Towards a Dynamic Regional Innovation System by Wenying Fu

Author:Wenying Fu
Language: eng
Format: epub
Publisher: Springer Berlin Heidelberg, Berlin, Heidelberg

4.3.1 Human Capital

In macroeconomics, many scholars argue that skill should be accumulated at a high rate when technology is imported from outside in order to support sustained growth (Michaely et al. 1991; Lall 1992; Keller 1996). However, human capital accumulation has been proved not to directly determine the economic growth rate (Benhabib and Spiegel 1994). Rather, it influences the economic growth by attracting physical capital accumulation and affecting the speed of absorption of technology (Nelson et al. 1966; Lucas 1990).

Individual talent is the basic element in an organization. Beyond the individual capacities, what is more important for an organization is the sum of the individual capability, or, put it in another way, a collectively organizational learning process that aims to rightly allocate individual capabilities to tasks and maximize them. In this respect, organizational routine and culture plays a key role in combining, managing and driving the mobilization of individual capability (Shein 2004).

Departing from this argument, I relate human capital to the capabilities of technical staff, managerial staff and entrepreneurs. For technical staff, they directly involve in production and technological innovation and their individual capabilities make up the core element of the cognitive structure of the firm. On the other hand, the managerial staff and entrepreneurs are responsible for the optimal allocation of individuals to tasks and also shoulder the role of gate-keeper for the organization.

Technical staff is the main actor to exchange the know-how with external partners to a large extent, because their knowledge in specific domain enables them to recognize and value new related knowledge (Carter 1989). Technical staff does not only play a role in acquisition process, but is also determinant in assimilation, transformation and exploitation process, because they are the main carrier of tacit knowledge through years of team work. By team work, I mean that it is not only the individual capabilities of the technical staff that matters for the learning process, but also the common recognition of organizational codes and technological routines.

The collective learning and knowledge creation process between the technical staff also relies on the managerial capability to allocate the individual capabilities. Human resource management has been applied to define this capability and it has been also proved to exert a positive impact on innovative performance (Michie and Sheehan 1999; Laursen and Foss 2003). Vinding (2006) goes further to support the positive relationship between human resource management and radical innovation. Managerial staff’s ability in fostering the organizational culture, optimizing the organizational structure and motivating the qualified staff is thus essential in regard to the assimilation, transformation and exploitation of external information and new knowledge. Moreover, they are also “boundary-spanning” actors between the departments and facilitate the transformation process of external knowledge within the firm (Allen 1977; Cohen and Levinthal 1990).

The human capital in the firm level does not only rely on the quality of the public educational system, but also on the internal development process. The public educational system mainly instructs generic knowledge that paves the way for the career development of graduates, and

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