Innovation Management In The Region-Foreign Practice


This article presents a study of one of the successful regional innovative development cases – the state of North Carolina (USA). This example is quite impressive for the successful creation of an innovation infrastructure that contributes to the dense communication of the innovation process's primary agents on a separate territory. The purpose of the article is to identify the potential and adaptation opportunities in Russia's regions that provide effective technology transfer to the real economy in the state of North Carolina. The article's research object is a research cluster consisting of several universities and a Technology Park, called the "Research triangle of North Carolina" because its creation was a defining moment in the development of the region. Applying in this work such research methods as analysis, comparison, modeling, the following conclusions are obtained: 1) the prerequisites for creating a Research Triangle are formed; 2)the institutional design of the innovation system in the region is presented at present; 3)the necessary factors for the successful development of such research centers are highlighted. These aspects of the problem are particularly important for analyzing the US experience's potential application in Russia.

Keywords: Innovative developmentinstitutemanagementregion


People's ability to generate effective solutions aimed at the development of the economic system is largely determined by the existing institutions in a particular society. An extensive literature is devoted to the study of the influence of existing institutions to the economy (Acemoglu & Robinson, 2016; Pilyasov, 2012; Shestakovich, 2019) in which the authors explain the success of the country's development in scientific and technological development through historically established institutions in society. The concept of "institution" in this study will be understood as a rule or system of rules, beliefs, norms, and organizations that together generate regularity of (social) behaviour (Zulkarnay, 2018).

In this study we illustrate the "triple helix theory". The three elements of this helix are science and education, business, and the country's leadership. The cooperation of these three components provides a synergistic effect which gives scientific and technical development of the whole institutional system (Itskovits, 2011). The hypothesis of this study is that the process of development of the innovative economy in the region is based on the effective interaction of formal and informal institutions within the framework of the "triple helix" model. A successful example that fully fits into the "triple helix" theory is the research Triangle Technology Park in North Carolina. In its 60 years of operation, this "meta-Technopark" has placed North Carolina among the country's leaders on many economic indicators (employment, unemployment, cost of living, exports, etc.), transforming the lagging "tobacco state " into a centre of innovation. How the state government managed to achieve a high level of development of competitive high-tech export-oriented industries, and what institutions and institutional mechanisms contributed to this process are issues that will be discussed in the proposed article.

Problem Statement

According to the strategy of scientific and technological development of the Russian Federation (hereinafter - RF), approved by presidential decree of December 1, 2016 No. 641 one of the directions of the state policy is creation of favourable conditions for research, development and implementation of effective transfer of product innovation in the real economy. This indicates that in Russia, there is an understanding of the need for changes aimed at forming a system of close interaction between representatives of science and business, but measures aimed at achieving such interaction do not give the proper result. According to various estimates in Russia, about half of the entire industry belongs to the fourth technological order, 5% - to the fifth and about 1% - to the sixth. It is worth noting that in developed countries, the share of industries of the fifth and sixth orders is much higher (Marichev, 2019). According to the Global innovation index – (GII) - an aggregated indicator that illustrates the level of innovation development in the country, Russia ranks 46th with an index of 37, 6, among 129 countries. For comparison, the United States ranks 3rd with an index of 61.7, China-14th with an index of 54.8. There are various explanations for this lag scientific and technological progress in Russia, among which is the presence of the "Dutch disease" in the domestic economy, the presence of unfavourable informal institutions (Zulkarnay, 2018), the imbalance and autonomous existence of regional innovation systems, the imperfection of formal institutions of authority. In this regard, we can say that research of institutions that determine to innovative development of a region is quite relevant at present. The results obtained in this article can be used in further research to identify the possibilities of transplantation of North Carolina institutes in the regions of Russia.

Research Questions

The main issues to be addressed in this study are the following:

Identification of the main prerequisites for the creation of a Triangle technology Park on the territory of the state of North Carolina.

Research the interaction system of public administration institutions (organizations) with their inherent "rules" and functions of control, coordination, and innovation motivation.Determining the main factors for the successful development of such research centers.

Purpose of the Study

The purpose of the study is to provide an analytical review of the institutions included in the innovation management system in the state of North Carolina (USA), in order to identify the potential and opportunities for their adaptation in Russia.

Research Methods

The following methods were used during the work:

"Analysis and synthesis" of scientific literature, periodicals about the history of the state of North Carolina, research Triangle technology Park, which allowed us to identify the main prerequisites for innovative development of the region, identify non-random dependencies and determine their causes and consequences, as well as to formulate the main factors necessary for the creation of such a Technopark in a region.

"Comparison" - the method is used to formulate the main hypothesis and conclusions of the study.

"Modeling" - the method is used to build a model of interaction between the main subjects of the regional innovation system in the state of North Carolina.


The history of the innovation cluster began in 1952 when Howard Odum (sociologist and founder Of the Institute of social science research at the University of North Carolina) proposed a number of ideas for creating a research centre that combines the capacity of three local research universities and businesses, which activities would be aimed at the development of high-tech industries in the state (Cummings, 2017).

In the mid-50s, Romeo Guest, the head of a construction company, began to actively attract industrial companies to the state from other regions. Guest, who was a graduate of MIT, had an idea of science-based Economics based on the example of Highway 128 in Massachusetts. Based on the Boston experience, he coined the term "Research Triangle", noting the corresponding location of universities in the cities of Chapel Hill, Durham and Rolet. The basic concept of the Research Triangle was formulated as follows:

1) creating a favourable business environment that helps to attract large successful companies from other states to North Carolina;

2) creation of scientific laboratories and research centres on the territory of the Research Triangle;

3) interaction of universities and companies (local flow of knowledge, in order to expand and deepen research);

4) stimulating economic growth by developing innovative industries (Choi & Markham, 2019).

One of the main prerequisites for creating an innovation cluster in the state is the presence of universities with their comparative advantages in the form of 2 medical schools, 2 engineering schools and a core of outstanding researchers in almost every field of science. All three universities were located near the main airport and railway stations, which made this area attractive for potential residents to stay here. In addition, it should be noted that the idea of the Research Triangle was born after the Second world war, when many businessmen began to understand that scientific research is the engine of industrial growth (Nassar et al., 2019). New industries were being created, which required highly qualified specialists and new technologies. The research Park concept was soon presented to the state's Governor, Luther Hodges. Despite initial doubts, after a short period of time, the Governor supported the idea and became involved in the process of promoting it (Morgan, 2010). The main prerequisites for creation are shown in table 1 .

Table 1 -
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The initial idea was that at the first stage, the state provided only administrative support, and all financial support should be shared between companies and universities. However, the authorities soon came to understanding that in order to attract large businesses to the region, appropriate infrastructure is needed and began to actively promote the creation of infrastructure through the purchase of land necessary for the Technopark, the implementation of partial funding for education (grants, discounts for training), tax breaks. During the entire existence of the scientific cluster, about seven institutional units were created in order to effectively interact with the subjects of the innovation system (government, universities, business). However, the main governing body is The Commission on science and technology, which includes the Governor, the Minister of Commerce, representatives of universities, and representatives of industry on an equal basis, their main function is to identify priority areas of science and industry in the region. Within the framework of such interaction, each of the subjects has the motivation to invest Finance, knowledge, and manage efficiently. State authorities are interested in economic growth through the creation of new jobs, tax revenues, and growth of the gross regional product. Business entities are interested in the emergence of new competitive innovative products, which is possible thanks to joint research and development with universities. Universities, in turn, received sufficient funding from both the state and business to conduct research and maintain a high level of material and technical base (McCorkl, 2012).

A major role in the formation of the Triangle was played by local communities supporting, organizing, and managing science, technology, and innovation (Figure 1 ). In 1978, the North Carolina alternative energy Association was established. Its task is to analyze relevant technology projects, lobby for laws, and interact with state authorities. It consists of scientists, businesspeople and politicians who are engaged in the development of the idea of clean energy (Link, 1995).

3) In 1980, the Department of science and technology of the Ministry of Commerce (responsible for innovation policy) was established, the first result of which was the opening of the microelectronics Center in the same year. The center started creating research and educational network programs, which in the 90s (after technology improvements) was completed in the form of an "information highway"-a network that unites all research centers, enterprises and educational institutions of the Triangle and allows for rapid exchange and transfer of data between them. In 1984, the Department of science and technology initiated the creation of a center for biotechnology. Its goal is to stimulate research and business in this scientific field (mentoring support for scientists and entrepreneurs, attracting foreign investors) (De Arteche, 2018).

4) In 1984, a technology and small business development Center was established on the territory of the Triangle. Its original function is to advise on the organization of innovative business activities. Today, it is a public-private Association, subordinated to the state, engaged in expert assessments of business, provides assistance in processing applications for grants and applications for participation in various tenders (Menzel et al., 2017).

5) The Triangle business incubator program was developed in 1983 to support and develop new businesses established in the Technopark. For 13 years, it has evolved into an Association of business incubators – its activity is to supervise and support startups (Morgan, 2010).

6) In 1993, the Technology Association was established, which included the largest representatives of business in the state. The Association resolves issues of supporting key research areas, creating jobs, and lobbying for tax incentives (Link, 1995).

7) In 2009, the last organization that combines all the elements of the "triple helix" was created the Council for innovation. It includes: the Governor, 2 representatives of the upper and lower houses of the legislative Assembly, the Minister of Commerce, 3 members of the Commission on science and technology, business representatives, representatives of higher and secondary educational institutions. The Council is engaged in solving the most urgent problems related to the innovative and scientific and technical development of the region (Feldman & Low, 2018).

For several decades, the institutional and organizational structure of the Research Triangle has been built, which currently has the following form (Figure 1 )

Figure 1: Institutional design of the research triangle
Institutional design of the research triangle
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Thus, summing up the research, we can conclude that in order to create and successfully develop a cluster like the Research Triangle, it is necessary to meet a number of factors presented in table 2 , among which an informal institution is important, which is reflected in a high level of social responsibility.

Table 2 -
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The crucial element of the Research Triangle's success was the institutions factor. The correct formal institutional structure of innovative entrepreneurship determined the success of the Technopark and contributed to the formation and development of effective informal rules among the project participants. Building a productive regional innovation system has become possible due to the presence of incentives and motives for each of the subjects in active interaction with each other.

The most important point is that the state leadership was able to identify and implement the main priority areas of innovation policy that meet the needs of the time, as well as to focus efforts and attention on individual industrial sectors that meet global trends, the development of which determined the intensive type of economic growth in the region.

Also, one of the features of the management structure of scientific and technological development in the state of North Carolina is the active participation in the management process of scientific organizations and universities. Their involvement in the development and implementation of innovation policy confirms the establishment of close interaction between science, government and business. The state determines the main vectors of science development, and science in turn responds to the requests of the state and the real sector of the economy.To generalize, it should be noted that the state administration of North Carolina has developed clear priorities, effectively distributed powers, and eliminated duplication of functions.

Thus, the country has a high level of public authorities' reputation, particularly determined by stable organizational and financial support for scientific and technological development. This allows potential innovative investors to implement long-term planning horizons. The study of the established institutional structure for managing technological development in this region over the years clearly shows that it is necessary to observe continuity in the formation of formal institutions for its greatest effectiveness.


The paper was prepared as part of the research plan of the Ufa federal research center of the Russian Academy of Sciences on the state order of the Ministry of Science and Higher Education of the Russian Federation.


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16 April 2021

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Cite this article as:

Shestakovich, A. (2021). Innovation Management In The Region-Foreign Practice. In E. Popov, V. Barkhatov, V. D. Pham, & D. Pletnev (Eds.), Competitiveness and the Development of Socio-Economic Systems, vol 105. European Proceedings of Social and Behavioural Sciences (pp. 900-908). European Publisher.