
May 31, 2023
In Innovation in Real Places, Dan Breznitz tackles the misperception that "innovation equals high-tech industries, new businesses, and/or new gadgets". He argues that innovation in not the same as invention or research. It is a much broader concept that "comes in all stages from the first vision, design, development, production, sale and usage, to the after-sale aspects of products and services….innovation is the process of using ideas to offer new or improved products and services at the same factor costs". By focussing just on Silicon Valley-esque model of VC-backed high tech start ups, countries and cities do themselves a disservice; they are not thinking deeply enough about their unique advantages and resources, the form of innovation that would rely on these advantages and the particular capacities that need to be developed. More importantly, they do not consider the kind of society they want to create, the kind of socio-economic outcomes (and trade-offs) resulting from the form of innovation they choose to focus on.
According to Breznitz, there are four innovation stages. Stage 1 (Novelty) is the one most of us are familiar with, what Silicon Valley exemplifies. Countries and cities often try to push for Stage 1 innovation by competing for the R&D centres of MNCs. Breznitz argues that "while this may have led to innovation-based growth in the past, in the current world of fragmented global production, those R&D centres have a mostly negative impact on the local innovation ecosystem. Wages…go up beyond the ability of local companies to compete; inequality jumps, since almost only R&D engineers are hired; social fragmentation increases, since most workers develop intense collaboration with other people within their firms around the world, and have very little time to get involved with the local high-tech community; and the innovative fruits of the R&D centres are transformed to the MNCs' HQs and then outsourced around the world without ever creating jobs for the non-engineers (who end up paying most of the tax benefits awarded to those MNCs)." Far better for communities to prosper by "developing a specific set of innovation capacities and capabilities, not by paying large amount of taxpayers' money for companies to locate an isolated activity".
Breznitz points out that cities like Atlanta that focus on Stage 1 innovation fail to truly thrive. The successful tech firms fail to engender much collateral local growth; they are socially fragmented, their connections being with financiers, customers and peers are not with the local community but with hubs located elsewhere. Ultimately, the benefits of these tech firms - in terms of economic growth and job creation - in Atlanta (and other similar aspiring innovation hubs) accrue to the dominant clusters elsewhere.
Breznitz cites Israel as another case in point; by all counts it is a tremendous success with a thriving R&D and (stage 1) innovation ecosystem. Yet, Breznitz notes that "during [the] years of unparalleled innovation based growth, the rest of the economy enjoyed no positive spillovers". The tech boom focussed on lucrative financial exits that benefited a select group, rather than on growing companies that would employ large numbers of non-engineers.
Stage 2 (design, prototype development and production engineering) innovation is exemplified by Taiwanese ICT companies that can translate blueprints into a physical reality, and also Italy, in the area of luxury women's shoes and high end furniture.
Stage 3 (second-generation product and component innovation) innovation refers to the kind of innovation to "make existing products and technologies better, more reliable, and more appealing to wider groups of users". Samsung, Wipro, Infosys, Tata Consultancy, the German and Japanese automobile companies and Taiwanese companies across a broad range of sectors from bicycles to chip design exemplify Stage 3 innovation.
Stage 4 (production and assembly) innovation refers to the process of "figuring out how to profitably produce every more complex products from tens, sometimes hundreds, of thousands of components developed by multiple companies around the world, and second, figuring out how to systematize production using constantly changing materials". China's Pearl River Delta manufacturing ecosystem exemplifies this sort of innovation, where companies are able to produce within a short period of time, an array of extremely sophisticated products like computers, smartphones, etc and to scale up and scale down production at a moment's notice.
Once countries and regions have decided on the innovation stage that would best suit their particular advantages and strengths, they can then develop an appropriate innovation policy. An innovation policy, Breznitz clarifies focusses on (a) equipping the agents of innovation (i.e. companies and individuals) with the capacities they need in order to excel; (b) developing, supporting and sustaining the economic ecosystem that innovators need to thrive; and (c)finding the most effective ways to stimulate said agents to innovate and grow their businesses. Having a higher education policy, an R&D policy, identifying high tech sectors as an area of focus are not the same as having an innovation policy. Different types of innovation will require fundamentally different elements under (a), (b) and (c).
Innovation in Real Places was an eye opening read for me. I confess to being one of those who thought of innovation in Silicon Valley-esque terms and Breznitz helped clarify for me how there are different innovation stages that the choices policymakers make affect how the region succeeds and who in the region reaps the benefits. Breznitz argues that policymakers need to ask themselves "what growth looks like. Should it mean a transformation of the local economy by an onslaught of new companies with nifty new products and services, defining new industries and redefining old ones. Should it mean a resurgence of existing companies as they supply critical components and services in a world economy controlled by global production networked?...who is going to be employed, and by whom, if your innovation-based growth plans reach fruition? And what levels of equity, inequality and state intervention do you see as acceptable?
According to Breznitz, there are four innovation stages. Stage 1 (Novelty) is the one most of us are familiar with, what Silicon Valley exemplifies. Countries and cities often try to push for Stage 1 innovation by competing for the R&D centres of MNCs. Breznitz argues that "while this may have led to innovation-based growth in the past, in the current world of fragmented global production, those R&D centres have a mostly negative impact on the local innovation ecosystem. Wages…go up beyond the ability of local companies to compete; inequality jumps, since almost only R&D engineers are hired; social fragmentation increases, since most workers develop intense collaboration with other people within their firms around the world, and have very little time to get involved with the local high-tech community; and the innovative fruits of the R&D centres are transformed to the MNCs' HQs and then outsourced around the world without ever creating jobs for the non-engineers (who end up paying most of the tax benefits awarded to those MNCs)." Far better for communities to prosper by "developing a specific set of innovation capacities and capabilities, not by paying large amount of taxpayers' money for companies to locate an isolated activity".
Breznitz points out that cities like Atlanta that focus on Stage 1 innovation fail to truly thrive. The successful tech firms fail to engender much collateral local growth; they are socially fragmented, their connections being with financiers, customers and peers are not with the local community but with hubs located elsewhere. Ultimately, the benefits of these tech firms - in terms of economic growth and job creation - in Atlanta (and other similar aspiring innovation hubs) accrue to the dominant clusters elsewhere.
Breznitz cites Israel as another case in point; by all counts it is a tremendous success with a thriving R&D and (stage 1) innovation ecosystem. Yet, Breznitz notes that "during [the] years of unparalleled innovation based growth, the rest of the economy enjoyed no positive spillovers". The tech boom focussed on lucrative financial exits that benefited a select group, rather than on growing companies that would employ large numbers of non-engineers.
Stage 2 (design, prototype development and production engineering) innovation is exemplified by Taiwanese ICT companies that can translate blueprints into a physical reality, and also Italy, in the area of luxury women's shoes and high end furniture.
Stage 3 (second-generation product and component innovation) innovation refers to the kind of innovation to "make existing products and technologies better, more reliable, and more appealing to wider groups of users". Samsung, Wipro, Infosys, Tata Consultancy, the German and Japanese automobile companies and Taiwanese companies across a broad range of sectors from bicycles to chip design exemplify Stage 3 innovation.
Stage 4 (production and assembly) innovation refers to the process of "figuring out how to profitably produce every more complex products from tens, sometimes hundreds, of thousands of components developed by multiple companies around the world, and second, figuring out how to systematize production using constantly changing materials". China's Pearl River Delta manufacturing ecosystem exemplifies this sort of innovation, where companies are able to produce within a short period of time, an array of extremely sophisticated products like computers, smartphones, etc and to scale up and scale down production at a moment's notice.
Once countries and regions have decided on the innovation stage that would best suit their particular advantages and strengths, they can then develop an appropriate innovation policy. An innovation policy, Breznitz clarifies focusses on (a) equipping the agents of innovation (i.e. companies and individuals) with the capacities they need in order to excel; (b) developing, supporting and sustaining the economic ecosystem that innovators need to thrive; and (c)finding the most effective ways to stimulate said agents to innovate and grow their businesses. Having a higher education policy, an R&D policy, identifying high tech sectors as an area of focus are not the same as having an innovation policy. Different types of innovation will require fundamentally different elements under (a), (b) and (c).
Innovation in Real Places was an eye opening read for me. I confess to being one of those who thought of innovation in Silicon Valley-esque terms and Breznitz helped clarify for me how there are different innovation stages that the choices policymakers make affect how the region succeeds and who in the region reaps the benefits. Breznitz argues that policymakers need to ask themselves "what growth looks like. Should it mean a transformation of the local economy by an onslaught of new companies with nifty new products and services, defining new industries and redefining old ones. Should it mean a resurgence of existing companies as they supply critical components and services in a world economy controlled by global production networked?...who is going to be employed, and by whom, if your innovation-based growth plans reach fruition? And what levels of equity, inequality and state intervention do you see as acceptable?
This entire review has been hidden because of spoilers.
October 6, 2021
Dan Breznitz's book is an important and refreshing splash of cold water for all those wishing that there was an innovation and prosperity silver bullet. For all the stakeholders (particularly government) who think that "focusing on innovation and trendy buzzwords" will bring prosperity to their locales, Breznitz is telling them to wake up.
There is no magic formula to craft and implement innovation policies. It is a long hard slog. But more importantly, he reminds us that the crucial step which is almost always overlooked is to first ask ourselves what growth should look like and what would transformation of the local economy mean. Only by honestly knowing those answers can a proper vision and strategy be developed that would hopefully lead to innovation-based growth and prosperity.
He presents a few useful frameworks for thinking about the different types of innovation and what is needed for them to work. There are four stages of production which require very different innovational capabilities and ecosystems. What typically comes to mind is Stage 1, Novelty rather than the more mundane Stage 4: Production and assembly. Yet, cities like Shenzhen have prospered from Stage 4 innovation as compared to the likes of Silicon Valley that are abundant with Stage 1 companies yet face among the highest levels of inequality in the world. He rallies against the obsession of creating "Silicon-Hyphens" which is associated with Stage 1 production; everyone wants to be the next Silicon X, which doesn't make sense.
Whatever stage the city is at or is trying to achieve, four fundamentals are required, according to Breznitz: flows of local-global knowledge, demand, and input; the supply and creation of public and semi-public goods; a local ecosystem the reinforces the firm-level benefits of the previous two fundamentals; and co-evolution of the previous three fundamentals. What exactly he means by these four fundamentals, you have to read the book to find out yourself.
The last section of the book on what he calls "the three dysfunctionals" appears hastily tacked on and poorly edited (I spotted several typos) as if he he had a publisher's deadline to meet. To be fair, Breznitz does state upfront that this section could be read as an "essential addendum". The last chapter on data in particular seemed weak and an inadequate introduction to the topic in comparison with the strengths of the chapters in the earlier section of the book.
I have been professionally guilty of perpetrating some of the sins that Breznitz points out. While the framework makes sense and is useful, the real struggle would be convincing stakeholders hoping for a quick and easy panacea to prosperity. It is unlikely that those who would benefit most from this book would appreciate it, let alone read it in the first place.
But dear reader, perhaps by reading this book, you can already get an immediate leg-up over your competition in your search for prosperity through innovation in this unforgiving world.
There is no magic formula to craft and implement innovation policies. It is a long hard slog. But more importantly, he reminds us that the crucial step which is almost always overlooked is to first ask ourselves what growth should look like and what would transformation of the local economy mean. Only by honestly knowing those answers can a proper vision and strategy be developed that would hopefully lead to innovation-based growth and prosperity.
He presents a few useful frameworks for thinking about the different types of innovation and what is needed for them to work. There are four stages of production which require very different innovational capabilities and ecosystems. What typically comes to mind is Stage 1, Novelty rather than the more mundane Stage 4: Production and assembly. Yet, cities like Shenzhen have prospered from Stage 4 innovation as compared to the likes of Silicon Valley that are abundant with Stage 1 companies yet face among the highest levels of inequality in the world. He rallies against the obsession of creating "Silicon-Hyphens" which is associated with Stage 1 production; everyone wants to be the next Silicon X, which doesn't make sense.
Whatever stage the city is at or is trying to achieve, four fundamentals are required, according to Breznitz: flows of local-global knowledge, demand, and input; the supply and creation of public and semi-public goods; a local ecosystem the reinforces the firm-level benefits of the previous two fundamentals; and co-evolution of the previous three fundamentals. What exactly he means by these four fundamentals, you have to read the book to find out yourself.
The last section of the book on what he calls "the three dysfunctionals" appears hastily tacked on and poorly edited (I spotted several typos) as if he he had a publisher's deadline to meet. To be fair, Breznitz does state upfront that this section could be read as an "essential addendum". The last chapter on data in particular seemed weak and an inadequate introduction to the topic in comparison with the strengths of the chapters in the earlier section of the book.
I have been professionally guilty of perpetrating some of the sins that Breznitz points out. While the framework makes sense and is useful, the real struggle would be convincing stakeholders hoping for a quick and easy panacea to prosperity. It is unlikely that those who would benefit most from this book would appreciate it, let alone read it in the first place.
But dear reader, perhaps by reading this book, you can already get an immediate leg-up over your competition in your search for prosperity through innovation in this unforgiving world.
September 6, 2022
This book provides a look at different models of innovation, with a collection of interesting contrarian takes on what innovation actually means (spoiler: innovation isn't synonymous with "Silicon Valley"). Breznitz discusses four main models of innovation, and his perspective on how they can be harnessed in different places to generate sustained economic growth.
I appreciated Breznitz' tell-it-like-it-is perspective on the nature of funding, equity vs. debt, the types of jobs that are created by "innovative" companies, and the role governments should play (and usually don't play) in fostering growth.
The final three chapters are a look at the challenges posed by the business / commercial world's focus on and misuse of intellectual property rights, financialization, and "big data". Breznitz frames them as an "optional addendum" but I actually think that for many readers (especially those like me, who are not business-model experts) they form the most interesting part of the book.
I enjoyed reading Breznitz' opinion (and what he writes makes a lot of sense) but for someone who doesn't live and breathe consulting / policy / etc., the discussion of business models could be confusing. The examples given (shoe manufacturing in Italy, semiconductor fabs in Taiwan, research funding institutes in Israel) would have been more valuable to generalist readers if the author had added in more specific examples (name some companies, their products, the specific roles they play, how they work together, the chronology, etc.).
I was also surprised at the number of grammatical errors and spelling mistakes in the book. I feel like I came across one every five or six pages. The book is still worth reading, of course -- especially as an antidote to VC-driven hype and founder-worship -- but it gives the impression that the book was hastily edited.
I appreciated Breznitz' tell-it-like-it-is perspective on the nature of funding, equity vs. debt, the types of jobs that are created by "innovative" companies, and the role governments should play (and usually don't play) in fostering growth.
The final three chapters are a look at the challenges posed by the business / commercial world's focus on and misuse of intellectual property rights, financialization, and "big data". Breznitz frames them as an "optional addendum" but I actually think that for many readers (especially those like me, who are not business-model experts) they form the most interesting part of the book.
I enjoyed reading Breznitz' opinion (and what he writes makes a lot of sense) but for someone who doesn't live and breathe consulting / policy / etc., the discussion of business models could be confusing. The examples given (shoe manufacturing in Italy, semiconductor fabs in Taiwan, research funding institutes in Israel) would have been more valuable to generalist readers if the author had added in more specific examples (name some companies, their products, the specific roles they play, how they work together, the chronology, etc.).
I was also surprised at the number of grammatical errors and spelling mistakes in the book. I feel like I came across one every five or six pages. The book is still worth reading, of course -- especially as an antidote to VC-driven hype and founder-worship -- but it gives the impression that the book was hastily edited.
November 30, 2021
Read as part of a Brandeis [University] Osher Life Long Learning Institute (BOLLI) Course.
The frame here is a book for geographic regional business development planners - how they can create a plan to have their geographic region benefit from innovation-led growth which provides companies with growth, allowing them to remain in the geography and to provide 'good' jobs to individuals within the geography.
Breznitz is critical of regional business development planners - who claim to make their geographies ...'the next Silicon-Hyphen..' observing/proving that this is indeed a very long shot - apart from Silicon Valley itself and the Boston, Ma. area that particular growth model hasn't been very well replicated.
Breznitz defines innovation and then divides Growth Models into stages - Stage 1 thru Stage 4 - advocating that 'innovation' can and has happened at any stage.
Breznitz leaves some of his major (perhaps well founded) criticisms of the current 'state of play' within the innovation experience for what he calls - the three dysfunctions:
* IPR system - which he feels inhibits innovation-led growth.
* Financialization - short-term ism - and the lack of patient capital - add in the Efficient Market Hypothesis - and this also inhibits innovation-led growth, and;
* Data - individuals, companies and regions should retain their own data and the rights to their data. Violating this principal will definitely inhibit innovation-led growth.
A textbook - with one author's strong opinions on the current state of 'capitalism' - and how to work within it. Stronger on critique than proscriptive solutions.
Should be of interest to those who read economics and current business.
Carl Gallozzi
Cgallozzi@comcast.net
The frame here is a book for geographic regional business development planners - how they can create a plan to have their geographic region benefit from innovation-led growth which provides companies with growth, allowing them to remain in the geography and to provide 'good' jobs to individuals within the geography.
Breznitz is critical of regional business development planners - who claim to make their geographies ...'the next Silicon-Hyphen..' observing/proving that this is indeed a very long shot - apart from Silicon Valley itself and the Boston, Ma. area that particular growth model hasn't been very well replicated.
Breznitz defines innovation and then divides Growth Models into stages - Stage 1 thru Stage 4 - advocating that 'innovation' can and has happened at any stage.
Breznitz leaves some of his major (perhaps well founded) criticisms of the current 'state of play' within the innovation experience for what he calls - the three dysfunctions:
* IPR system - which he feels inhibits innovation-led growth.
* Financialization - short-term ism - and the lack of patient capital - add in the Efficient Market Hypothesis - and this also inhibits innovation-led growth, and;
* Data - individuals, companies and regions should retain their own data and the rights to their data. Violating this principal will definitely inhibit innovation-led growth.
A textbook - with one author's strong opinions on the current state of 'capitalism' - and how to work within it. Stronger on critique than proscriptive solutions.
Should be of interest to those who read economics and current business.
Carl Gallozzi
Cgallozzi@comcast.net
June 8, 2023
3 1/2 stars
Very interesting, fresh, and smart policy ideas on innovation. Breznitz is capable of both pointing out the many ways in which our current system is deeply broken, and coming up with what we can do working within the current broken system to still allow for innovation. The first two parts of the book could have been a lot more succinct, however; we don't need so many examples of companies and countries that did similar things. Breznits proves he can write succinctly in the last two excellent chapters on our broken IP system, financial system, and data policy. Some of the policies he proposes sound radical only in that they're different from what we currently do, but they are so clearly sensible and applicable that they immediately don't seem radical at all.
I will point out one of the flaws with the Shenzhen economy model and the reason why so many countries put all their money into Stage 1 innovation and novel patenting rather than later stages is that that's where the majority of the profits lie. As Breznits points out, the company profiting does not necessarily mean the common citizen in the area benefits, but Shenzhen employees earn criminally low wages and capture very little of the money involved in a phone sale; most of the profits go to the chip and processor companies that rely on patented technology that only they can create. That market power gives them the leverage to charge two thirds of the cost of manufacturing a phone.
Very interesting, fresh, and smart policy ideas on innovation. Breznitz is capable of both pointing out the many ways in which our current system is deeply broken, and coming up with what we can do working within the current broken system to still allow for innovation. The first two parts of the book could have been a lot more succinct, however; we don't need so many examples of companies and countries that did similar things. Breznits proves he can write succinctly in the last two excellent chapters on our broken IP system, financial system, and data policy. Some of the policies he proposes sound radical only in that they're different from what we currently do, but they are so clearly sensible and applicable that they immediately don't seem radical at all.
I will point out one of the flaws with the Shenzhen economy model and the reason why so many countries put all their money into Stage 1 innovation and novel patenting rather than later stages is that that's where the majority of the profits lie. As Breznits points out, the company profiting does not necessarily mean the common citizen in the area benefits, but Shenzhen employees earn criminally low wages and capture very little of the money involved in a phone sale; most of the profits go to the chip and processor companies that rely on patented technology that only they can create. That market power gives them the leverage to charge two thirds of the cost of manufacturing a phone.
May 13, 2023
Overall, a great book and I appreciate the case studies and easily digestible language. I think the general premise and thesis is correct - that countries and regions need to think critically about how they compete in the global value chain, and form a coherent strategy (which involves making tough choices, and excluding alternatives).
Still not clear to me how this work is distinguishable and original from the "Variety of Capitalism" (VoC) or "Worlds of Welfare" Literature - seems like VoC in disguise.
Moreover, while I understand the tendency to create four distinct categories of innovation, I believe this might preclude abstract thinking, for example policies or situations that call for a blend of two or more strategies. It would have been nice to see greater explanation of how Breznitz' typology was derived, and also the underlying microeconomics (why does it make sense - why does the world operate on four stages)?
Still not clear to me how this work is distinguishable and original from the "Variety of Capitalism" (VoC) or "Worlds of Welfare" Literature - seems like VoC in disguise.
Moreover, while I understand the tendency to create four distinct categories of innovation, I believe this might preclude abstract thinking, for example policies or situations that call for a blend of two or more strategies. It would have been nice to see greater explanation of how Breznitz' typology was derived, and also the underlying microeconomics (why does it make sense - why does the world operate on four stages)?
February 16, 2023
Have you ever wondered why the Silicon Valley model was never replicated, even though governments and businesses continuously attempt to copy it around the world? Then read this book and also find other ways of growth creation than the one practiced in California’s most famous valley.
A critical concept Breznitz presents is specialized innovation. Instead of every region trying to become a hub that like a magnet attracts the brightest minds and deepest investor pockets, geographies need to build realistic and regionally appropriate models for growth and innovation. Then they can also give birth to highly successful, often specialized industry leaders. The concepts also explain why many fintech hubs are springing up around the world like the Crypto Valley in Zug, Switzerland.
A critical concept Breznitz presents is specialized innovation. Instead of every region trying to become a hub that like a magnet attracts the brightest minds and deepest investor pockets, geographies need to build realistic and regionally appropriate models for growth and innovation. Then they can also give birth to highly successful, often specialized industry leaders. The concepts also explain why many fintech hubs are springing up around the world like the Crypto Valley in Zug, Switzerland.
April 26, 2022
It's a pointless book to read, if you are looking for any actionable insights.
This book is better defined if you call the writer an 'expert in the hindsight', and this book - 'a graveyard of once successful companies and it's strategies'.
In all fairness, this could be a good theory book for students and academics, but is absolutely pointless for professionals.
This book is better defined if you call the writer an 'expert in the hindsight', and this book - 'a graveyard of once successful companies and it's strategies'.
In all fairness, this could be a good theory book for students and academics, but is absolutely pointless for professionals.
December 16, 2024
Good information, especially the details associated with the different levels of innovation and how different locales have implemented successful systems, and identifying some innovations systems and their downfall.
That said, I am not sold on his recommendations for updating IPR, financialization, and data.
That said, I am not sold on his recommendations for updating IPR, financialization, and data.
September 7, 2021
great book to learn what is innovation ?
biggest lesson to learn from this book are
(a) difference between invention and innovation
(b) why innovation is hard and risky for politicians
(C) big trend now - we have no idea how data driven economy will look like
biggest lesson to learn from this book are
(a) difference between invention and innovation
(b) why innovation is hard and risky for politicians
(C) big trend now - we have no idea how data driven economy will look like
March 7, 2023
Not really sure what "strategies" this book contains, other than a look back at all the failure of innovation policy around the globe.
Breznitz is a great thinker, but not sure he got it right in this book.
Breznitz is a great thinker, but not sure he got it right in this book.
August 24, 2024
Excellent book with a new view of an old problem…how do we innovate? Used for a course I instructed at National Defense University. The book proved to be an excellent source of discussion and thought.
January 1, 2022
8.5/10
January 2, 2022
amazing
I’m a college student getting into banking, and this was really perspective changing. Breath of fresh air and couldn’t recommend enough
I’m a college student getting into banking, and this was really perspective changing. Breath of fresh air and couldn’t recommend enough
July 1, 2022
A slow dense read but excellent antidote to Silicon Valley innovation myth.
October 2, 2022
Third segment’s probably the most important.
September 12, 2024
Headway
July 29, 2024
Después de leer varios libros sobre innovación que proponen un modelo como válido para todos los países del mundo sin importar otros factores, llegué a este que me sorprendió gratamente. La innovaciónes es la adopción de las invenciones en la economía real. Muchas oficinas de innovación alrededor del mundo intentan imitar lo que sucedió con Sillicon Valley (spoiler: casi nunca sale bien) pero hay otras formas de innovación menos "sexies" pero igual de importantes, que son más realizables para países en desarrollo. Breznitz se vale de casos en Canadá, Taiwan y China para mostrarnos este lado B de la innovación.
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