Research on Evaluation of Regional Innovation System Environmental Risk

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Research on Evaluation of Regional Innovation System Environmental Risk
Research on Evaluation of Regional Innovation System
Environmental Risk
LI Huiyan, HUANG Ying
School of Management, Shenyang University of Technology, P.R.China, 110178
[email protected]
Abstract: This article mainly research on the environmental risk of region innovation system, according
to the type of risk, it analyze the risk factors including policy and law, society and polity, finance,
economy, human resource and infrastructure, ect. Based on this, it choose the main factors of each
environmental risk, put forward fuzzy comprehensive evaluation method for environmental risk of
regional innovation system combining AHP and the fuzzy evaluation method, making the actors of
innovation and policy constitutor can evaluate the environment risk of system in time.
Keywords: Regional innovation system, Environmental risk, Evaluation, Fuzzy
1 Introduction
Since the 1990s, with the development of knowledge economy and global integration, regional
innovative capability has been the key growth point of regional economy and the decisive factor that
regions gain the competitive advantage. The concept of regional innovation system (RIS) has gained
considerable attention from policy makers and academic researchers.
RIS is the innovation system existed within a certain space, its development cans not deviate from
stated regional environment. If RIS can operate smoothly not be decided by various factor and condition
of its oneself, but to a large extent by various exterior environment condition which contact with its
existence directly or indirectly, such as entironment, economy environment, social environment,
political environment and humanities environment, etc. These environment factors all have
indetermination, their varieties all may bring loss to RIS development. Therefore, it is completely
necessary to carry on comprehensive analysis and evaluation various environment factors of RIS. This is
the indispensable part of RIS risk research, and this is advantageous for the innovation actors to adjust in
time according to environment change, and contribute to keep validity of the whole RIS development
direction and strategic, implementing a stable and harmonious development sequentially.
Because of the succeed demonstration effects of RIS, RIS has already evolved into a widely used
analytical framework that generates the empirical foundation for innovation policy making. However,
RIS is not all prolonged, its potential risks can’t be ignored either. In resent years, although many
literatures devote great attention to RIS, there is little work probing the risk of RIS. So the risk of RIS is
a new subject of RIS which is worth studying and exploring.
2 The meaning of RIS risk
RIS is typically understood to be a system to reinforce regional innovative capability which is
based on interactions between different actors (firms, universities, organizations, research institutes,
governmental institutions, ect.) within the region. From the systemic point of view, RIS facilitates the
flows of innovative resource which not only reinforce the innovative capability of different actors, but
also constitute the most important process driving the evolution of the region.
As a kind of open social dynamic system, RIS faces various risks by all means. The RIS risk means
the inconformity between operational result and original objective of system caused by regional exterior
environment indetermination, operational complexity of the system and innovation actors oneself reason.
That is, the possibility which may cause system decline or failing.
In general, the representation of result caused by RIS risk mainly has the following kinds: Firstly,
the efficiency of innovation system operation is low, can not promote the regional innovation and
economy development and reach the expected objective; Secondly, the operation of system can not
facilitate the development of innovation actors, but likely to endanger itself advantage instead; Thirdly,
the risk can case the decline and even disaggregation of innovation system.
3 The RIS environmental risk and its component factors
As an open dynamic system, any RIS all have to operate under the stipulation of a certain system,
law, politics, market, social culture, education and international environment etc., the movement of
external environment influences the composing, structure and operation of RIS on the different degree,
even has decisive and dominant effect to the system. These indetermination factors that exist in RIS
exterior and may case RIS decline compose the RIS environmental risk.
3.1 Policy and law risk
The policy and law risk means the indetermination which the transform of policy, law, system, etc.
brings to RIS. The government policy and law involve in every aspect, including policy direction and
law adjustment, programming alteration and industry policy regulation, ect. caused by macroscopically
control or system reform, these will bring very big impact to development and movement of RIS. In
addition, in our country, some policy and law hasn't yet be sound, one of the results is the government
adopt the direct administration measure directly to interfere RIS operation, although the intervention of
government can make up market failure to some extent, the government sometimes also exists disabled
phenomenon and cause RIS deviation.
3.2 Social and political risk
The social and political transform will bring profound influence to the economic development of
the whole nation and it is impossible for RIS as a part of economic development to be free from its
influence. The social and political risk includes two types. One is political risk, mainly mean the
possibility of RIS decline because of political variety and include the factor as political situation variety,
political power substitution, etc. Another is social order risk, mainly mean the RIS loss caused by social
problem or social unsteady and include behaviors which threaten the social normal order such as heist or
breakage, social abrupt affairs such as strike or rebellion which lead to social disorder and influent RIS
3.3 Financial risk
The financial risk means the indetermination which the factor of finance or capital market brings to
RIS development. At present, most technology innovation, especially that of high-tech industry, demand
a great deal of funds devotion, although the innovation cooperator can share the high expenses which
R&D needs, it is still necessary to depend on exterior funds to a large extent, such as the risk fund, bank
loan, and other financial tools, all these are exactly the source of financial risk. For example, the
increment of the bank interest rate will make the enterprise funds cost increase, the enhance of the
innovation cost exchange rate will then cause the fluctuation of foreign capital investment and add the
indetermination of foreign trade. The motion of stock market may bring funds difficulty to enterprise
which financing through the stock market. In addition, the world or local financial crisis risk even can
bring direct damage to the whole RIS, breaking the internal capital flow and cause the decline of the
innovation system.
3.4 Economy fluctuation risk
The economy fluctuation risk is caused by the periodic fluctuation or short-term trend alteration of
macroeconomy. Various economy phenomenon will affect RIS more or less. For example, in
microcosmic view, the enterprise will lose the interest of investment to develop new products as
economic recession, the government generally will tighten the money supply as inflation and make
enterprise innovation and R&D funds be subjected to restriction, all these impact RIS development. In
macroscopical view, the motion of economy will not only affect the enterprise and result in irregular
operation, but also impact the whole industry and may bring great loss, leading the vitality of industry
group weaken and the economy of the group area depression, and then bring disadvantageous influence
for RIS which focus on the industry group.
3.5 Human resource risk
The core essence of RIS is innovation, regardless product innovation, process innovation to even
management innovation can not disengage from the people who master knowledge and technology. The
talented person is one of the decisive factors for RIS operate steadily. Whether human resource enriches
or not, whether it can be developed fully and effectively or not, have important influence to RIS
development. Although the positive development of RIS will attract the elitist, the disadvantageous
factors which occur in human resource aspect will still cause RIS decline. These factors include
illogicality of human resource structure, shortage of talented person supply, obstruction of talented
person flow and distemperedness of talented person labor ensure system, etc.
3.6 Infrastructure risk
The development of RIS profits from the intercommunion of the factors such as knowledge,
information and personnel, etc., the formation of this kind of communicate network can not get away
from the infrastructure within the regional, such as transportation and communication network. Whether
these infrastructure factors are self-contained and complete directly relating to the innovation actors
enthusiasm and the innovation activity expansion. Infrastructure risk means the disadvantageous
influence which imperfect infrastructure brings to RIS development. This risk also includes natural risk,
it is the system indetermination caused by various natural disaster such as earthquake, Ground Sea, etc.
which break the infrastructure in RIS. In addition, the depravation of natural environment will also
influence the development of innovation system gradually.
4 The fuzzy comprehensive evaluation for RIS environmental risk
The evaluation of the RIS environmental risk has very strong faintness. In the first place, the
theories field has not yet a unified definition for environmental risk, as to its component factors also has
not yet a unified system, this is the faintness of the concept itself. Secondly, because of the complexity
of risk, there are many indetermination impact factors and of these factors may take place connection
mutually, and in the meantime the influence degree of these impact factors to loss is nonlinearity and
dynamic, making the evaluation can't confirm the probability risk affairs through effective statistics data
and also can't estimate directly and accurately the serious degree after its occurrence. This is the
faintness of the impact factors. Therefore, we can adopt multilayer fuzzy comprehensive evaluation
method to estimate RIS environmental risk.
4.1 To establish the index system
According to the above analysis of environmental risk, we can divide the environmental risk into
six structural indexes firstly, suppose structural index set U = {U 1 , U 2 , U 3 , U 4 , U 5 , U 6 } ,
U1 , U 2 , U 3 , U 4 ,U 5 ,U 6 denote policy and law risk, social and political risk, financial risk, economy
fluctuation risk, human resource risk and infrastructure risk. The analytic index of each structural index
is shown in table 1. That is, U 1 = {u11 , u12 , u13 , u14 } , U 2 = {u 21 ,u 22 } , U 3 = {u 31 , u 32 , u 33 , u 34 } ,
U 4 = {u 41 ,u 42 }, U 5 = {u 51 , u 52 , u 53 }, U 6 = {u 61 , u 62 , u 63 } .
4.2 To confirm the comment set
The comment set means all possible remark to evaluation object. Based on the practical instance
and the demand of environment risk management, we divide each index into several grades in term of its
exhibition degree, the comment set V = {v1 , v 2 , v 3 , v 4 , v5 } , the corresponding grade which
v1 , v2 , v3 , v4 , v5 represents is “highest”, “higher”, “common”, “lower” and “lowest”.
4.3 To build up the weight set
In the comprehensive evaluation, the weight indicates the important degree of each index in the
whole index system, whether the weight is reasonable or not directly affect the accuracy of evaluation.
Because various factors in various environment risks has different effect on evaluated index, and there is
the dissimilarity of risk preference, so the understanding and evaluation of different decision maker is
also different even to the same risk. Therefore, we can adopt AHP method to separately array the
weightiness of each structural and analytic index, and give relevant weight according to the influence
degree and importance of each index and decide the each layer index weight set. Suppose the weight set
of structural index is A = {A1 , A2 , A3 , A4 , A5 , A6 } , the weight of each analytic index is
Ai = {ai1 , ai 2 ,L aij }, i = 1,2,L6 , j is the number of analytic index in structural index U i .
Table 1 The evaluation index system of RIS environment risk
structural index
analytic index
(u )
implement degree of policy and law( u )
stability of policy and law( u )
correspondence degree of policy and law( u )
stability of politics( u )
orderliness of society( u )
capital market scale( u )
standardization of capital market( u )
diversity of financing channel( u )
feasibility of financial crisis( u )
economy prosperity exponent( u )
stability of economy development( u )
rationality of human resource structure( u )
fluidity of talented person( u )
talented person labor ensure system( u )
maturity of infrastructure( u )
harm of natural risk( u )
comfort degree of natural environment( u )
maturity of policy and law
(U )
policy and law risk
the evaluation index system of RIS environment risk
(U )
social and political risk
(U )
financial risk
(U )
economy fluctuation risk
(U )
human resource risk
(U )
infrastructure risk
4.4 To apply fuzzy comprehensive evaluation
4.4.1 To establish fuzzy evaluation matrix
We can evaluate each layer index in turn based on the established comment set V through Delphi
method and obtain the degree of membership rijt , rijt = mijt / m , m is the number of evaluate experts,
mijt is the number of the experts who consider index u ij fall into grade vt , the fuzzy evaluation
matrix is Rt :
ri11 ri12
r r
i 21 i 22
Rt = 
rij1 rij 2
ri13 ri14 ri15 
ri 23 ri 24 ri 25 
rij 3 rij 4 rij 5 
4.4.2 The first grade evaluation
The first grade evaluation is to evaluate each analytic index in structural index, obtain the first
grade fuzzy evaluation matrix Bt combine with the weight of each analytic index:
 ri11 ri12
r r
i 21 i 22
Bt = At o Rt = (ai1 , ai 2, L, aij ) o 
 rij1 rij 2
ri13 ri14 ri15 
ri 23 ri 24 ri 25 
= (bi1 , bi 2 ,L, bi 5 )
rij 3 rij 4 rij 5 
The operator “ o ” can choose several types, we use the type M (•,+ ) , that is, bit =
(i = 1,2,L,6;t = 1,2,L,5) .
∑a r
ij ijt
j =1
4.4.3 The second grade evaluation
The second grade evaluation is to evaluate each structural index, using Bi as single factor
evaluation of U i , and the fuzzy comprehensive evaluation matrix is:
 B1 
B 
R =   = (bit )6×5
M 
 
 B6 
Therefore, the second grade fuzzy comprehensive evaluation set is:
B = A o R = (b1 , b2 ,L, b5 )
bt = ∑ Ai bit
(t = 1,2,L,5)
i =1
4.4.4 To dispose evaluation index
By fuzzy evaluation, we get a fuzzy vector B = b1, b2 , L, b5 , bt (t = 1,2,L5) represents the
degree of membership of RIS environmental risk to the comment vt . Finally, we give the value
β t to
different comment vt and consider the degree of membership bt as the weight, and then we can get the
total evaluation score of RIS environmental risk:
t =1
t =1
β = ∑ btk β t / ∑ btk
In general, k = 1, 2 . Thus, we can know the grade of RIS environment risk.
5 Conclusion
Although the fuzzy comprehensive evaluation method resolve some problems in RIS
environmental risk evaluation, it is necessary to pertinently regard the existence and change of these risk
factors because of the high complexity and relativity of the RIS environment. We must apply various
management method, technology and measurement reasonably to evaluate RIS environmental risk more
objective and scientifically.
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