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.     

Knowledge Networks as a Regional Development Resource: A Network Analysis of the Interlinks between Scientific Institutions and Regional Firms in the Metropolitan region of Hanover,Germany

The debate on regional innovation potentials has concentrated in recent times upon the topic of regional knowledge networking. This article presents the findings of the first phase of a detailed network analysis of the cooperation relations between scientific institutions and firms in the “metropolitan region Hanover-Brunswick-Göttingen”. The research concentrated on the regional and supra-regional cooperation relations of approximately 500 science establishments of the region, including their interlinks with private sector firms. This analysis of a polycentric metropolitan region's knowledge networks in different fields of competence produced detailed information on the density of knowledge interlinking within the region, on the degree of connectivity between the region's scientific institutions and private sector firms, and on central network nodes within the regional innovation networks. The case study exemplifies the methodical approach of a regional network analysis and emphasizes the role of knowledge networks as a development resource which is of particular relevance to the region's innovation capacities.     

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.     

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.     

What Makes SMEs more Likely to Collaborate? Analysing the Role of Regional Innovation Policy

The last 20 years have witnessed the diffusion of regional innovation policies supporting networks of innovators. The underlying aim of these policies is to encourage firms, particularly small and medium-sized enterprises (SMEs), to undertake collaborations with organizations possessing complementary knowledge. Focusing on a set of SMEs that have participated, over time, in several innovation networks funded by the same regional government, the paper investigates how their relationships have evolved with respect to the following aspects: (i) reiteration of pre-existing relationships as opposed to experimentation with new relationships; (ii) collaboration with organizations possessing complementary rather than similar knowledge and competencies; (iii) creation of local relationships rather than experimentation with extra-local collaborations; (iv) reliance upon intermediaries to connect with other organizations. Our findings reveal that the involvement in these policy-supported networks changed the firms' relational patterns, leading them to collaborate with a wider variety of agents than those with whom they were linked before the policies. Sectoral heterogeneity had a negative effect on the probability of collaborating, while co-localization increased the likelihood of collaborating. Mutual involvement with intermediaries also had a positive effect. However, in the case of firm-to-university relationships only specialized intermediaries were likely to perform a positive role and, therefore, encourage networking.     

Oslo: In What Way an Innovative City?

The article analyses to which extent and in what way the Oslo region may be considered as an innovative and dynamic city in the Norwegian context. Although the European Union Community Innovation Survey (CIS II) concludes that the Oslo region has the same share of innovative firms as the national average, other data sources convincingly demonstrate that Oslo is an innovative city in the Norwegian context, having for example comparatively many 'radically' innovative firms and a high rate of new firm formation. However, knowledge organizations in Oslo do not function as hubs in wider innovation systems to any large degree. The empirical results may most fruitfully be explained with reference to a 'bottom-up' theoretical approach, that considers specific local and regional resources, relations and routines as important sources of innovation.     

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.     

Network Structures in Regional Innovation Systems

While interactive learning and inter-organizational relations are the fundamental building blocks in regional innovation system (RIS) theory, the framework is rarely related to investigations of regional knowledge network structures, because in RIS literature relational structures and interaction networks are discussed in a rather fuzzy and generic manner, with the “network term” often being used rather metaphorically. This paper contributes to the literature by discussing theoretical arguments about interactions and knowledge exchange relations in the RIS literature from the perspective of social network analysis. More precise, it links network-theoretical concepts and insights to the well-known classification of RIS types by Cooke [(2004) Introduction: Regional innovation systems – an evolutionary approach, in: P. Cooke, M. Heidenreich & H.-J. Braczyk (Eds) Regional Innovation Systems: The Role of Governances in a Globalized World, 2nd ed., pp. 1–18 (London: UCL Press)]. We thereby exemplarily show how the RIS literature and the literature on regional knowledge networks can benefit from considering insights of the respective other.     

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.     

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.     

Innovation System Effects on Technological Adoption in a Regional Value Chain

This paper examines the technology adoption rates of a sample of enterprises that are nominally members of the transportation equipment value chain. We utilize the regional innovation system (RIS) concept to identify and test key regional and corporate influences on technology adoption. Using data collected from a detailed survey instrument, our analysis considers adoption rates during the very period in which production equipment technologies are known to have grown very suddenly, i.e. the fourth quarter of 1994. Our findings indicate that the most important RIS factors are related to worker training and information spillover effects between proximate firms. In the main, our findings are supportive of policies that work indirectly through the market structure of regional economies and a firm's value-chain, as opposed to directly through regional technology agencies.     

Globalization,Modes of Innovation and Regional Knowledge Diffusion Infrastructures

Firms increasingly transcend the boundaries of regional innovation systems in their search for technology and complementary capabilities, and only rarely can they build their knowledge bases on science system output alone. Whereas the former decouple firms from regional user–producer networks, the latter raises important questions concerning the role of local science and education system actors in industrial development. By applying the “modes of innovation” concept on a Norwegian region, this paper discusses how science and education institutions can respond to the challenges of knowledge base complexity and globalization. It concludes that such institutions may play a vital role in supporting knowledge-based development, albeit different from that of academic knowledge exploration followed by linear technology transfer to industry.     

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.     

Determinants of the Uneven Regional Participation of Firms in European Technology Programmes. The 'Low R&D Trap'

Technology is of key importance to the growth of regional firms and economies. Research has shown the association between low technology development or take-up and regional disparities. Hence technology policy is moving closer to the heart of regional policies. European innovation programmes are intended to involve firms, large and small, in international technology research and development networks. The paper focuses on the involvement of Spanish firms in such programmes. Participation tends to be low if business R&D, presence of large firms, and the development of regional innovation systems are also low. Creation of R&D infrastructure through the Structural Funds has now to be prioritized at EU level and also define a new scheme of sectoral priorities in order to support R&D innovation activities in fields diverse from high-tech, if regions are to escape the 'low R&D trap'.     

The Effects of Exogenous Shocks on the Development of Regional Innovation Systems

Drawing on previous studies related to the evolutionary aspects of regional innovation systems (RIS), this paper examines how an exogenous shock reduced organizational thinness, fragmentation and lock-in and thereby facilitated path creation and RIS emergence in a peripheral region. A longitudinal case study approach, based on primary data from 39 interviews conducted between 2008 and 2012, is used to investigate how a region was affected by the sudden entry and subsequent activity of a multinational oil company. A multi-level analysis illustrates how this exogenous shock facilitated change at the firm, public authority and macro (regional) levels and thus provides a holistic understanding of the complex mechanisms that underlie regional transformation. The analysis illustrates how the entry of the oil company reduced organizational thinness by stimulating the establishment of external firms. The existing regional actors then managed to reduce their organizational lock-in by adapting their skills and resource bases to new knowledge provided through interfirm relationships (reduced fragmentation), and this reduced organizational lock-in and fragmentation ultimately strengthened the industrial structure and further contributed to regional path creation. A number of innovations were observed, and in combination with the “thickened” institutional structure, this represented the means for an emerging RIS.     

Innovation Processes and Proximity: The Case of IDEON Firms in Lund,Sweden

Increasing pressure on innovativeness and collaboration is supposed to strengthen the importance of geographical proximity in innovation systems. But simultaneously there are 'globalization forces' and information and communication technology (ICT) developments that stress wider contexts and different dependencies to place and distance. With case studies of innovative firms at IDEON Science Park in Lund, the article presents analyses of the importance of proximity, related to the kind of knowledge and collaborative arrangements involved in innovation processes. Scope for 'untraded interdependencies' is discussed as well as the possible ICT impact of these collaborative relations. Argument for a three tier innovation system is put forward and its implications for regional innovation strategies are, concludingly, discussed.     

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.     

The Importance of Public Research Institutes in Innovative Networks-Empirical Results from the Metropolitan Innovation Systems Barcelona,Stockholm and Vienna

The recent discussion on economics and regional economics has increasingly stressed the importance of knowledge and information. Research institutes, in particular, are seen as crucial for assisting local firms in their innovation activities. The aim of this paper is to explore the real importance of research institutes supporting innovative activities in businesses. Based on the representative European Regional Innovation Survey the results show that the actual significance of research institutions in the support of firms' innovation processes is smaller than revealed in the concepts of the innovative networks, innovative milieu or learning region.     

Regional knowledge capabilities,embeddedness of firms and industry organisation: Bioscience megacentres and economic geography

Changes in epistemology in biosciences are generating important spatial effects. The most notable of these is the emergence of a few 'Bioscience Megacentres' for basic and applied bioscience medical and clinical research (molecular, post-genomic, proteomics, etc.), biotechnology research, training in these and related fields, academic entrepreneurship and commercial exploitation by clusters of 'drug discovery' start-up and spin-off companies, along with specialist venture capital and other innovation system support services. Large pharmaceutical firms that used to lead such knowledge generation and exploitation processes are becoming increasingly dependent upon innovative drug solutions produced in such clusters, and megacentres are now the predominant source of such commercial knowledge. 'Big pharma' is seldom at the heart of megacentres such as those the paper will argue are found in about four locations each in the USA and Europe, but remains important for some risk capital ('milestone payments'), marketing, and distribution of drugs discovered. The embedding of these processes also creates major new regional disparities, which some regional governances have recognised, causing them to develop responsibilities for regional science policy and funding to offset spatial biases intrinsic in traditional national (and in the EU, supranational) research funding regimes. Responses follow a variety of models ranging from market-following to both regionalised (decentralising by the centre) and 'regionalist' (ground-up); in each case, the role of megacentres is justified in health terms. But their role in assisting fulfilment of regional economic growth visions is also clearly perceived and pronounced in policy terms.     

The challenge of breaking the academia–business firewall in Czechia: comparing the role of differentiated knowledge bases in collaborative R&D projects

Contemporary innovation processes increasingly involve a large number of networked actors, and cross-fertilization between knowledge institutions and firms has thus become a significant driver for innovation. Important insights into the differing nature of research and development (R&D) collaboration in particular sectors have been provided by research inspired by the knowledge-base approach embedded within innovation system (IS) theory. This study aims to contribute to this body of literature by applying the concept of differentiated knowledge bases to the former state-socialist countries, where the IS operates through a firewall between academia and industry. Data on collaborative R&D projects co-financed by public resources have allowed a detailed analysis of the nature of collaboration networks, revealing emerging patterns of academia–industry linkages and questioning the propositions stemming from the knowledge-based approach. The study concludes that collaborative science–industry networks show a very distinct topography when analytical and synthetic knowledge is compared.