This monthly selection of articles has been carried out by Philippe Gugler and Michael Keller, the Center for Competitiveness, University of Fribourg. A full selection of the previous articles is available here.

Knowledge exchanges in innovation networks: evidences from an Italian aerospace cluster

By : Fernando G. Alberti and Emanuele Pizzurno. Competitiveness Review, Volume 25, Issue 3, earlycite, 2015.

Abstract: «The paper aims at investigating the multifaceted nature of innovation networks. This paper focuses on two research questions. (i) Do cluster actors exchange only one type of innovation-related knowledge? (ii) Do cluster actors play different roles in innovation-related knowledge exchange? This paper builds on data collected at the firm level in an Italian aerospace cluster, i.e. a technology-intensive industry where innovation is at the base of local competitiveness. A questionnaire was used to collect both attribute data and relational data concerning collaboration and the flows of knowledge in innovation networks. We distinguished among three types of knowledge (technological, managerial and market knowledge) and five types of brokerage roles (coordinator, gatekeeper, liaison, representative and consultant). Data analysis relied on Social Network Analysis techniques and software. Concerning the first research question, our findings show that different types of knowledge flow in different ways in innovation networks. The different types of knowledge are unevenly exchanged. The exchange of technological knowledge is open to everyone in the cluster. The exchange of market and managerial knowledge is selective. Concerning the second research question, we suggest that different types of cluster actors (large firms, SMEs, research centers and universities and IFCs) do play different roles in innovation networks, especially with reference to the three types of knowledge considered in this study. Our results have practical implications both for policy makers and for managers. First, our research stresses how innovation often originates from a combination of different knowledge types acquired through the collaboration with heterogeneous cluster actors. Further, our analysis of brokerage roles in innovation driven collaborations may help policy makers in designing programs for knowledge transfer partnerships amongst the various actors of a cluster. Our data illuminate several aspects of how innovation takes place in a cluster opening up intriguing aspects that have been overlooked by extant literature. We believe that this may trigger several lines of further research on the topic.» [ABSTRACT FROM AUTHORS]

Complementing clusters: a competitiveness rationale for infrastructure investments

By : Amir Sasson and Torger Reve. Competitiveness Review, Volume 25, Issue 3, earlycite, 2015.

Abstract: «The purpose of this paper is to present a novel application of cluster theory and cluster methodology to evaluate large infrastructure investments. The complementing clusters approach, which builds on the notion of infrastructure as connecting isolated "economic islands", is able to assess the potential for value creation effects of new infrastructure investment. We use simulation analysis based on a unique data set encompassing all employees and employers, as well as cluster mapping, for every pair of ‘economic islands’ being connected by the examined infrastructure investments. The empirical setting is of large fjord crossings in Western Norway, the so-called E39 project. The empirical findings show that productivity gains are higher when an integrated labor market hosting complementary clusters is formed. Limitations remain regarding the economic integration path. Current evaluation of large infrastructure investments focuses on transportation economics effects, technical feasibility and environmental consequences. We complement this current practice by advancing a theoretically grounded value creation perspective that can affect future evaluation practices. Cluster complementarity based evaluation is a novel methodology that is applicable to investment decisions which are central for economic development. Cluster analysis of infrastructure investments provides new and valuable data for making such investments decisions.» [ABSTRACT FROM AUTHORS]

The role of clusters in the global innovation strategy of MNEs: theoretical foundations and evidence from the Basel pharmaceutical cluster

By : Philippe Gugler, Michael Keller and Xavier Tinguely. Competitiveness Review, Volume 25, Issue 3, earlycite, 2015.

Abstract: «This paper focuses on the role of clusters as home and host country-specific advantages for multinational enterprises (“MNEs”) in the organization of their internal and external networks to optimize the diffusion and generation of new knowledge. Strategic asset-seeking investment has been a major driver of the internalization of innovation activities performed by MNEs abroad. This paper demonstrates the attractiveness of foreign clusters in the global innovation process of MNEs. Our main assumption is that location within innovative clusters may foster the ability of firms to generate new innovations. We illustrate our theoretical developments through the example of firms located in the Basel pharmaceutical clusters which have invested in other clusters abroad. Our results are based on an in-depth patent data analysis and confirm the importance of clusters in an innovation-driven industry.» [ABSTRACT FROM AUTHORS]

Insights into the creation of a successful MNE innovation cluster

By : Michele O'Dwyer, Lisa O'Malley, Stephen Murphy and Regina McNally. Competitiveness Review, Volume 25, Issue 3, earlycite, 2015.

Abstract: «This paper recounts the genesis of a successful innovation cluster among Irish-based divisions of multinational enterprises (MNEs) and Irish universities in the pharmaceutical industry. This cluster was actively ‘narrativized’ through the language of obligation, desire, competence and know-how. As such, it is typical of the ‘hero’s quest’ literary genre in which challenges are faced, obstacles are overcome, and victory is ultimately won. Importantly, in this story, the cluster was morally and pragmatically charged with dealing with significant challenges faced by the Irish pharmaceutical industry. Broader societal discourses operated as a resource for actors to use in proposing collaboration and innovation as the appropriate response to such challenges. Specifically, through narrative and discourse, actors created the necessary conditions conducive for a cluster to develop. These created a discursively constituted shared purpose which ultimately ensured successful innovation collaboration. Essentially, through narrative and discourse the key actors identified the collaboration was identified a protagonist in pursuit of a quest. By linking theoretical and empirical insights the paper offers a conceptual framework that can be used in future studies to understand the emergence of clusters.» [ABSTRACT FROM AUTHORS]

A spring-clean of Michael Porter`s attic: the Canadian telecommunications sector as an exemplar of refurbished generic strategy

By : Anthony Morven Gould and Guillaume Desjardins. Competitiveness Review, Volume 25, Issue 3, earlycite, 2015.

Abstract: «Porter’s conception of generic management strategy was created in the 1980s. It is not well adapted to industries which have proliferated in the Internet age. This article views the phenomenon of offering/user interface complexity as having competitive strategy-related consequences. Accordingly, it presents a modified version of Porter’s generic strategy framework which incorporates the dimension of complexity alongside the original dimensions of “target market” and “type of advantage.” It uses an analysis of the contemporary Canadian Telco sector to prosecute its case. The article uses an analysis of the stated competitive positioning orientations of firms operating in the contemporary Canadian Telecommunications sector to build a case about the changed nature of generic strategy in the digital age. It uses inductive reasoning to generalise findings about the Telco sector to other recently-emerged (digital-age) industries.» [ABSTRACT FROM AUTHORS]

What Makes Clusters Decline? A Study on Disruption and Evolution of a High-Tech Cluster in Denmark

By : Christian Richter Østergaard and Eunkyung Park. Regional Studies, Volume 49, Issue 5, Pages 834-849, 2015.

Abstract: « Most studies on regional clusters focus on identifying factors and processes that make clusters grow. However, sometimes technologies and market conditions suddenly shift, and clusters decline. This paper analyses the process of decline of the wireless communication cluster in Denmark. The longitudinal study on the high-tech cluster reveals that technological lock-in and exit of key firms have contributed to decline. Entrepreneurship has a positive effect on the cluster's adaptive capabilities, while multinational companies have contradicting effects by bringing in new resources to the cluster but being quick to withdraw in times of crisis.» [ABSTRACT FROM AUTHORS]

Technology transfer within China and the role of location choices

By : Mario Kafouros and Elizabeth Yi Wang. International Business Review, Volume 24, Issue 3, Pages 353–366, 2015.

Abstract : « We examine how emerging country business groups overcome various technological constraints and succeed in enhancing their performance. Our theoretical contribution lies in showing how the ability of a business unit to benefit from intra-group technology transfer depends on the idiosyncratic manner in which the group geographically configures its network of units. The findings reveal that the geographic dispersion and concentration of the units of a group alter both the ability and willingness of its business units to transfer technologies to (or receive technologies from) other units and subsequently result in different performance outcomes. The location of a business unit also determines whether or not a unit competes with other fellow units and, consequently, influences how much a unit benefits from the technologies held by the group.» [ABSTRACT FROM AUTHORS]

Interaction and Innovation across Different Sectors: Findings from Norwegian City-Regions

By : Rune Dahl Fitjar and Andrés Rodríguez-Pose. Regional Studies, Volume 49, Issue 5, Pages 818-833, 2015.

Abstract: « This article examines how different types of interaction are related to the capacity of firms to innovate in different sectors. Using a sample of 1604 Norwegian firms with more than ten employees, it analyses how interactions within the business group, with industry partners, and with research institutions and consultancies impinge on the probability of innovation for firms in six different economic sectors – manufacturing; construction; retail; accommodation and food; transport; and professional and business services – and six sector-by-skill categories – high- and low-skilled manufacturing, construction, and services. The results of ordinal regression analyses for product and process innovation show that the drivers of innovation differ widely across sectors. While exchanges internal to the firm tend to be disconnected from innovation across the board, those with scientific and industrial partners prove to be important drivers of innovation not only for firms in sectors, such as manufacturing, traditionally deemed to benefit from these partnerships, but also for sectors regarded as less innovative, such as construction. This pattern even holds for low-skilled firms in the manufacturing and construction sectors.» [ABSTRACT FROM AUTHORS]

Related Variety and Regional Economic Growth in a Cross-Section of European Urban Regions

By : Frank van Oort, Stefan de Geus and Teodora Dogaru. European Planning Studies, Volume 23, Issue 6, pp. 1110-1127, 2015.

Abstract: « This paper introduces indicators of regional related variety and unrelated variety to conceptually overcome the current impasse in the specialization-diversity debate in agglomeration economics. Although various country-level studies have been published on this conceptualization in recent years, a pan-European test has been missing from the literature until now. A pan-European test is more interesting than country-level tests, as newly defined cohesion policies, smart-specialization policies, place-based development strategies and competitiveness policies may be especially served by related variety and unrelated variety conceptualizations. We test empirically for the significance of variables based on these concepts, using a cross-sectional data set for 205 European regions during the period 2000–2010. The results confirming our hypotheses are that related variety is significantly related to employment growth, especially in small and medium-sized city-regions, and that specialization is significantly related to productivity growth. We do not find robust relationships that are hypothesized between unrelated variety and unemployment growth.» [ABSTRACT FROM AUTHORS]

Industrial development in thin regions: trapped in path extension?

By : Arne Isaksen. Journal of Economic Geography, Volume 15, Issue 3, Pages 585-600, 2015.

Abstract: « Recent theorizing of path dependence supplements the traditional view of regional path-dependent industrial development characterized by lock-in effects with paths dealing with change, that is, path renewal and path creation. Few studies, however, examine why different types of regions experience diverse path-dependent development. This article examines why organizationally thin regions are much less likely to achieve path renewal and path creation than core regions. By use of a case study of industrial development in an organizationally thin and rather peripheral region in Norway the article contends that thin regions often need external investments to avoid being trapped in path extension.» [ABSTRACT FROM AUTHOR]

Knowledge Neighbourhoods: Urban Form and Evolutionary Economic Geography

By : Gregory M. Spencer. Regional Studies, Volume 49, Issue 5, Pages 883-898, 2015.

Abstract: « This paper examines connections between the urban form of neighbourhoods in relation to the evolutionary economic geography of knowledge-intensive industries. The data presented show that firms in ‘creative’ industries tend to be located in dense, mixed-use neighbourhoods near the city core, while ‘science-based’ industries tend to be concentrated in low-density, single-use neighbourhoods in the suburbs. It is argued that these spatial patterns are related to the fact that inter-firm networks are more important in the ‘creative’ industries, while ‘science-based’ industries rely more heavily on intra-firm interactions and learning.» [ABSTRACT FROM AUTHOR]

The Rise of Second-Rank Cities: What Role for Agglomeration Economies?

By : Roberto Camagni, Roberta Capello and Andrea Caragliu. European Planning Studies, Volume 23, Issue 6, pp. 1069-1089, 2015.

Abstract: « In the last 15 years, empirical evidence has emerged about the fact that European first-rank cities have not always led national economic performance, and when they did, the difference between first- and second-rank cities in explaining national growth has not been significant. A recent work [Dijkstra, L., Garcilazo, E. & McCann, P. (2013) The economic performance of European cities and city regions: Myths and realities, European Planning Studies, 21(3), pp. 334–354] claims that second-rank cities have in fact outperformed first-rank cities, becoming the main driving forces in national economic performance. In the debate that emphasizes the role of second-rank cities in national growth, a simplified view of the role of agglomeration economies is provided; they are taken for granted in small- and medium-sized cities and only in large cities will the problem of a downturn in urban returns to scale emerge. In this paper, a more complex view is assumed, claiming that the oversimplified interpretation that urban economic performance simply depends on the exploitation of agglomeration economies and that these agglomeration economies merely depend on urban size alone should be abandoned. Some already existing theoretical frameworks in urban economics can help in recalling the role of possible bifurcations in the development path of cities, linked to the capability to attract or develop new and higher-order functions, increase internal efficiency and reach scale economies through cooperation networks with other cities (the city-network theory). All these elements work as conditions for fully exploiting agglomeration economies and ways to overcome urban decreasing returns.» [ABSTRACT FROM AUTHORS]

Path Renewal in Old Industrial Regions: Possibilities and Limitations for Regional Innovation Policy

By : Lars Coenen, Jerker Moodysson and Hanna Martin. Regional Studies, Volume 49, Issue 5, Pages 850-865, 2015.

Abstract: « This paper analyses the potential, barriers and limitations for regional innovation policy to facilitate industrial renewal in old industrial regions. It draws on a case analysis of the policy programme ‘Biorefinery of the Future’ geared to promote renewal of the forest industry in Northern Sweden. It is shown that infusion of radical emergent technology is necessary for new regional path development, but not sufficient. To avoid a singular focus on technology-push, policy should pay more attention to complementary experimentation processes in relation to demand-side characteristics, firm strategies and business models as well as regulatory aspects. Moreover, coordination between regional innovation policy and adjacent domains and levels of policy-making is needed as some of the most pressing obstacles for renewal are not specific to the region but instead to the industry at large.» [ABSTRACT FROM AUTHOR]

First- and Second-Tier Cities in Regional Agglomeration Models

By : Chiara Agnoletti, Chiara Bocci, Sabrina Iommi, Patrizia Lattarulo and Donatella Marinari. European Planning Studies, Volume 23, Issue 6, pp. 1146-1168, 2015.

Abstract: « This work has the purpose of inquiring into the presence of an urban hierarchy within second-tier city areas and alternative agglomeration models differing in their self-propelling ability and territorial sustainability. To this aim we confront regional polycentric areas, by going inside the traditional agglomeration and variety economies and the land settlement model of small–medium urban poles. In particular, the present work compares four Italian regions characterized by a territorial development driven by second-tier cities. The first two sections of the paper evaluate the functional pattern of the different urban systems and subsequently measure their rank in terms of extra-regional attractiveness on demand, which is expressed by rare services (Sections 2 and 3). Sections 4 and 5 tackle the issue of sustainability of settlements by taking into account land consumption and the degree of territorial fragmentation caused by different urbanization models. We discovered good urban performances and settlement sustainability of the second-tier cities agglomeration model in Italian regions, which is stronger when based on the co-presence of specialized small cities (which can assure a minimum amount of local demand for advanced services) and a multifunctional medium urban centre (which can ensure rarer functions). These findings bring strong recommendations on urban policies.» [ABSTRACT FROM AUTHORS]

Related Variety, Unrelated Variety and Technological Breakthroughs: An analysis of US State-Level Patenting

By : Carolina Castaldi, Koen Frenken and Bart Los. Regional Studies, Volume 49, Issue 5, Pages 767-781, 2015.

Abstract: « This paper investigates how variety affects the innovation output of a region. Borrowing arguments from theories of recombinant innovation, it is expected that related variety will enhance innovation as related technologies are more easily recombined into a new technology. However, it is also expected that unrelated variety enhances technological breakthroughs, since radical innovation often stems from connecting previously unrelated technologies opening up whole new functionalities and applications. Using patent data for US states in the period 1977–99 and associated citation data, evidence is found for both hypotheses. This study thus sheds a new and critical light on the related variety hypothesis in economic geography.» [ABSTRACT FROM AUTHORS]

Global pipelines for innovation: insights from the case of Norway

By : Rune Dahl Fitjar and Franz Huber. Journal of Economic Geography, Volume 15, Issue 3, Pages 561-583, 2015.

Abstract: « Using data on 418 Norwegian firms, the results confirm the hypotheses that innovative/radically innovative firms tend to be more involved in international personal and formal networks than non-innovative/incrementally innovative ones. While regional and national networks are much more widespread than international ones, they are not significantly positively associated with innovation. International personal networks and international links with suppliers and customers and with universities and research institutions, as well as global buzz with strangers, are positively related to innovation. This suggests that innovation management and policy, in particular in countries with a limited national innovation base, could benefit from facilitating certain international networks.» [ABSTRACT FROM AUTHORS]

Towards a Developmental Turn in Evolutionary Economic Geography?

By : Ron Martin and Peter Sunley. Regional Studies, Volume 49, Issue 5, Pages 712-732, 2015.

Abstract: « Over the past couple of decades or so there have been increasing moves within evolutionary theory to move beyond the neo-Darwinian principles of variety, selection and retention, and to incorporate development. This has led to a richer palette of concepts, mechanisms and models of evolution and change, such as plasticity, robustness, evolvability, emergence, niche construction and self-organization. This opens up a different framework for understanding evolution. This paper sets out the main characteristics of the recent and ongoing ‘developmental turn’ in evolutionary theory and suggests how these might inform a corresponding ‘developmental turn’ in evolutionary economic geography.» [ABSTRACT FROM AUTHORS]

Smart innovation policy: How network position and project composition affect the diversity of an emerging technology

By Frank J. van Rijnsoever, Jesse van den Berg, Joost Koch and Marko P. Hekkert. Research Policy, Volume 44, Issue 5, Pages 1094–1107, 2015.

Abstract: « Technological diversity is important to achieve long-term technological progress as diversity fosters recombinant innovation and renders undesirable lock-ins less likely. Many government policies influence the diversity of a technology, in particular by subsidizing collaborative innovation projects. This study investigates the influence of network position and the composition of innovation projects on the creation diversity of an emerging technology at a system level. We first conceptualize technological diversity and formulate hypotheses using a combination of innovation system and social network arguments. Empirically, we study the Dutch innovation system in relation to biogas energy technology. Our results show that the more projects are related to each other through shared actors, the less likely they are to contribute to technological diversity. This supports the arguments that diffusion of knowledge and sharing knowledge bases lead to less diversity. With regard to composition, we found that including more partners in a project is negatively related to diversity, while a greater diversity of actors in a project contributes to technological diversity. Overall, we conclude that a combination of innovation system and social network arguments provides a credible micro-level explanation for how the diversity of an emerging technology is created within an innovation system. These insights can be used to design “smart” innovation policy instruments that influence the level of technological diversity.» [ABSTRACT FROM AUTHORS]

Relatedness, Industrial Branching and Technological Cohesion in US Metropolitan Areas

By : Jürgen Essletzbichler. Regional Studies, Volume 49, Issue 5, Pages 752-766, 2015.

Abstract: « Work by evolutionary economic geographers on the role of industry relatedness for regional economic development is extended into a number of methodological and empirical directions. First, relatedness is measured as the intensity of input–output linkages between industries. Second, this measure is employed to examine industry evolution in 360 US metropolitan areas. Third, an employment-weighted measure of metropolitan technological cohesion is developed. The results confirm that technological relatedness is positively related to metropolitan industry portfolio membership and industry entry and negatively related to industry exit. The decomposition of technological cohesion indicates that the selection of related incumbent industries complements industry entry and exit as the main drivers of change in metropolitan technological cohesion.» [ABSTRACT FROM AUTHOR]

Development And Modern Industrial Policy In Practice

Edited by Jesus Felipe. Edward Elgar Publishing Limited, Cheltenham, UK, 2015.

Abstract: « Development and Modern Industrial Policy in Practice provides an up-to-date analysis of industrial policy. Modern industrial policy refers to the set of actions and strategies used to favor the more dynamic sectors of the economy. A key aspect of modern industrial policy is embedding private initiative in a framework of public action to encourage diversification, upgrading, and technological dynamism to achieve development in the twenty-first century. The book reviews key questions that policymakers ask about industrial policy, such as: who selects sectors; what is the rationale for sector selection; what are the main tools to promote sectors?, what is the role of human capital; and what are the mechanisms for monitoring and evaluation? Expert contributors discuss how to undertake industrial policy effectively and examine the experiences of Australia, the EU, the Republic of Korea, Malaysia, and the US. Policymakers, multilateral development institutions, and scholars will find the discussions on industrial policy, structural transformation, economic diversification and upgrading, and capabilities to be useful and practical.»