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Assess whether innovation within the financial sector has been a contributory factor in the current banking crisis.
Abstract
The main features of innovation systems are closely related to economic structure, cultural backgrounds and social systems, and it has deep roots of economy historical. Innovation is the main momentum to promote long-term economic growth; however, innovation is the process of knowledge development which requires the continuous accumulation of knowledge. The vast majority of the innovations are results of knowledge interaction of different organization. Three main components of innovation process are the generation of knowledge and technology, dissemination, and development. This national innovation system includes: resources and technological innovation, the R & D operation of the Fund, as well as the innovative policy and so on.
This paper will make a brief analysis of Assess whether innovation within the financial sector has been a contributory factor in the current banking crisis., and to what extent 'systems views' of innovation are useful in helping policy analysts to understand different financial sector contexts, to what extent they also are useful for guiding policy makers of financial sector in designing and evaluating public policy which could contribute to the current banking crisis but they have some weaknesses.
1. introduction
1. 1 the definition and analysis of innovation systems
The concept of innovation system is to research, develop, adapt, copy and use some new technologies in some special fields. (Dosi G, 1998) This innovation system is a net system of various organizations in the economyhttp://www.ukassignment.org/daixieAssignment/daixieyingguoassignment/ system, and it is directly related to the organization which is responsible for coordination and support to create, disseminate and apply technology knowledge.
Intellectual roots of’ systems views' of innovation of Production and knowledge dissemination is an attempt to understand the complexity of innovation process over the past few decades. (Ferrer, M, 2004), we can see two characters of the process from this analysis. The first is that innovation is in fact the result of the interaction of many factors, including companies, universities and research associations.
The second feature of innovation is that it is not a straight line to comply with, and it is not the process which begins from the research and is through the development, design, engineering and production in order to successfully produce new products. Innovation includes long-term cycle role of the various stages.
Another important characters of innovation system is that innovation system can be applied to different levels of economic, depending on whether you analyses the problem at the global, regional, national or local.
International experience has proven that the concept of innovation system is based on the following facts: the successful implementation of innovation requires a series of the organization and practice. The core organization is that organization in the economy sectors, Such as companies, farms where knowledge turns into commercial products, services, and wealth. (Soete L, 1998) #p#分页标题#e#
Other institutions is also very important to smoothly run the innovation system, these institutions includes science and technology organizations, universities, research institutions and public R & D organizations as well as the Office, the public and private investment which provide the basic infrastructure for innovation system. In addition, they all run based on a set of "rules of the game”, these rules can be formal policy, regulatory, legal, or informal practices, norms and procedures. (Arnold E. and Bell M, 2001)
1.2 The role of innovation and entrepreneurship
Innovation and Entrepreneurship is a sense of community related modern sense with personality. Entrepreneurship is innovation activity the businesses looking for opportunities, and strategic management is activity of the enterprises competitive. Each enterprise has unique entrepreneurial spirit, which often is formed with simple and philosophical language through the Song of the plant, factory training, factory regulations, and the plant image and so on.
Generally the entrepreneurship is a common consensus, inner attitude of the whole enterprise which can arouse the enthusiasm of employees, and enhance the vitality of enterprises.
2 The case study
2.1 The relationship between the innovation of financial sector and policy
to what extent 'systems views' of innovation are useful in helping policy analysts to understand or compare different contexts, for example, it can show what is a certain lack and what has been uneven and distorted in the existing system of innovation in the country.
As analytical tools, 'systems views' of innovation of financial sector can also be used to identify prohibitively which is responsible for the establishment and smooth running of the policy. (Edquist C , 1997),and is illustrative for policy-making and policy analysis according to different contexts, (Galli, R.and Teubal M, 1997) for example, considering whole innovation form the systems view, this approach will help to guide policy innovation, and policy creativity is committed to resolve economic system problem in country.
According to the ‘systems views' of innovation, it is clear to understand the policy of different financial sector with different contexts. With the improvement of foreign technical capacity, policy measures should be more concerned about the increasing research and development capability, particularly with the local demand-related economy sectors, higher education organizations (such as universities), research and development Capacity of public research laboratories. Of course, In particular, obstacles which affect to establish innovation are different between the poor areas and the more developed countries (Hou C. M. and Gee S, 1996), As a result, establishing innovation system in different conditions is very important to understand and compare the implementation of public policy of different nations.
To what extent 'systems views' of innovation also are useful for guiding policy makers in designing and evaluating public policy. The value of the 'systems views' of innovation is to make us understand knowledge generation, dissemination and application of the whole process, as well as the influence to economic and social development. In this system, all researches, development, technology and innovation activities and organizations in economic system can be seen as a single entity, regardless of the system involved in a country, region or a certain sector of a country. (Intarakamnerd P and P.-a, 2002) In addition, all of the systems include many feedback loops, and the various relationships between organizations; therefore, each the elements of the system are very important for policy-making, what is more, the two systems are also interactive. #p#分页标题#e#
There are a variety of ways that 'systems views' of innovation guides policy-policy. First of all, it is conducive to shift the policy focus from the individual organizations to the interaction of these organizations which involve the organization which engage in the knowledge production related to innovation, such as companies (users, suppliers or competitors), universities and research institutions. Other interactions include the policies making and policy evaluation (Liu X. and White S, 2002)
The second method which 'systems views' of innovation guide policy is to divert attention to the investment of science and technology, such as research and development activities transferring to the process and results of innovation, in other words, research and development activities is transferred to the special economic system and bring the new products and Methods.
Thirdly, the 'systems views' of innovation contribute to the policy focus from supporting the technology supply and demand to the interaction influenced between the knowledge request and production. (Thorsteinsdóttir , 2004). The value of this approach is also reflected in the recognition of its act of scientific research institutions and companies (such as universities, research institutions or technology center) influenced by a broader institutions and supporting units. For example, they can create incentives for the application of scientific research and technological results. ( Alcorta L. and Peres W, 1998).
Fourthly, innovation systems Stress policy analysis and innovative support interventions can be used in the different levels of the economic. For example, in rang of global and the national, regional, local, sectoral and technology. The system initially focus on national innovation system, but now the situation is changing, people pay more attention to other aspects of innovation system. And these are related, for example, the policy is made and implemented in the supra-national dimension, as supporting for science and technology projects in the framework of the European Union. At the same time, various forms of innovation, innovation activities of different business sectors require different policies.
Finally, with the 'systems views' of innovation, the police maker could transfer the focus of the analysis form the role of internal system of the economy (national, regional or a region) to the role of interaction with the outside world (Arocena, R. and J. Sutz,1999). For example, recently, the necessary knowledge of a financial sector innovation system often located outside of the country. Similarly, such as the WTO's “TRIPS”, such international institutions are affecting the member of the WTO with different policy and systems, mainly, those countries research and development policy making
2.2 The contribution of innovation within the financial sector in the current banking crisis
The World Bank Group president Robert (2008) said: "The global financial crisis with food and fuel may have caused the greatest harm to poor people in developing countries. The World Bank Group, International Monetary Fund, United Nations agencies, the regional development banks and other institutions provide the help for governments and the private sector through loans, equity investments, innovative new tools, as well as a safety net program. "#p#分页标题#e#
There are some innovation support of the financial sector and their contributions
Firstly, further strengthening the system and mechanism reform of finance sector could improve corporate governance. The crisis made the finance sectors truly understand the need on strengthening the system construction. For example, urging the board of directors of financial institutions to further improve its functions, scientific decision-making, reporting procedures, the scientific incentive mechanism and management process is the best way to deal with banking crisis.
Secondly, adhering to the strict supervision of cross-industry, cross-border which maintains appropriate isolation between the banking system and capital markets and plays the role of a firewall between the banking system and capital market could prevent risks transmission between the money market and capital market. If the two markets are not the appropriate firewall mechanism, the collapse of capital markets, will lead to serious consequences of finance sectors and endanger the fundamental interests.
Thirdly, strengthening the financial innovation can really play the role of financial innovation decantation, and resolving financial risks, at the same time, it did not only adhere to encourage financial innovation but also strengthen the scientific supervision, on the one hand, finance sectors innovate with new areas is encouraged and on the other hand, finance sectors innovate should be established with innovation principles, which adhering "cost counted, risk controlled, full information disclosure".
3 weaknesses of 'systems views' of innovation and recommendation
Firstly the financial policy based on ‘systems views' of innovation can not satisfied with the demand of different country with different development level and various organization, the policy should be fitted for stakeholders, because it is also important that those organizations which are responsible for the drafting and implementation of policy and government departments should ensure that these public policies can be implemented effectively. (Viotti, 2002), In addition, the development and implementation of these policies should not be a prerogative of government. Other stakeholders, such as companies, universities and research institutions are required to participate in policy making.
Secondly, in general, the network of 'systems views' of innovation is either weak or missing. (Nelson R, 1993) Network is a result of the interaction factors between the Organization, including the organization's ability to absorb and create, at the same time they also been stimulated by external policies, not only 'systems views' of innovation. Recommendation: public policy should focus on strengthening the knowledge demand of the economy field, and should support research and development investment in order to adapt to the needs in each stage of the development.
4 conclusions
In word, 'systems views' of innovation is able to provide us with a series of guidance, including the importance those pointed out the issue which have carrying out capacity-building in the commercial sector and supporting research institutions, as well as encouraging continuing exchange among research, development, engineering, so innovation within the financial sector has been a contributory factor in the current banking crisis.#p#分页标题#e#
Reference
Arnold M. and Bell E (2001), Some New Ideas about Research for Development, Oxford, 288-316
Alcorta L. and Peres W. (1998), innovation policy, 26: 857-881
Edquist G ( 1997), innovation system, London，342-364
Ferrer, G. (2004), the nature of innovation Vol. 22, 8-12
Dosi C, (1998) ', the Nature of the Innovative Process', 24-27
Galli, M and Teubal M. (1997) case anlysis of national innovation systems, 36-42
Soete G (1998), technology change and economic theory, London, p222
Arocena, J and R. Sutz(1999) industry innovation, p124
Viotti( 2002), Technology forecasting and social change, 69: 653-680
Nelson R. (1993) National innovation system, Oxford, 384-413
Intarakamnerd P and P.-a. Chairatana( 2002) innovation system of developing country 1421: 1-13
Liu X. and White S. (2002), technology policy 30: 1091-1114
Thorsteinsdóttir (2004), technology nature Vol. 22
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