Border blocking effects in collaborative firm innovation

Border regions are not often associated with innovation and economic prosperity. And even when they are prosperous, cross-border interaction is still mostly limited. The opening up of borders in Europe has presented new opportunities for firms located in these border regions to co-operate for innovation and knowledge to flow across borders. Despite the reduction of the importance of borders, firms seeking to access cross-border knowledge resources need still to ‘cross’ the border and address the various effects it brings. This paper therefore asks the question of how the presence of a border affects the processes by which firms attempt to build up productive co-operations for innovation. We use a heuristic of collaborative innovation across borders as building up through four sequential cooperation stages, and each of these different stages is susceptible to different kinds of border effects. Using a case study of firms co-operating across the Dutch-Flemish border, we empirically explore these border crossing processes in order to shed further light on how border processes play out.     

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.     

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.     

The ‘Cultural Turn’ in Australian Regional Economic Development Discourse: Neoliberalising Creativity?

Regional economic policy‐makers are increasingly interested in the contribution of creativity to the economic performance of regions and, more generally, in its power to transform the images and identities of places. This has constituted a ‘cultural turn’, of sorts, away from an emphasis on macro‐scale projects and employment schemes, towards an interest in the creative industries, entrepreneurial culture and innovation. This paper discusses how recent discourses of the role of ‘creativity’ in regions have drawn upon, and contributed to, particular forms of neoliberalisation. Its focus is the recent application of a statistical measure — Richard Florida's (2002) ‘creativity index’— to quantify spatial variations in creativity between Australia's regions. Our critique is not of the creativity index per se, but of its role in subsuming creativity within a neoliberal regional economic development discourse. In this discourse, creativity is linked to the primacy of global markets, and is a factor in place competition, attracting footloose capital and ‘creative class’ migrants to struggling regions. Creativity is positioned as a central determinant of regional ‘success’ and forms a remedy for those places, and subjects, that currently ‘lack’ innovation. Our paper critiques these interpretations, and concludes by suggesting that neoliberal discourses ignore the varied ways in which ‘alternative creativities’ might underpin other articulations of the future of Australia's regions.     

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.     

Innovation,technology support and networking in South Wales

This paper summarizes findings from an EU Regional Innovation and Technology Transfer Strategies project conducted in the Centre for Advanced Studies, Cardiff 1993–1995. The aims of the project were threefold: to assess the present innovations infrastructure of South Wales; to identify using questionnaires the innovation needs of innovating firms; and to establish an innovation support network to meet identified needs. This piece focuses mainly on the innovation survey of firms, the main identified needs of whom were finance, technical assessments and research partners.     

Persistence of innovative activities in times of crisis: the case of the Basque Country

By drawing on a large sample of Spanish manufacturing and service sector firms, the changes in firms’ innovation expenditures that have taken place since the onset of the 2008 economic crisis are analysed, as is the relationship between such changes and the location of the company. Special focus is placed on firms in the Basque Country. Compared to other Spanish regions, the Basque Country differs in terms of its fiscal status, its earlier experience of crises, its innovation performance and its greater focus on innovation-related policies. Our results show that the impact of the crisis on firms’ innovation expenditures in the Basque Country has indeed differed from that in comparable Spanish regions. Even after controlling for sectoral differences and for detailed characteristics at the firm level, firms with R&D employment in the Basque Country showed a significantly lower probability of abandoning innovation activities and even a somewhat higher probability of increasing their innovation efforts. This regional effect is especially significant for small and medium-sized enterprises.     

Regional Innovation Policy and Innovative Behaviour: Looking for Additional Effects

This paper aims to evaluate the additionality of innovation policy in terms of innovative behaviours at the regional level. Innovative behaviours are identified both within and across firm and regional boundaries. The role of policy is evaluated for a sample of firms in the Italian region of Emilia–Romagna (ER), exploiting an original, survey-based data set. Propensity score matching is applied to investigate the effects of an innovation subsidy. Funded firms are found to be more likely to upgrade their competencies, compared with similar non-subsidized firms. On the other hand, in most cases, innovation cooperation with other business partners within or outside the region is not significantly affected by policy. Ultimately, the investigated innovation policy in the ER region seems to show what might be termed “cognitive capacity additionality”, rather than “network additionality”.     

What drives export performance of firms in Eastern and Western Poland?

We use a unique firm-level survey dataset that draws from the EFIGE (European Firms in a Global Economy) questionnaire to unveil differences in factors driving export performance in the most structurally diverse areas of Poland. While conventional results regarding the role of size, foreign ownership and innovation activity are confirmed at the aggregate level, the picture breaks down when Western and Eastern macroregions are extracted. Our results suggest that the common perception of a more developed West (Poland ‘A’) and a backward East (Poland ‘B’) might be outdated. Rather, firms in both regions seem to follow distinct strategies for and have dissimilar success factors in competing internationally. Interestingly, export performance in the East is found to benefit from family ties in business, but also from product innovation and non-price competitiveness. In the West, it is associated mostly with size and foreign ownership. Overall, our results, on the one hand, add support to the ‘new’ new trade theory and the ‘new’ new economic geography’s premises related to the importance of microeconomic factors and, on the other, contribute to the discussion on the pattern of regional development in Poland. We also discuss some implications for policymakers and managers and suggest directions for further research.     

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.     

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.     

With or Without Clusters: Facilitating Innovation through a Differentiated and Combined Network Approach

Over the past decades, economic and innovation policy across Europe moved in the direction of creating regional clusters of related firms and institutions. Creating clusters through public policy is risky, complex and costly, however. Moreover, it is not necessary to rely on clusters to stimulate innovation. A differentiated and combined network approach to enhancing innovation and stimulating economic growth may be more efficient and effective, especially though not exclusively in regions lacking clusters. The challenge of such a policy is to mitigate the bottlenecks associated with “global pipeline”, “local buzz” and “stand alone” strategies used by innovative firms and to combine these strategies with a view to their complementarity in terms of knowledge effects. Private and semi-public brokers will be key in the evolving policy, as timely organizational change is crucial for continued innovation, while brokers also need to mitigate governance problems. This requires region-specific knowledge in terms of sectors, life cycles, institutional and socio-cultural factors, and yields spatially differentiated and differentiating adjustment strategies. The role of public policy is to assist in recruiting, provide start-up funding and monitor brokers. With this, policy moves towards a decentralized, process-based, region-specific, spatially diverging and multi-level system of innovation that is geared towards the evolving innovation strategies of firms.     

Where cities fail to triumph: The impact of urban location and local collaboration on innovation in Norway

The role of cities in fostering innovation has for long been taken for granted. Agglomeration and the knowledge spillovers generated in dense urban environments have been considered fundamental drivers of innovation. This view has, however, become challenged by research questioning the returns to physical agglomeration and local networking, placing instead more emphasis on the importance of interregional and international collaboration, and on innovation in peripheral regions. This paper delves into the debate on the role of cities for innovation by examining the interplay between urban location and local collaboration in Norway. It uses data from the Community Innovation Survey for 2006–2010 to map out the geographical dimension of R&D collaboration in Norwegian firms with a view to assessing whether different types of R&D collaboration in urban and rural locations affect firms’ propensity to innovate. The results show that local collaboration is associated with increased process and organisational innovation, while it does not produce higher levels of product or marketing innovation. Conversely, international collaboration is connected with higher probabilities of product, new-to-market and marketing innovations. Furthermore, location in urban or rural areas makes no difference for most innovation outcomes in Norway when other characteristics are controlled for. Location in cities also does not shape the returns to local R&D collaboration. Hence, the role of cities for innovation in Norway, whether in themselves or as sites for dense local interaction, is less relevant than the urban innovation literature would predict.     

US-Australia-Indonesia Trilateral Security? Conditions for Cooperation

Since the 1950s, US strategic architecture in the Indo-Pacific has been premised on its hubs-and-spokes model of bilateral alliances and security partnerships. Since the 2000s the US began working toward forging deeper interrelationships between its regional allies and partners. The emerging strategy ultimately aims to interlink long-standing allies like Japan and Australia, and also non-traditional partners in the development of a security network capable of maintaining the regional ‘rules-based order.’ In analysing the US-led triangular Indo-Pacific geometry, this article considers the prospects of an evolving and substantive US–Australia–Indonesia security trilateral. It does so by utilising Miller’s ‘conditions for cooperation framework’ to test the likelihood of greater cooperation between these three states. These conditions include cultural similarity, economic equality, habits of international association, the perception of common danger, and greater power pressure. It concludes that while there remain strict limitations on any formal alignment between the ANZUS partners and Indonesia, there are convergent interests in key sub-strategic areas in the maritime space and thus a viable path toward greater trilateral cooperation but not, as yet, formal arrangements.     

Beyond ‘related variety’: how inflows of skills shape innovativeness in different industries

ABSTRACT

Building on recent evolutionary thinking, this paper focuses on inter-industry differences in the receptiveness of firms to inflows of skills from different domains of the external economy. The empirical analysis of innovation performance finds that firms’ dependences on recruiting outside their own industry domains were inversely related to the vibrancy of knowledge dynamics within them. Moreover, inflow distances that are ‘optimal’ from the perspective of learning are closer to manufacturing firms’ own industry domains, than they are to the domains of services firms. As a result, only low-tech manufacturing and technology-intensive services firms exhibit the receptiveness to inflows from ‘related’ industries found in prior evolutionary research. Firms in high-tech manufacturing, by contrast, capture strong learning benefits from intra-sectoral mobility flows, whereas firms in traditional professional services depend on skills developed outside their own industry domains. Implications for the theory, empirics and policy relevance of evolutionary economic geography are discussed.     

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.     

Embedding entrepreneurial regional innovation ecosystems: reflecting on the role of effectual entrepreneurial discovery processes

ABSTRACT

Collaboration between regional stakeholders is increasingly emphasized in innovation policy as a way to activate the inherent agency in a regional innovation system. Partnerships of diverse stakeholders have been identified as critical, being able to envisage and implement future pathways that in turn bring change to a region. Thus, the knowledge of various stakeholders is supposed to be combined in novel ways in order to define regional assets and possible future pathways. Nevertheless, it has been recognized that these agency activation approaches often fail to realize these long-term visions initially agreed by partners. We here draw on Sotarauta’s notion of policy ‘black holes’, where regional partners repeat past superficial successes rather than driving in to systemic change. We seek to understand the conditions under which regional stakeholders can build realistic and adaptable strategies that shift regional development trajectories. We explore this via a qualitative approach comparing entrepreneurial discovery processes in three peripheral regions, namely Twente (Netherlands), Aveiro (Portugal) and Lincolnshire (UK). We reflect on the potential value of more effectual (opportunistic/ flexible) approaches to entrepreneurial discovery. We argue that black hole problems may arise from the way agency activation strategies conceptualize long-term strategy development, if partners’ mind-sets are too causal and lacking flexibility to continually reorient strategies during implementation better towards these collective visions.     

Spatial distribution of innovation networks,technological competencies and degree of novelty in emerging economy firms

This paper analyses the relationship of the accumulation of technological competencies at the firm level, the spatial distribution of the firm's innovation networks and the degree of novelty of product innovation. Firm-based primary data collected in two innovative regions in emerging economies are used to predict higher degrees of novelty in emerging economy firms. Similarly to advanced economy firms, the results show that international linkages are associated with higher degrees of novelty. However, new-to-the-world innovation in emerging country firms is fundamentally externally driven, suggesting that international linkages seem to be a compensating mechanism for the initially lower technological capabilities rather than a complementary source of knowledge.     

Innovation Networks and Regional Development—Evidence from the European Regional Innovation Survey (ERIS): Theoretical Concepts,Methodological Approach,Empirical Basis and Introduction to the Theme Issue

A general consensus exists in the debate on innovation-oriented regional development, in which cooperation in innovation between manufacturing firms, service firms and research institutions continues to grow in importance with respect to business success and the economic performance of a region—at least for some region types. The academic discussion, thus far, has been shaped by a large number of outstanding theoretical studies focusing on this topic from the perspective of the innovative milieu concept, the network theory (spatial version), the regional innovation systems approach or the transaction cost theory. Up to now, comparative empirical studies have not been performed evaluating the significance of innovation networks over a sufficiently large and statistically representative data set for the various types of regions. This is the goal of this issue of European Planning Studies, which is introduced in this article. Briefly, the basic concepts for explaining network-oriented regional development are described and the essential features of the European Regional Innovation Survey (ERIS) are presented—developed by a research team of German economic geographers and regional economists. Between 1995 and 1999 ERIS carried out three extensive surveys in 11 European regions with a total return of 8635 questionnaires, in an effort to identify, systematize, and quantify linkages between innovative players. The question of the range of such innovative linkages plays a central role in this analysis.     

Beyond flexible specialization: the rearrangement of regional production orders in Emilia‐Romagna and Baden‐Württemberg

Emilia‐Romagna and Baden‐Württemberg are two highly successful industrial regions. Their economic success is based on a specific industrial and institutional order, on regionally concentrated production network based mainly on small and medium enterprises and on ‘cooperation enhancing’ institutions. This regional production order was the basis for strategies of flexible specialization’. The fundamental restructuring of mass production concepts as well as harsher worldwide competition over innovation and costs, however, undermined previous advantages of these regions. Emilia‐Romagna and Baden‐Württemburg handle these new challenges in different ways: while Baden‐Württemberg counts on technology‐ and research‐based restructuring, Emilia‐Romagna's restructuring is service‐based—increasing the demand for new production‐related services (quality control, financial services, marketing). These different patterns of reorganization and institutional learning point out institutional and industrial differences between the two regions undervalued in the concept of ‘flexible specialization’.