Knowledge-intensive business services as an element of learning regions - the case of Baden-Wurttemberg

In the globalizing process, the production of knowledge and the management of information gain increasing strategic importance for the competitiveness of regions. Theoretical conceptions of the learning economy and the learning region emphasise that the capability to learn is crucial for the economic success of firms, regions and national economies. Given this background, the proposal will focus on the significance of knowledge?intensive business services for innovation and learning. So far, knowledge about innovative activities of service firms and their significance in the technological change is existent only to a low extent. For a long time, research concerning technological change as well as innovations focussed on the manufacturing industry and the development and transfer of technological knowledge. The dynamic growth of business?related services has now been documented in numerous studies not only in Germany, but also in other European countries. Their role in innovativeness and competitiveness in the current situation of structural change has, however, received little attention. A major reason is that it is very difficult to establish the quantitative contribution these services make to innovation at both the macro and micro levels. The present state of the statistics for services and innovation make it impossible to determine what the contribution is. From a qualitative point of view, however, this service segment is an important element in the innovation system. The contribution of knowledge?intensive business service firms to innovation is not just the result of their own innovative activities. It also results from the indirect and positive feedback effects which originate on the demand side as a result of the use of the services by client firms. The speech will focus on specific development trends of knowledge?intensive business services in the regional innovation system of Baden?Wuerttemberg, and the role of these services in the present regional restructuring process will be examined.

The organisational decomposition of the innovation process : what does it mean for the global distribution of innovation activities?

The starting point for this paper is a fundamental change currently occurring in the way innovation is organised in the developed countries: it tended to be centralised at or near headquarters but is now much more decentralised within the company. Equally if not more significant, innovation activities that used to be carried out inhouse by innovating firms themselves are carried out by independent suppliers of knowledge intensive business services, or are transferred to key suppliers. The question driving this paper is how this ‘organisational decomposition of the innovation process’ changes the global distribution of innovation of activities. Does it contribute to their global dispersal to the developing world or does it strengthen the existing concentration? Since this is uncharted territory the paper seeks guidance from theory and lays out an agenda for empirical research. Keywords: innovation; outsourcing; global; knowledge; innovation system; global value chain

Path Dependency and Path Plasticity: the Co-evolution of Institutions and Innovation - the German Customized Business Software Industry

Path dependence and the co-evolution of technology and institutions is a key concept to understand the dynamics of structural change at the level of firms, sectors and multi-level spatial scales. The concept of path dependency is often used in economic geography to explain the economic specialisation and long-standing success as well as crises and economically unfavourable development of regions. The understanding of the institutional dynamics within a well-established technological and institutional development path of territorial settings is a central but to a large extent also an open issue. The paper focuses on the role of institutions and modes of institutional change in path dependent processes of innovation, knowledge accumulation and competence building in innovation systems. Processes of institutional change are mainly seen either as incremental, leading to continuity of the present technological path or as abrupt and disruptive, leading to the breakdown and replacement of institutional settings. By using the notion of 'path plasticity' the paper argues that paths are not coherent in themselves. There is 'path plasticity', which describes a broad range of possibilities for the creation of innovation within a dominant path of innovation systems. Plasticity results among others from the elastic stretch of institutions and institutional arrangements and their interpretative flexibility through actors. Associated with this approach, the paper takes a closer look at path plasticity, its relation to institutional change and the role of geography. Empirical evidence is provided by exploring the evolution of the German software industry. Although comparative disadvantages are caused by the established institutional setting of the national innovation system, a sub sector of this industry - customized business software - was able to become internationally competitive. The customized business software industry can be seen as an example of innovation and successful change in what is described as non- favourable institutional settings.