The Policy Maker's Toolkit

Various governments, both national and regional, have instigated 'knowledge economy' efforts with varying degrees of success. Too often the emphasis has over-relied on inputs, such as education or R&D, rather than the other factors. The diagram below highlights the importance of 1) superstructure/infrastructure - the business environment, quality of regulation, availability of start-up finance etc., and 2) the 'recipes', i.e. the processes that turn the inputs into valuable outputs.

This page, based on Chapter 9 of reference 1 outlines the actions that policy makers need to take in some key areas to develop a thriving knowledge economy in their area.

The Role of Policy Makers

Policy makers have three main roles in creating the right conditions for successful knowledge-based enterprises:

1. An intelligent user - being a good provider, customer, and partner in knowledge initiatives.
2. An actor - stimulating the development of knowledge-based businesses, through a variety of support mechanisms.
3. A regulator - providing an legal and regulatory framework that is neither too restrictive that it stifles innovation, nor too 'laissez-faire' that it allows dominant, usually legacy, interests to prevail.

The order above is how many policy makers prioritize their efforts. However, it needs reversing. How many senior policy makers have themselves worked in an innovative knowledge-intensive business?

Become an Intelligent User

What has struck me in the past is how many policy makers are cocooned in their own environment. I particularly recall a government department dedicated to supporting small business, where very few individuals had ever worked in a small busines, or even spent time away from their day job actually visting and talking to small business managers in their environment. Personal development and gaining hands-on experience is therefore the primary focus of this part of the toolkit:

• Make time to learn - in many professional organizations 5-10% of time is not unusual. Learning and personal development must be a key part of every policy maker's job description and the time must be earmarked.
• Spend much of this time with other intelligent users (your clients). Follow the steps of some business leaders who spend a day a month on the 'shop floor'. In other words spent time with your key clients, ideally work shadowing.
• Keep abreast of communications and collaborative technologies that underpin knowledge work. Go to caonferences and briefings. Invite key providers into your department and have a showcase of lastest developments.
• Identify individuals in your department who can be experimenters or demonstrators of relevant tools and methods.
• Make use of secondments from your client base. Also involve students, such as those studying for an MBA or other relevant Masters or Doctorate, to do a project with your department.

Above all, make sure your own department/agency is an effective knowledge-centric organization (knowledge, after all, is essentially your only output), maximising the exploitation of its knowledge through the KM approaches described in our KM Roadmap and throughout this website.

Act to Stimulate

Too often in the past, governments have focussed only on developing the inputs needed for a knowledge economy. The success of regions like Silicon Valley in California shows us that much depends, not just on the quality of local graduates but on networks of entrepreneurs, access to capital and other important infrastructure elements. Whereas it took Silicon Valley some 40 years to come to maturity, the process has taken only 15 years for Austin, Texas. Much of its development as a knowledge economy hub is due to the work of IC², the Institute of Innovation, Creativity and Capital. It nurtures four strands of infrastructure:

• Talent - of enterprising individuals, backed up by good educational and research facilities
• Know-how - not just technical knw-how but practical know-how of starting and running knowledge-intensive businesses
• Technology - innovation in both the lab and the marketplace
• Capital - from both venture capitalists and private individuals, for example via a 'business angels' network.

Here, and now in other places, an important role is played by incubators, in which embryonic businesses can set up cheaply, get advice and have connections into people representing one or more facets of the essential infrastructure elements.

Therefore, when it comes to public policy, public agencies must ask themselves how much do they understand how the 'recipes' operate that convert inputs into successful results? And beyond that, what policies and fudning are in place to stimulate the take up of these recipes. Typical of the policies that are needed are:

• An up to date relevant industrial policy - one that stimulates new creative and knowledge-based industries, and not one supporting legacy businesses.
• Injection of funds into R&D networks, incubators and start-up advice - to take ideas and commercialize them.
• Kick-starting networks that bring public sector together with private and creators together with potential markets.

There are good examples around, from the European Commission 'Framework' programmes on a large scale to community partnerships and innovation hubs at a local level.

Relevant Regulation

This is perhaps the most difficult area. It seems to be a feature of governments - both national and local - that bureaucrats just like to add layer upon layer of regulation. And too often it is the "one size fits all" approach, such as employment and health and safety regulations that are brought in to ensure high standards in large organizations and with hazardous situations, but which are too frequently applied with the same rigour to small knowledge-based and start-up businesses. Here's a check list for anyone involved with developing and enforcing regulations:

• Think small: what is the onus of existing and planned regulations on start-up companies
• Think cost: how much does it cost to set up a new business in your country and to protect intellectual capital
• Think fast: how quickly can entrepreneurs set-up shop and get responses on regulatory queries or go through essential regulatory processes
• Think global: how compatible are your regulations with those of your trading partners and global competitors.
• Think reward: are your public servants responsible for regulation measured on their 'inputs' (how many new regulations they produce) or their outputs and outcomes (benefits to knowledge-based businesses).
• Think again: are existing regulations past their 'sell-by' date? When did you last review and revoke regulations designed for a by-gone age? Have you reviewed every regulation more than five years old to see if it is still relevant?

Further Reading

1. Knowledge Networking: Creating the Collaborative Enterprise, David J. Skyrme, Butterworth-Heinemann (1999). Further Details.

2. Global Knowledge Incubators, David J. Skyrme, an article on what businesses need to create a new Silicon Valley in much less time, I3 Update, No 29 (May 1999 - at our archive wesbite).

Last updated: 19th March 2011