Serempathy a new approach on innovation and its application to european union countries

Creative Regions in Europe:
Challenges and Opportunities

SEREMPATHY: A new approach on
innovation and its application to European
union countries

Miguel Ángel Pesquera
Pablo Coto-Millán
Pedro Casares Hontañón
Pablo de Castro

Barcelona, 6 may 2011 Southampton (UK), 22-23 march 2010
UNICAN Universidad de Cantabria. Departamento de Transportes. E. T. S. Ingenieros de Caminos. Avda. Los Castros s/ n 39003 Santander. SPAIN

Index of contents

01 The economic context: Crisis

02 Globalization: From Phronesis to Seremphaty concept

03 EU-15 Indexes for Human, Technological, and Serempathic
Capital

04 Serempathy and economic growth in Europe

05 Conclusions


A CRISIS of Globalization
Open Systems: more complex and more uncertain


Economist Robert Reich

 What will it look like? Nobody knows.
 All we knows is the current economy
can’t ‘recover’ because it can’t go back
to where it was before the crash.
 We should be asking when and how
the new economy will begin.


CRISIS Today: The Great Reset
Richard Florida

“The First Great Reset occurred
in the 1870's, the second
in the 1930's, and the third is
now under development”


CRISIS Today: MACROWIKINOMICS
Don Tapscott and Anthony Williams

“The world has reached a
critical turning point: reboot all
the old models ….Society has at
its disposal the most powerful
platform ever for bringing
together the people, skills, and
knowledge”


THE WISE LEADER
Ikujiro Nonaka and Hirotaka Takeuchi

“How CEOs can learn
practical wisdom to
help them do what’s
right for their
companies-and
society”

Harvard Business Review
May 2011


From Knowledge to Wisdom
 The origin of practical wisdom lies in the concept of
phronesis, one of the three forms of knowledge that
Aristotle identified.

 PHRONESIS is “a true and reasoned state of capacity to act
with regard to the things that are good or bad for man.”

 It is similar to:
 Japanese concept of TOKU, a virtue that leads a person
to pursue the common good and moral excellence as a
way of life.
 Indian concept of YUKTA, which connotes “just right” or
“appropriate.”


From Episteme to Phronesis

 EPISTEME, or universally valid scientific knowledge
is know-why

 TECHNE, or skill based technical is know-how.

 PHRONESIS is know-what should-be-done.


The Six Abilities of Phronetic Leaders
Nonaka and Takeuchi

1. Wise Leaders Can Judge Goodness.

2. Wise Leaders Can Grasp the Essence.

3. Wise Leaders Create Shared Contexts.

4. Wise Leaders Communicate the Essence.

5. Wise Leaders Exercise Political Power.

6. Wise Leaders Foster Practical Wisdom in Others.


WHERE IDEAS COME FROM
Kevin Kelly and Steven Johnson

“Why the best
environments for
creativity are
diverse,
colaborative and
tolerence of
failure.
WIRED Oct 2010”


WHERE IDEAS COME FROM
Kevin Kelly and Steven Johnson

 We should think of IDEAS as connections, in our
brain and among people.

 Ideas aren’ t self-contained things; they’ re more
like ecologies and networks.

 Ideas travel in clusters.


Coral reef as a model of innovation
Steven Johnson

 Ecosystems that form in the
portion near the coast that is
under a shallow depth water.

 Often called “rainforests of the
sea”, coral reefs form some of
the most diverse ecosystems
on earth.

 Vulnerable to certain natural
events, pollution,
sedimentation.


Coral Reef: Examples

 TWITTER: not to see what people are having for
breakfast, but to see what people are talking about,
the links to articles and posts.

 UNIVERSITY: As much as we sometimes roll our eyes
at the ivory tower isolation of universities, they
continue to serve as remarkable engines of
innovation.


INNOVATION: New Concepts

 SCENIUS

 Innovation doesn’ t come just from giving people
incentives; it come from creating environments where
their ideas can connect.

 The innovation comes from social scenes, from
passionate and connected groups of people.


SEREMPATHY: New theoretical approach to
innovation

 SEREMPATHY

 It is the combination of serendipity (which is achieved by
chance) and empathy (putting yourself in the other).

 Is "contact with luck, " the use of empathy for what
we want to randomly.


SEREMPATHY: The Power of Pull
Three principles

 Access people and resources where you need
them (Empathy).
 Attract people and resources you didn’t even
know existed (Serendipity).
 Achieve potential with less time and more
impact than you imagined possible
(Serempathy).


Pull Economy: The Power of Pull
John Hagel III, John Seely Brown

“The book's central premise is
that institutions will be
shaped to provide platforms to
help individuals achieve their
full potential by connecting
with others and better address
challenging performance needs.
This is greatly possible thanks to
the use of technology and
digital media.”


Human Capital: 5 indexes

 Doctorates per 1.000 population aged 25 to 64
(Human Capital 1).
 The number of graduate students per 1.000
population aged 20 to 29 (Human Capital 2).
 Population aged 25 to 64 with tertiary education
(Human Capital 3).
 Share for every 100 people in learning throughout
life between 25 and 64 (Human Capital 4)
 The number of young people aged 20 to 24 who
have reached secondary education level (Human
Capital 5)


European Indexes for Human Capital of the
EU-15

Rank Score Human Capital 1 Human Capital 2 Human Capital 3 Human Capital 4 Human Capital 5

1. Finland 8.2 6.9 7.4 10 7.6 9.0
2. Sweden 8.1 4.7 7.2 8.7 10 9.2
3. Denmark 7.7 8.7 2.9 9.4 10 7.4
4. United Kingdom 7.6 8.7 5.5 8.7 6.6 8.2
5. Ireland 7.1 9.9 3.6 9.3 3.4 9.2
6. Holland 6.3 6.2 2.9 8.8 5.6 8.0
7. France 6.5 9.9 4.0 7.5 2.4 8.8
8. Belgium 6.0 7.6 3.0 8.8 2.3 8.6
9. Luxembourg 6* n.a. n.a. 7.6 2.8 7.6
10. Portugal 5.6 6.7 10.0 3.9 1.8 5.7
11. Austria 5.4 3.8 5.3 4.9 4.4 8.9
12. Germany 5.4 4.6 5 6.9 2.6 7.8
13. Spain 4.8 4.4 2.1 8.0 3.4 6.3
14. Italy 4.4 4.8 3.0 3.9 2.1 8.0
15. Greece 4.3 4.2 1.6 6.2 1.0 8.6

SOURCE: EUROSTAT, 2009. * Information for Luxembourg is not available. The figure of 6 is the average of the data.


Human Capital European Index EU-15

SOURCE: Compiled from EUROSTAT, 2009


Human Capital: Results

 The leader countries in relation to the synthetic index of the human capital
are Finland, Sweden, Denmark and United Kingdom. Another three nations
– Ireland, Holland and France- also obtain very high scores.

 Two countries obtain the highest scores in doctoral programs (Human
Capital 1) – France and Ireland -, followed closely by Denmark and United
Kingdom.

 Two countries stand out in college graduates (Human Capital 2) – Finland
and Sweden -, followed by United Kingdom, Austria and Germany.

 Four countries – Finland, Denmark, Sweden and Ireland - are in top
positions in secondary education (Human Capital 3).

 Finland, Swede, Ireland, Austria and France lead the working population
between 20 and 24 years which finish the secondary studies (Human
Capital 5).


Technological Capital: 7 Indexes

 % of GDP in public expenditure in R&D (Technological Capital 1).
 % of GDP invested in new companies (Technological Capital 2).
 % of GDP of Private Credit (Technological Capital 3).
 Number of companies with 10 or more employees with broadband
access (Technological Capital 4).
 % of GDP of the total company expenses in R&D according to the
definitions of Frascati´s manual (Technological Capital 5).
 % of the GDP dedicated to Technology Innovation (Technological
Capital 6).
 % of the innovation expenses on the full business turnover excluding
the R&D expenses (Technological Capital 7).


European Indexes for the Technological
Capital of the EU-15
Tech Tech
Tech Tech Tech Tech Tech
Rank Score Capital Capital
Capital 1 Capital 2 Capital 3 Capital 4 Capital 5
6 7
1. Sweden 8.4 8.5 8.4 5.9 9.0 10.0 10.0 2.0
2. Denmark 8.0 7.1 2.7 10.0 8.1 6.9 8.4 1.5
3. Finland 7.9 8.2 4.9 3.9 9.3 10.0 8.9 n.a.
4. United Kingdom 7.1 5.5 10.0 9.6 8.8 4.4 9.2 n.a.
5. Holland 6.8 6.4 3.5 8.8 8.7 3.2 8.7 0.9
6. Germany 6.8 6.9 1.8 4.9 8.5 6.7 7.6 n.a.
7. Austria 6.7 6.8 9.9 5.4 7.7 6.8 7.4 n.a.
8. Spain 6.6 5.4 3.3 9.0 9.3 2.7 3.7 1.5
9. Ireland 6.4 4.1 1.3 9.9 8.4 2.2 4.5 3.3
10. France 6.3 6.3 3.1 4.9 9.3 4.6 8.2 1,0
11. Belgium 5.9 5.1 3.5 4.3 9.2 4.8 7.4 2.2
12. Luxembourg 5.4* n.a. 3.5 n.a. 8.8 4.8 7.4 2.7
13. Italy 5.0 4.8 1.0 4.8 8.2 2.2 4.5 3.3
14. Portugal 4.0 5.5 2.1 8.2 8.2 2.8 4.7 2.8
15. Greece 4.0 3.6 3.0 4.2 7.5 6.0 3.2 2.2

SOURCE: EUROSTAT, 2009. * The average data available for Luxembourg is 5.4.


Technological Capital European Index EU-15



Technological Capital results
 Sweden, Denmark, Finland and United Kingdom, are in first place in
the technological capital ranking, measured by the synthetic indicator.

 Seven other countries are reasonably well located in relation to the
Synthetic Indicator of Technology. These countries are Holland,
Germany, Austria, Spain, Ireland, Belgium and France.

 In the last positions of the technological ranking we find: Italy,
Portugal and Greece.

 In the global technology index, Spain occupies a middle position –8th-,
among the 15 countries considered, with scores very close to his
predecessors and ahead of Italy, Ireland, Belgium, France, Portugal
and Greece.


Serempathic Capital: 4 Indexes

 Sum of small and medium enterprises with innovation
activities (Serempathic Capital 1).
 Sum of small and medium enterprises with innovation
activities in collaboration with other companies and
institutions in the three previous years (Serempathic
Capital 2).
 Sum of the creations and destruction of small and
medium enterprises with more than five employees
(Serempathic Capital 3).
 Number of research publications carried out jointly by the
public and private sector (Serempathic Capital 4).


European Indexes for Serempathic
Capital of the EU-15
Serempathic Serempathic Serempathic Serempathic
Rank Score
Capital 1 Capital 2 Capital 3 Capital 4

1. Finland 7.7 8.8 10.0 0.7 5.3
2. Germany 5.8 9.9 3.3 5 2.5
3. Denmark 5.6 8.8 5.4 1.9 6.4
4. Austria 5.6 8.9 6.5 3.8 3.3
5. Holland 5.3 5.9 4.5 6.2 4.5
6. Ireland 4.7 8.4 4.3 5.32 1.1
7. Sweden 4.5 9.0 6.0 2.5 6.4
8. United Kingdom 4.3 6.6 6.6 3.9 0.1
9. France 4.2 6.1 4.2 4.6 1.8
10. Greece 4.1 7.1 4.8 4.1 0.6
11. Portugal 4.0 7.4 2.4 5.8 0.5
12. Luxembourg 2.9* n.a. 5.5 2.7 0.5
12. Spain 2.9 5.3 1.8 4.0 0.7
13. Italy 2.8 6.1 1.6 2.5 1.0
14. Belgium 2.6 3.3 1.4 4.1 1.0
SOURCE: EUROSTAT, 2009. * European Indicator for Luxembourg (2.9) has been obtained as the
average of the available data.


Serempatic European Index of the EU-15



Serempathic Capital

 Finland, Denmark, Austria and Holland occupy the top
positions. Meanwhile Germany, Ireland, Sweden and
the United Kingdom follow them closely.

 It should be noted that regarding the Serempathic
Capital, Spain, Italy and Belgium occupy the last
positions.

 The other countries are in an intermediate section.


Serempathic Capital: results

 European countries, particularly the Scandinavians, seem to
have a significant competitive advantage.
 Denmark is the leader in scoring, while Sweden, Germany,
Finland and Belgium scores also obtain very high levels of
global Serempathy.
 In a second intermediate group are Holland, Austria, Italy,
France and United Kingdom.
 Spain occupies the last place 15º, being surpassed by Italy,
Portugal and Greece, which as we have seen were at lower
positions in Human and Technological Capital.


Structure of relations between Human Capital,
Technological Capital and Serempatic Capital with the
Economic Growth

Throughputs
University
Nº Doctors

Human Serempatic Technological Output
Capital Capital
Nº Graduates Capital

Human Capital
Nº Secondary Schl Serempathy Innovation


The Model EU 15

Output=+β01 SerempathicIndex+ε0 (1)

Output=α+β11TechCap+β12Human.Cap+β13Seremphatic.Cap+ε1 (1´)

Troughputs=+β21Human.Cap+β22Tech.Cap+β23Serempathic.Cap+ε2 (2)

Tech.Cap.=+β31Human.Cap+ β32 Serempathic.Cap + ε3 (3)

Human.Cap=+β41Tech.Cap+β42Serempathic.Cap+ ε4 (4)


Estimation results for the first two equations
of the model
Output 1 Output 2 Throughput Output 2 Throughput

Explanatory Variables Equation (1´) Equation (1) Equation (1) Equation (1´) Equation (2)

8,772 3,330 -0,558 3,124 -0.123
Constant
(3,212) (2,616) (-0,299) (2,567) (0,892)

0,203
0,123 0,497
Human Capital - - (1,984)
(2,732) (2,184)

0,627
0,468 0,497
Technological Capital 3 - - (0,342)
(4,034) (2,184)

0,907
0,021 0,184
Serempathic Capital 4 (4,842) - -
(0,190) (1,346)

Serempathic Synthetic 0,384 0,913
- - -
Index (1,677) (2,719)

Data of the Estimation

Observatory 14 14 14 14 14

Statistical R2 0,872 0,435 0,617 0.784 0.714

Source: Personal Compilations


Estimation results for the third equation
of the model

Technological Technological
Capital Capital

Explanatory Variables Equation (3) Equation (3)

0,307 1,968
Intercept (1,442) (2,405)
0,314
Human Capital (2,431) -

0,310
Human Capital 3 - 2,477)

2,578
0,301
Serempathic Capital 4 (2,702)
(3,072)

Observation 14 14

Statistical R2
0,844 0,844

Results, equation 1, 2 and 3

 Serempathy explains well the Output and the
Throughput, as a Serempathic synthetic index as well as
with the three elements in which it´s divided: Human,
Technological and Serempathic Capital.

 The coefficient between the Human Capital 1 and the
Output is significant. The Technological Capital has a
direct effect over Output 1 and the Throughput, but not
over the Output 2, more related to the employment.
Serempathic Capital 4 is also significantly associated with
the Output 1 and 2, and with the Throughput.


Results, equation 1, 2 and 3

 The coefficient for Human Capital 1 is positively and
significantly associated with employment ant technology.
The first case is associated with the Technological Capital
and the second with the Serempathic Capital.

 Human Capital 1 acts indirectly on growth through his
interaction with technology. in combination and by means
of the technology to affect regional development through
productivity growth.

 Throughput can be reasonably explained by the three
key variables – Human Capital, Technological Capital and
Serempathic Capital.


Estimation results of the fourth equation of the
model (Production of Human Capital)

Human Capital 1
Explanatory Variables Equation 3
4,969**
Intercept
(8,087)
0,124**
Technological Capital 2
(1,412)
0,124**
Serempathic Capital 4
(1,827)

Data of the Estimation
Observation 14
Statistical R2 0,403
Source: Personal Compilations


Results, equation 4

 Technological and Serempathic Capital factors play a
significant role in the generation of Human Capital 1
(measured by the number of doctors per 1000
inhabitants).

 The two factors of generation of Human Capital are
strongly correlated with each other.

 To summarize, regions with lower barriers and more
technological and relational facilities for Human Capital,
more opened, have the characteristics required for
technological innovations.


Conclusions (1)
 With our databases of European countries we have found
empiric evidences that the Human Capital 1, particularly the
core which we have called university doctors, predicts better the
growth than other non-traditional measures of talent based on
others university and non-university educational levels.

 Collaborative relationships between University, Private
Companies and Public Administration are significantly associated
with the generation of Output 1 and Throughput.

 Human Capital is explained by means of Serempathic and
Technological Capital.


Conclusions (2)

 The analyze shows that the serempathic factors have a
positive and relevant role in the production of Human and
Technological Capital, and in the economic growth.

 The three factors of Human, Technological and
Serempathic Capital don´t operate in competition with
each other, but they tend to act playing complementary
roles in the economic growth process.

 The results obtained indicate that the structure of relations
between the previous factors and the Output of the
countries is of great complexity.


Only we need

 Discretionary
emotional energy
Passion, excitement,
enthusiasm, and
dedication.


Live in complex and uncertain contexts

speaking from the
mirror neuron
heart

+ =

=


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