Canada's Ocean Supercluster initiative: A national policy in regional clothing?

Since the late 1980s, there has been no explicit regional policy in Canada. Indirectly, though, equalization payments, industrial policies, as well as regional agencies encouraging the adoption of federal industrial and innovation policies, impact regional economies. In 2017, the federal government appeared to alter its approach: the Supercluster initiative was announced, drawing upon the idea that localized networks of interrelated firms can generate innovation and local development. In this paper, we discuss the mechanisms through which spatially focused industrial innovation policy can lead to regional development. We then focus on Canada's Ocean Supercluster initiative. The question we address is as follows: to what extent can this initiative (and, more widely, Canada's Supercluster policy) be understood as a regional development strategy driven by a coherent rationale for regional intervention? Apart from the fact that each Supercluster focuses on a pre-existing core of firms located within a region, there is little evidence that the Supercluster initiative has regional development objectives or impacts.     

The Role of Regional Policies in Promoting Networking and Innovative Activity: Evidence from Small Finnish High-tech Firms

The success of high-technology firms is strongly dependent on their innovation capacity and network relationships. There is a growing recognition that few firms are able to innovate in isolation. Cooperation can provide access to a complementary knowledge base and resources, and speed up the innovation process of firms. Regional developers are criticized for their inadequate ability to integrate themselves into the regional networks and innovation processes of firms and their ability to determine firms' needs for innovation and networking. The research topic of this study concentrates on the possibilities of regional developers of influencing the operational environment of high-tech firms through the development of networks and innovation activity of firms. Of particular interest are the micro-level policies and concrete actions by regional developers for meeting the needs of firms. The data used are based on interviews addressed to high-tech firms located in Jyväskylä Science Park in Finland.     

Firm Performance,Innovation Modes and Territorial Embeddedness

This paper seeks to identify different innovation modes and their territorial embeddedness, relating them to firms’ innovative and economic performance. We also analyse the relationship between the different innovation modes and the economic impact of the crisis on firms’ performance. These relationships are tested by regression and latent class models for the Portuguese population of firms, using a sample of 397 firms classified according to technological intensity, size and region. Our results show three different innovation modes: a DUI (Doing, Using and Interacting) mode, an STI (Science, Technology and Innovation) mode and a TEI (Territorial Embeddedness Innovation) mode in which territory plays a key role. These innovative modes are related in different ways to firms’ economic and innovative performance and also have marked distinctions in terms of resilience to the economic crisis. These findings lead to a reflection on regional innovation policy in the European context.     

Innovation,knowledge and relations – on the role of clusters for firms’ innovativeness

ABSTRACT

For more than two decades, theories on regional clusters have inspired economic and structural policies at the European, national and regional levels. Based on the assumption that clusters generate innovation, policy-makers at all levels of governance have adopted instruments and mechanisms to stimulate, resource and sustain clusters. Despite the considerable attention paid to the clustering phenomenon, empirical evidence on to what extent firms’ innovation activities benefit from operating in clusters is scarce and inconclusive. This paper contributes to the micro-foundation of clustering effects by examining the characteristics and activities of cluster firms in relation to their innovativeness. Bridging innovation, management and cluster theories, it is argued that structural and relational embeddedness, relational capital and absorptive capacity influence clustered firms' innovativeness. Partial least-squares structural equation modelling of data from 104 firms in two software and information technology service sector clusters reveals that firms’ structural embeddedness (i.e. frequency of interactions) in clusters and external networks facilitates innovation cooperation. Firms’ absorptive capacity reinforces this positive effect of cluster-internal interactions on innovation cooperation. Results also suggest a substitution effect of trust as relational control mechanisms for formal control mechanisms within the cluster. However, the study finds no significant impact of firms’ innovation cooperation within the cluster (i.e. relational embeddedness) on their innovation success.     

The Creative Industries,Creative Occupations and Innovation in London

London is a global hub of the creative industries. These industries are seen as both innovative in themselves and an input in innovation processes in other sectors. Yet few studies have tested these relationships. This article investigates these issues using large-scale survey data for London. Using four measures of product and process innovation, we find no evidence that London's creative industries are more innovative than other sectors. Yet, individuals doing creative occupations in other sectors are a robust driver of product innovation in London's firms. The results suggest that occupations performed in London may be an important driver of product innovation in the city, and firms in other sectors may use creative occupations to develop new products in the capital. This finding is supportive of policies attempting to stimulate the creative industries by integrating creative occupations into firms across the whole economy.     

HOTELLING'S “MAIN STREET” WITH MORE THAN TWO COMPETITORS*

ABSTRACT. I analyze oligopolistic competition among three or more firms located on Hotelling's (1929) Main Street and show that in contrast with Hotelling's duopoly, the symmetric locational structure supports a noncooperative equilibrium in prices. However, in a two-stage game of location choice in the first stage, and price choice in the second stage, there exists no subgame-perfect equilibrium where the whole market is served. This is because, starting from any locational pattern, firms have incentives to move toward the central firm. This strong version of the Principle of Minimum Differentiation destroys the possibility of a locational equilibrium. The results are a direct consequence of the existence of boundaries in the space of location. The sharp difference between these results and those of the standard circular model (whose product space lacks boundaries) shows that the general use of the circular model as an approximation to the line interval model may be unwarranted.     

Does Combinatorial Knowledge Lead to a Better Innovation Performance of Firms?

The knowledge base concept in the past was often applied in its “pure form”, i.e. it was assumed that there are dominant knowledge bases in particular sectors and firms shaping knowledge and innovation processes and related networks. For “analytical sectors” such as biotech, it has been argued that codified knowledge generated by universities and R&D organizations is the key for innovation, whereas “synthetic sectors” such as machinery innovate more incrementally by recombining existing knowledge often drawn from suppliers or service firms. Empirical literature has partly confirmed these patters, but also shown more complex knowledge processes. More recently it has been argued that combinations of different knowledge bases might enhance the innovation performance of firms. For example in “analytical sectors”, firms might benefit not just from new and basic knowledge generated by research, but also from recombining existing and applied knowledge or by drawing on symbolic knowledge. Combinatorial knowledge bases might also be relevant for “synthetic” and “symbolic sectors”, but in different forms. This study investigates for the ICT sector in regions of Austria if the reliance on combinatorial knowledge leads to a better innovation performance than the use of more narrow knowledge bases.     

Intended Ties with Local Institutions as Factors in Innovation: An Application to Spanish Manufacturing Firms

In this paper we seek to check for a number of interactions between firms and the external environment. We aim to contribute to the discussion on the role of the regional environment in a firm's innovation performance. We test the statistical significance of a number of particular interactions between institutions and firm innovation. In particular, we have hypothesized the association between trade and professional institutions, technological centres, and cooperation arrangements and innovation. In contrast with existing studies, we have provided empirical evidence of the impact of external factors on individual firms.     

Learning in districts: Novelty and lock-in in a regional context

This paper deals with the constraints and risks of learning in different types of spatial concentration of related industries and firms. We aim at a better understanding of what makes the difference between local lock-in on the one hand and ongoing creation of novelty on the other. To achieve this purpose, we use Nonaka and Takeuchi's (1995) treatment of knowledge conversion processes and Nooteboom's (2000) cycle of discovery. Hence, we are able to clarify the concept and nature of learning, which in turn provides a basis for specifying different learning effects of two prototypes of spatial concentration: Marshallian and dynamic industrial districts. We show that these two types of industrial districts have multiple, different, and complementary functions in terms of knowledge conversion and knowledge creation. Hence, we can explain why spatial concentration can have positive and negative effects for learning and innovation, and how lock-in can be avoided.     

The Role of Leading Firms in the Evolution of SME Clusters: Evidence from the Leather Products Cluster in Florence

Clusters that emerged in the past have changed during the latest decades, so that today the research challenge in economic geography is on their evolution over time. The aim of this paper is to update the evolutionary path of SME Italian clusters, which faced the economic crisis are undergoing a process of decline in the number of firms. Furthermore, changes in the techno-economic landscape and in the competitive environment have generated new challenges. In this context, some leading firms, able to connect local resources (and firms) to global networks, have emerged over time and today they act as a gatekeeper. The focus will be on local networks interacting with leading firms and particular attention will be devoted to the pattern of co-evolution and to the geographical dimension of this co-evolutionary process. To empirically verify if other firms in the cluster may co-evolve with the leading firm over time, a deep analysis of the Gucci network in the leather products cluster in Florence will be carried out.     

Export-led Technology Development in the Four Dragons: The Case of Electronics

To date, little attention has been paid to the strategies of local firms in bringing about industrialization in Bast Asia. This article focuses on the methods by which domestic firms utilized foreign connections to overcome technology and market barriers in electronics. A simple market-technology model is developed as a first approximation of how domestic technology assimilation relates to export marketing in the four ‘Dragons' of East Asia (South Korea, Taiwan, Hong Kong and Singapore). It proposes that export demand shaped the pace and pattern of technological progress in electronics in each of the four Dragons. Historical evidence shows that each country used a distinctive mix of direct and indirect export mechanisms to acquire technology and to enter international markets. Foreign buyers, transnational corporations (TNCs), original equipment manufacturer (OEM) arrangements, joint ventures and licensing deals were exploited by ‘latecomer’ firms to their market and technology advantage. Asian firms progressed from simple assembly tasks to more sophisticated product design and development capabilities, travelling ‘backwards' along the product life cycle of traditional innovation models. Today, leading Asian firms invest heavily in R&D and engage in partnerships with TNCs to acquire and develop advanced new electronics technologies. The technological progress of latecomers remains closely coupled to export demand through OEM and other institutional arrangements.     

Networks and Innovation: The Role of Social Assets in Explaining Firms' Innovative Capacity

The claim of a positive association between a firm's social assets and its innovative capacity is a widely debated topic in the literature. Although controversial, such an argument has informed recent innovation policy across Germany, increasingly directed to the cluster formation. In the light of the growing attention and financial efforts that cluster-based innovation policies are receiving, it is worth answering two main questions. First, are firms with a relatively high level of social capital likely to be more innovative? Secondly, do companies pursuing innovation in partnership innovate more? This paper empirically answers these questions by exploring a cross-sectoral sample of 248 firms based in the Jena region. On the one hand, the extent to which a firm is integrated in its community life does not contribute to an explanation of its innovative performance. On the other hand, directed cooperation with the specific goal of innovating shows a positive impact on innovative performance. However, the correlation between the extent of the network of co-innovators and firms' innovative capacity presents an inverted U-shaped relation: there is a threshold in the number of co-innovators justified by the costs of innovating by interacting. A policy lesson can be drawn from these findings: cluster-based policies are to be treated with caution as firms face costs of networking and not merely benefits.     

The Role of Knowledge Intermediaries in Developing Firm Learning Capabilities

Regional innovation systems (RISs) literature has emphasized the critical role of interactive learning and knowledge exchange amongst firms and a variety of spatially connected innovation institutions as the foundation of regional innovation. Knowledge intermediaries have been analysed in terms of the technology-transaction services they provide firms and/or knowledge producers such as universities and therefore the role they play in facilitating interaction within the RIS. However, innovation also depends on the capability of the firm to learn. Some studies have suggested that intermediaries also play a role in that regard as participation in intermediary knowledge transfer programmes can contribute to the development of firm capabilities for problem-solving and learning. Our research is based on two case study intermediary programmes involving interviews with facilitators and participants. Our data show that knowledge intermediaries affect organizational learning capabilities by impacting on firms' network relationships, internal and external communication channels and internal learning processes which in turn affect the ability to interpret and use knowledge within the firm. This suggests that the role of knowledge intermediaries might be greater than facilitating interactions in the innovation system, as knowledge intermediation may affect the ability of firms to learn and absorb knowledge from their environment.     

Developing cross-industry innovation capability: regional drivers and indicators within firms

ABSTRACT

The role of firms in the process of regional renewal and path development is a somewhat neglected area in the existing literature. With few exceptions, the literature is mainly concerned with aggregated development paths. To cover this gap, the current study turns its attention to cross-industry innovation capability (CIIC) building in firms and discusses how conditions for innovation and learning in a region drive this process. We introduce a new concept of CIIC – that is, the firm’s ability to transform knowledge and ideas from different industries into new products, processes and systems and/or its ability to adapt existing products, processes and systems to new industries – and identify its drivers and indicators. The discussion is supported by empirical studies of firms in three Norwegian case regions that undergo the restructuring process due to the recent severe decrease in oil prices. Our empirical data demonstrate that organizationally thick and diversified regions are more favourable for firms’ abilities to develop CIIC and cross-industry innovation activity. As a result, we emphasize that future regional policies should have a stronger focus on the linkages between internal firm characteristics and regional innovation systems to contribute to the firms’ absorptive capacity for developing cross-industry innovation.     

Auto-production systems in Japan: organisational and locational features

Through their highly controlled production systems Japanese auto-makers have succeeded to a considerable degree in extending the basic principles of modern factory production–specialisation and timing–to regional space. Thousands of firms, large and small, hierarchically connected in subcontracting layers supply a myriad of parts and engineering services to the auto-makers. Automakers minimise the level of stocks of parts at their plants by requiring their direct suppliers to make frequent deliveries. These firms function as extensions of the auto-maker's plant with the result that the regional production system functions with precision approaching that of a single well-organised factory.     

Networks Mobilized to Access Key Resources at Early Stages of Biotech Firms: A Comparative Analysis in Two Moderately Innovative Countries

This paper investigates the networking behaviour of biotechnology start-ups in peripheral locations. The aim is to understand whether the conditions found in this type of environment introduce some specificities in the networking process, namely in network building and early mobilization to access key resources. The paper compares biotechnology start-ups in Portugal and in Southern Italy, focusing on relationships with research organizations and on the relevance assumed by international connections, and investigating the role played by entrepreneurs’ personal networks. The research identified some common features that diverge from the typical biotechnology start-up behaviour and can be regarded as firms’ adaptive responses to the conditions faced. Notwithstanding the frequent presence of close connections with local research organizations—that often play functions that go much beyond that of a knowledge source—the local environment is a lesser determinant for a substantial proportion of firms than would be expected in start-ups. A distinctive feature of these firms is an extensive reliance on foreign sources, for different purposes and from the very early stages. Entrepreneurs’ personal networks are found to be instrumental, both to identify and obtain knowledge in the vicinity and to support the establishment of more complex distant relationships.     

Creation and Alignment of the Eco-innovation Strategy Model to Regional Innovation Strategy: A Case from Lahti (Päijät-Häme Region), Finland

This study focuses on the importance of eco-innovation in regional innovation strategy and policy development. It is conducted to get an in-depth understanding and learning about eco-innovation at the regional level and to draw some principles that are important in creating and aligning the eco-innovation strategy model to regional innovation strategy. The study highlights the new eco-innovation strategy model called SAMPO which was created and developed through a series of multi-stakeholder consultations which embodied the strengthening of the region's expertise—learning and knowledge-generating environment, design and innovation. These three areas of regional expertise are translated in the SAMPO model as three spearheads of innovation activities categorized as practice-based innovation, eco-design and sustainable innovation. Some principles are derived from the creation of the SAMPO model and put forward as strategic learning points in regional innovation strategy. The SAMPO model as positively acknowledged by the Päijät-Häme Regional Council, business clusters, research institutes and academic organizations may serve as a new framework that is useful in formulating and recreating eco-innovation policy in the region.     

Innovative Activity in SMEs and Rural Economic Development: Some Evidence from England

Recent writings on the factors influencing the competitiveness of regional and local economies have emphasized the importance of innovation in SMEs. This paper discusses the findings of a study of the innovation process in a sample of SMEs located in rural environments. Adopting a broad, evolutionary view of the innovation process, the study highlights important sectoral variations using a multidimensional index of innovation. The way in which innovation is achieved is found to be shaped by various aspects of the rural environment, but relatively few firms are constrained by their rural location. Nor does the lack of local networking opportunities appear to hold back innovation in the more active SMEs. In conclusion, the most innovative firms are shown to make an important contribution to rural economies in terms of external income generation and employment generation.     

Strategic Considerations for Innovation and Commercialization in the US Biotechnology Sector

This paper examines the importance of alliances as an innovation strategy utilized by US biotechnology firms. In doing so, the role of alliances with universities vis-à-vis alliances with industrial companies is emphasized. The biotechnology sector is dominated by few large and many small firms. The small firms are research focused or technology developers. Several large firms are now integrated biopharmaceutical companies. Very few small firms can survive without strengthening their relationships with universities, biotechnology or pharmaceutical or other large companies. These relationships range from licensing agreements, export–import connections to various forms of alliances for R&D, product development and marketing. Large firms supplement in-house R&D by acquiring research products and/or new technologies from small firms as well as universities. A survey of US biotechnology companies is used to show the emergence of alliance relationships, which continue to highlight university linkages, emphasize connections of biotechnology firms with other biotechnology entrepreneurs, and an ongoing effort to build a synergistic relationship with pharmaceutical or other large companies. Most linkages are not confined to the local area; the main locational attribute is the science base or the labour market.