Four Are Better Than One—But First, Let Us Plan It Strategically
This chapter starts the constructive journey of developing a strategy for local innovation-based growth in each stage of production. It does so by first making clear what is (and what is not) innovation policy. Reminding the reader that there are only two innovation actors in the economy (individuals and firms), and only three goals of innovation policy: (i) equipping the agents of innovation with the necessary capacities, (ii) building and sustaining the ecosystem in which they can flourish, and (iii) finding the most effective ways to stimulate said actors to innovate. It then introduces the concept of growth models to develop and build the ideas of the four fundamentals of local innovation-based growth policy: (1) Flows of local–global knowledge, demand, and input; (2) The supply and creation of public and semi-public goods; (3) A local ecosystem that reinforces the firm-level benefits of the previous two fundamentals; and (4) Managing the co-evolution of the previous three fundamentals and the changing role of public policy as the locale grows and excels. Using these tools, the chapter analyzes the case for stage 4 innovation specialization through the case of Shenzhen.