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.     

Characteristics of Collaboration in Product Innovation in the Regional System of Innovation of East Gothia

The focus of this article is on product innovations introduced by firms (establishments) and the collaborations they enter into with other firms and organizations in carrying out this activity. The theoretical framework combines innovation theories with the literature on regional innovation systems and the knowledge-based economy. Empirically we have investigated characteristics of collaboration among manufacturing establishments in the region of East Gothia in Sweden, with specific focus on the number of employees involved in the innovation projects, mechanisms of knowledge transfer between organizations, as well as financing and patenting in relation to product innovations.     

From toys to automobiles: foreign investment,firm heterogeneity and intermediaries in a Portuguese industry

In the literature on territorial innovation systems there is a constant tension between the effect of endogenous and exogenous factors and their relative importance. In order to address this tension several approaches have sought to conceptualize the relational and multi-scalar dimension of innovation and to explain how external knowledge and economic flows in conjunction with regional contexts combine to produce regional growth, stagnation or decline. This paper will contribute to this debate, while also highlighting that even at the local level there is substantial heterogeneity between firms. It will also shed light on the role of intermediary organizations that can help address information and power asymmetries between multinational corporations and less competitive local firms. Empirically it will draw on the case study of the Portuguese moulds industry, which has successfully adapted to shifts in the global economy by drawing on local resources while also remaining integrated into global value chains.     

Extra-regional linkages through MNCs in organizationally thick and specialized RISs: a source of new path development?

ABSTRACT

This paper explores how global innovation networks (GIN) within multinational companies (MNCs) act as extra-regional sources for path development in a regional innovation system (RIS) specializing in the oil and gas sector. We combine the literature on intra-firm knowledge dynamics in MNCs’ GIN with the literature on RISs to better understand their interrelatedness and their dynamics. Based on interviews with 15 MNCs located in the south-west of Norway, we find that firms are highly dependent on competence throughout the MNCs’ entire networks, as well as interaction with the overall RIS. The findings expose that MNCs’ GINs can act as extra-regional sources for path ‘extension’ in thick and specialized RISs through intra-firm mobility, observation and sharing of routines and best practice, mainly resulting in incremental innovations. We find some signs of potential path ‘renewal’, including radical innovation ideas. However, there are hampering factors linked to strong internal competition for innovation projects, pressure for local profitability and ownership motivation. At the level of RISs, new initiatives going beyond existing cluster initiatives and specializations need support.     

Combining Knowledge from Different Sources,Channels and Geographical Scales

The aim of this article is to examine conceptually and empirically how innovative firms combine knowledge (1) provided by different sources, (2) accessed at different spatial scales and (3) acquired through different channels. We add to the conceptual debate by contrasting and synthesising the perspectives offered on these issues by four key concepts, namely the local buzz and global pipelines argument, the knowledge-base approach, the notions of Science–Technology–Innovation and Doing–Using–Interacting modes of innovation as well as the regional innovation systems concept. The empirical part of the article contains an analysis of knowledge-sourcing activities employed by 181 firms belonging to the Austrian automotive supplier industry. Our findings reveal that it is, indeed, combinations of knowledge sourced from different partners located at different spatial scales and acquired through different channels that are relevant. However, it is particular combinations that dominate while others are negligible. Austrian automotive supplier firms combine knowledge provided by customers with knowledge inputs from a variety of other sources. Most of the combinations involve the European or global levels combined with the regional and/or national level. Finally, firms combine spillovers with a variety of other channels to acquire innovation-relevant knowledge.     

Networking and learning for tourism innovation: evidence from the Western Cape

ABSTRACT

This paper examines the nature of networking and learning by tourism firms in relation to accessing knowledge for innovation. In particular, the nature of tourism learning and networking, geography of networking linkages, and systemic characteristics of relationships between tourism firms, government agencies, higher education institutions, and other organisations in the Western Cape tourism system are examined. The analysis draws on 182 tourism firm, tourism system, and contextual interviews. This investigation demonstrates that even though tourism firms mostly use internal resources for innovation, external, non-local knowledge is significant for enhancing novel innovation. It is disclosed that whilst local network linkages are dense, loose, and of importance for business and marketing purposes, extra-regional network relationships are imperative for learning in relation to innovation. As further observed, network linkages between local and regional actors for supporting tourism innovation in the Western Cape are generally weak which points to the underdevelopment of local and regional innovation networks or systems. The paper provides planning recommendations for enhancing the competitiveness of tourism firms towards fostering development and growth in the regional tourism economy. Specifically, support for stimulating learning networks as well as strengthening systemic relationships in the Western Cape tourism system are recommended. It is underscored that strategic relationships with non-local partners need to be nurtured towards fostering tourism innovation and enhancing regional competitiveness.     

R&D Cooperation in Innovation Systems—Some Lessons from the European Regional Innovation Survey (ERIS)

Our paper summarizes some of the main results of the European Regional Innovation Survey (ERIS) as far as they are discussed in this special issue of European Planning Studies . The overall target of the ERIS project is a quantitative and qualitative assessment of determinants crucial for the innovation potential of any region, i.e. innovative and non-innovative manufacturing firms, business services and research institutions, as well as the innovative linkages and networks between these actors. Empirical research is based upon almost 8600 questionnaires collected in 11 European regions. Results confirm some of the common hypotheses on the relationship between space and innovation networks but others are contrary to existing scientific knowledge. Obviously the impact of national innovation systems on the innovation activities of manufacturing firms in a given European region is-at least-as strong as the impact of the respective regional innovation system. The spatial range of innovative linkages significantly depends on the size, the type of the cooperation partner, the R&D intensity and the industry of the analysed manufacturing firm. For example, the higher the technology intensity of the industry, the greater is the need of each firm to use intraregional knowledge via innovation linkages. It is therefore an important task in regional innovation policy to promote network-building among firms and other actors of a regional innovation system and to interlink these intraregional networks with national and international knowledge sources.     

Innovations, Competitiveness and Local Embeddedness: A Study of Machinery Producers in Sweden

This paper is about technological relations and firm performance in the Swedish machinery industry. Taking its point of departure in the proliferating literature on the localized nature of learning and innovation processes, the paper sets out to answer three empirical questions: To what extent are firms integrated in localized production systems based on buyer-supplier relations? At what geographical level–local/regional, national or international–are the most important technological relations found? Is there a correlation between localized technological relations and the technological performance of firms? The results indicate that few firms display localized buyer-supplier relations. Rather, the industry is highly internationalized, with the most important customers and competitors located outside Sweden. In terms of technologically important relations, the domestic arena seems to be more important. The majority of the most important technological relations link the machinery producers to other actors in Sweden. Three out of four firms may be classified as predominantly local/regional or national in their technological relations, or technology profile. This survey therefore supports the notion that there exists both local/regional and national innovation systems. Finally, however, despite the fact that most firms are fairly locally embedded in their technology relations, there is no evidence that such embeddedness shows up as superior firm performance, in terms of technology level or innovative capacity.     

区域技术创新的非正式制度和联系:经济地理学的视角

众多区域技术创新的研究案例表明,非正式的制度和联系是区域技术创新成功的重要因素。本文回顾了经济地理学在区域技术创新的非正式制度和联系方面研究的相关理论和研究成果,发现"创新环境"、"非贸易相互依赖"、"地方传言"和"企业衍生"等理论虽然提出并探讨了区域技术创新的非正式制度和联系的属性和特征,却对这种非正式制度和联系的形成原因和影响机制的分析相对较少,对其空间尺度的研究也过度集中于区域尺度。由于当前我国大多数区域内部企业之间的创新联系大部分仍以非正式联系为主,因此对于区域技术创新的非正式制度与联系的形成原因、影响机制及其对创新绩效的影响的进一步研究,将具有非常重要的理论和实践意义。     

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.     

Renewable Energy Innovation and Governance in Wales: A Regional Innovation System Approach

This paper draws on research commissioned to investigate the regional innovation system of Wales on green innovation, focusing on the renewable energy sub-sectors of wind, solar and biomass. It shows how many innovative firms operate within regional networks, cooperating and interacting not only with other firms such as suppliers, customers and competitors, but also with research and technology resource organizations, innovation support agencies, venture capital funds, and local and regional government bodies. The paper argues that within the region there is the presence of various renewable energy production platforms, usually based on core technologies (wind, solar, biomass, marine, etc.) at different levels of development. They involve a mix of established energy utilities and new sustainable energy businesses that are positioned at different levels within the renewable energy supply chain. The research shows that the regional government is playing an important role in supporting the renewable energy industry; nevertheless, more needs to be done to facilitate planning control, provide skills and create new demands for renewable energy that will further foster business growth and further strengthen the existing manufacturing base and innovation in Wales. The paper identifies some weaknesses in the Welsh energy innovation system, not least that energy is not a devolved responsibility and it argues that there is some scope for the Welsh Assembly Government to further investigate gaps within the green innovation supply chain and act on strengthening regional capabilities within the industry but also to support and investigate further opportunities for inward investment.     

Complementarities Between Universities and Technology Institutes: New Empirical Lessons and Perspectives

This paper investigates the different roles played by universities and technology institutes (TIs) as innovation partners of firms. Comparing the characteristics of Spanish firms collaborating with these agents allows us to better define complementarities among the target groups of these organizations. Our findings show that those firms collaborating with universities are bigger, have higher internal capabilities and are less dependent on their external relationships while firms collaborating with TIs are smaller, have weaker internal capabilities but are more open to their environment and thus more reliant on external sources. We point to the implications of these findings for regional development. Universities have a role as partners of more technologically advanced firms. TIs, on the other hand, partner those firms, which though also quite advanced, require more external help in their innovation processes. These results should help policy-makers in the definition of more complex regional strategies and the provision of tools aimed at different goals. Managers of universities, TIs and client firms should find these results of help in developing more positive collaborations with one another.     

Does Spatial Clustering of Foreign Direct Investment Foster Global Production Networks? The Case of Qingdao,China

This article examines how spatial clustering of foreign direct investment (FDI) can foster a global production network (GPN). The cluster concept, in general, stressed inter-firm relations between local and regional firms while neglecting global–local linkages in the spatial context. In contrast, GPN focuses on the advantages of international production organization and governance structure but underestimates regional or localized channels of production arrangement. By integrating the conceptual framework of spatial clustering of FDI and GPN, this paper provides empirical evidence of various channels to knowledge and innovation transfer between domestic firms and foreign-invested enterprises. This paper demonstrates that the different types of linkages formation are key determinant factors for establishing cluster through contributing to local economic development.     

Beyond the regional lifeworld against the global systemworld: towards a relational –scalar perspective on spatial–economic development

Recent writings in economic geography have questioned the way the literature has featured the regional scale in discussing issues of innovation and economic competitiveness, and called for a different conceptualization of scale. This paper takes up the challenge to go beyond what is called the 'regional gaze', by presenting a critical review of the regionalist literature and outlining an alternative approach. The critique of the 'regional gaze' is developed in two steps: first, by discussing the influence of strategic management discourse; and second, by invoking the twin concepts of lifeworld–systemworld. This critical account results in identifying various windows for elaborating an alternative conceptualization of the relationship between economic development and space. A first alternative is found in the dimension of the 'non–local' or 'extra–local', but the significance of these notions is considered to be limited. Drawing on recent work on scaling and the 'politics of scale', a relational–scalar approach is proposed that focuses on the question of how scalar qualities are socially produced and contested. What is called for is a geographical imagination that sees innovation and economic competitiveness as braced on spatialized networks rather than bounded territories scaled at the regional level. An illustration of how such a perspective may be elaborated is found in recent discussions on the concept of 'global production networks'.     

Barriers and Limitations in the Development of Industrial Innovation in the Region

The growing interest in public policy contributing to the expansion of industrial innovation, has become increasingly significant, resulting from the interrelationship between innovation, competitiveness, and economic growth. This article presents the results of an empirical study in identifying the most important barriers to the development of innovation, as ascribed by industrial firms belonging to the high-tech sector alongside the more traditional industries. The data were collected through field survey of industrial firms, located in the Northern region of Israel. A considerable unexpected similarity was identified in the most important factors that constitute barriers to innovation, between the industrial sectors and the different regions investigated. The most significant limitations are those that relate to the high risk involved with the engagement in innovation. The risks are related, on the one hand, to the lack of financial resources, and on the other hand, to the high cost needed for this engagement, thereby affecting the time needed for return on investment. Additionally, the lack of highly skilled workers was also found to be a significant barrier.     

Innovation Governance Nexuses: Mapping Local Governments' University–Industry Relations and Specialization in High Technology in Sweden

In this paper, we take as a point of departure an assumption that innovation governance matters as a local and regional policy instrument, and consequently we investigate whether local policy can be linked to local industry. To do this, we use Swedish survey data on policy and high-tech agglomeration at the level of municipalities and present evidence on innovation governance nexuses, i.e. locations with greater industrial specialization paired with stronger formalization of innovation governance. Theoretically, this paper follows the literature on regional advantage, but a novel approach is used in which innovation governance literature is linked to that advantage. The findings indicate that these types of policy instruments are useful by creating networks that channel and direct resource and knowledge flows, particularly at locations with higher education institutions.     

Regional Innovation Support Systems: Recent Trends in Germany and East Asia

Since the beginning of the 1990s, one can observe a clear shift in the aims of regional policy in industrialized countries from reducing regional inequalities to developing endogenous small and medium-sized enterprises (SMEs) and innovation in regions through regional innovation support systems. Innovation support systems are defined as a group of actively cooperating organizations that support the innovativeness of SMEs. An innovation support system consists of all agencies found in three support stages, namely the provision of general information, technological advice and joint R&D projects, between firms (of which technology-following SMEs are the main group), higher education institutes (HEIs) and public research establishments (PREs). Agencies found in these stages try to help to solve innovation problems mainly of technology-following SMEs by either giving them advice themselves or by referring them to other agencies in a further stage of support. The agencies can be mainly supra-nationally, nationally or regionally initiated. This paper aims at comparing these regional innovation support systems in Germany and East Asia, that is Japan and South Korea, both concerning the instruments used, their impact on regional economic development, their level of organizational embeddedness in regions and the ability of regions to coordinate innovation support policies. The main conclusions of the paper are that there are similarities between the regional innovation support systems found in the countries when it comes to policy instruments, but that the countries differ concerning their level of regional embeddedness and the abilities of regions to coordinate innovation support policies. The paper also tentatively concludes that in countries where regions have the ability to coordinate policies into integrative innovation support systems, the impact on regional economic development tend to be larger than in countries where these abilities are lacking, that is where dirigiste and grassroots support systems prevail. One important explanation for the different coordinating abilities lies in the different political-administrative systems found in the studied countries (centralized in South Korea versus federal in Germany). Other factors explaining differences are: a time lag of development policies between countries, differences between the history of supporting SMEs in regions, supra-national support frameworks, the commitment of the political leaders in regions, collective trust and the size of countries.     

SPATIAL DISPERSION OF TECHNOLOGICAL INNOVATION: A CASE STUDY FOR THE NETHERLANDS BY MEANS OF PARTIAL LEAST SQUARES*

ABSTRACT. In this paper the impact of spatial and nonspatial variables on the innovation potential and innovativeness of (small) industrial firms in The Netherlands will be analyzed. Innovation potential and innovativeness will be conceived as latent variables which will be measured by a partial least squares approach. The variables reflecting innovation potential are notably input variables such as internal and external R&D, while innovativeness will be based on output indicators such as the number of product and process innovations. The regional dimension enters our analysis essentially at two levels. First, we will investigate whether more innovative firms are to some extent spatially biased (i.e., on the basis of intrafirm characteristics). Secondly, we will analyze the relevance of an indigenous regional impact, per se. In other words, we will examine whether firms with an equal innovation capacity will differ in actual (i.e., realized) innovativeness as a consequence of different regional conditions. For the first issue, our results indicate that not all regions are equally well-endowed with potentially innovative (small) firms. Our analysis even demonstrates that these firms are underrepresented in regions which are generally considered to offer the most favorable production environment. After compensating for these differences in the composition of the regional set of firms, we demonstrate that an indigenous regional impact per se cannot be identified in The Netherlands.     

Twenty‐first Century Industrial Policy in a Small Developing Country: The Challenges of Reviving Manufacturing in Rwanda

The Rwandan government — widely lauded for its political commitment to development — has refocused its efforts on reviving growth in the manufacturing sector. This article examines how pressures from different levels — international, regional and domestic — have shaped the evolving political economy of two priority sectors (apparel and cement). To achieve its goals of manufacturing sector growth, the Rwandan government aims to access foreign markets (on preferential terms) and larger regional markets while developing effective state–business relationships with locally based firms. Despite the government's political commitment to reviving its manufacturing sector, its strategy has been both shaped and impeded by shifting pressures at the international level (through Rwanda's recent suspension from the African Growth and Opportunity Act), the regional level (through competition from regional firms) and the domestic level (through over‐reliance on single firms). Within the current industrial policy literature, there is limited reflection on how developing countries are dealing with the multi‐scalar challenges of enacting industrial policy in a much‐changed global trading environment. This article contributes to the industrial policy literature by addressing this lacuna.