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VC, Antifragility & Collaborative Innovation

Collaborative Innovation Blocs & Antifragility

by Niklas Elert and Magnus Henrekson (Research Institute of Industry Economics)


In this paper the authors present the theory of the collaborative innovation bloc (CIB), an evolving system of innovation within which activity takes place over time.

If an economy has multiple Collaborative Innovation Blocs (CIBs) that are robust or antifragile => supersystem also likely antifragile.

A number of heuristics make it possible to assess whether a CIB is antifragile:

  1. VC financed

  2. Collaborative

  3. Flexible/decentralised organisation

Government policies that enable the emergence of such a beneficial situation are generally indirect, targeting the institutional underpinnings of CIBs rather than attempting to create CIBs and clusters from the top down.

Drawing on the Swedish experience, the paper highlights seven institutional areas of particular importance for antifragility:

  1. though all industries are subject to politically determined institutions, the direct involvement of public actors and private-public entanglement should be limited due to its distortive impacts on CIB activity.

  2. the rule of law and property rights protection should be sufficiently stable to protect people’s expectations but permit innovation and be sufficiently flexible to evolve when challenged by stressors.

  3. the tax system should avoid artificially skewing resources in a particular direction and be characterized by neutrality vis-à-vis owner categories, sources of finance, and types of economic activities.

  4. the savings system should not only channel available savings into the reproduction and growth of the existing capital stock but also make funds available to new, innovative ventures.

  5. markets should be contestable, with low entry and exit barriers making it possible for newcomers to challenge the status quo in a stressor-like manner.

  6. the labor market and social security system should be characterized by flexicurity and avoid punishing individuals who leave secure, tenured employment positions to pursue entrepreneurial projects.

  7. the educational system should provide everyone with a robust and stable knowledge base without isolating or eschewing free-thinkers, rebels, and other people of an entrepreneurial mindset.



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