Innovation Clusters in Technological Systems: A Network Analysis of 15 OECD Countries for the Middle '90s

The paper aims at investigating how innovations cluster in different technological systems (TSs) when their “techno-economic", rather than “territorial" space is considered. Innovation clusters of economic sectors are identified by applying network analysis to the intersectoral R&D flows matrices of 15 OECD countries in the middle '90s. Different clusterization models are first tested in order to detect the way sectors group on the basis of the embodied R&D flows they exchange. Actual clusters are then mapped in the different TSs by looking for intersectoral relationships which can be qualified to constitute “reduced-TSs" (ReTSs). In all the 15 TSs investigated the technoeconomic space appears organized in hierarchies, along which its constitutive sectors group into clusters with different density and composition. Once ReTSs are looked for, the 15 TSs display highly heterogeneous structures, but with some interesting similarity on the basis of which different clusters of TSs can be identified in turn.Innovation clusters; technological systems; R&D expenditure; embodied innovation flows

The General Profile of the Outsourcing Firm Evidence for a Local Production System of Emilia Romagna

The paper aims at ‘embedding’ the outsourcing firm by considering it as a four-fold unit of analysis: i.e. as an organizational, production, industrial and innovation unit. Theoretical correlations between outsourcing decisions and outsourcing variables are formulated and then tested with respect to a representative cross-sectional sample of firms of a local production system in Emilia Romagna (that is, Reggio Emilia). The main result of the paper is that outsourcing decisions are indeed affected by the organizational and industrial relations typical of the context firms are embedded in. Furthermore, the general profile of the Reggio Emilia outsourcing firm is strategic rather than operative. In particular, tapping-into the provider’s resources and competences to eventually promote technological innovation seems more relevant than searching for lower costs by contracting out.Outsourcing; transaction costs; industrial relations; innovation

Environmental innovations, local networks and internationalization

This paper investigates the drivers of the environmental innovations (EI) introduced by firms in local production systems (LPS). The role of firm network relationships, agglomeration economies and internationalization strategies is analysed for a sample of 555 firms in the Emilia-Romagna region, North-East of Italy. Cooperating with 'qualified' local actors - i.e. universities and suppliers - is the most important driver of EI for most firms, along with their training policies and IT innovations. The role of agglomeration economies is less clear and seems to depend on the EI propensity of more locally oriented firms playing in industrial district areas, which might even turn agglomeration economies into dis-economies. Networking effects and agglomeration economies are instead found to strongly promote the adoption of EI by multinational firms, thus highlighting the importance of local-global interactions. We provide some interesting findings for particular kinds of challenging EI in such fields as CO2 abatement and ISO labelling, generally extending the analysis of EI drivers by joining local and international factors.Eco-innovation, foreign ownership, networking, district, agglomeration economics, local production systems

Environmental Innovations, Local Networks and Internationalization

This paper investigates the drivers of the environmental innovations (EI) introduced by firms in local production systems (LPS). The role of firm network relationships, agglomeration economies and internationalization strategies is analysed for a sample of 555 firms in the Emilia-Romagna region, North-East of Italy. Cooperating with ‘qualified’ local actors – i.e. universities and suppliers – is the most important driver of EI for most firms, along with their training policies and IT innovations. The role of agglomeration economies is less clear and seems to depend on the EI propensity of more locally oriented firms playing in district areas, which might even turn agglomeration into dis-economies. Networking effects and agglomeration economies are instead found to strongly promote the adoption of EI by multinational firms, thus highlighting the importance of local-global interactions. We provide some interesting findings for particular kinds of challenging EI in fields as CO2 abatement and ISO labelling, generally extending the analysis EI driver by joining local and international factors.Eco-Innovation, Foreign Ownership, Networking, District, Agglomeration Economics, Local Production Systems

From techno-scientific grammar to organizational syntax. New production insights on the nature of the firm

The paper aims at providing the conceptual building blocks of a theory of the firm which addresses its "ontological questions" (existence,boundaries and organization) by placing production at its core. We draw on engineering for a more accurate description of the production process itself, highlighting its inner complexity and potentially chaotic nature, and on computational linguistics for a production-based account of the nature of economic agents and of the mechanisms through which they build ordered production sets. In so doing, we give a "more appropriate" production basis to the crucial issues of how firm's boundaries are set, how its organisational structure is defined, and how it changes over time. In particular, we show how economic agents select some tasks to be performed internally, while leaving some other to external suppliers, on the basis of criteria based on both the different degrees of internal congruence of the tasks to be performed (i.e. the internal environment), and on the outer relationships carried out with other agents (i.e. the external environment)

The "potential" face of absorptive capacity. An empirical investigation for an area of 3 European countries

This paper draws on the multi-dimensional characterization of absorptive capacity (AC) to empirically investigate the antecedents and the effects of its "potential" dimension (PAC): i.e., the firm's capacity of acquiring and assimilating external knowledge, as distinguished from its "realized" transformation and exploitation (RAC). Based on a sample of about 10,500 firms for an area of 3 EU countries (Italy, Germany and Spain) we find that the firm's reliance on external knowledge in general increases its PAC, and that this effect is magnified by the internal shocks the firm faces. However, both these effects find relevant exceptions when different kinds of external sources are considered, at different kinds of distance from the absorbing firm. Unexpectedly, social integration mechanisms in the firm makes PAC less, rather than more, inductive of innovation outcomes. On the contrary, the human capital of the firm has a positive moderating role on the PAC effects. A possible trade-off in the exploitation of the externally assimilated knowledge is suggested.absorptive capacity; external knowledge; innovation

Outsourcing, Delocalization and Firm Organization: Transaction Costs vs. Industrial Relations in a Local Production System of Emilia-Romagna

The paper aims at investigating how far transaction costs economics (TCE) concurs in the explanation of outsourcing decisions in firms characterized by “thick’ industrial relations, that is where unions and employees are involved in, and are sometimes able to affect, the relative managerial decisions through participatory formal and informal mechanisms. What is more, the paper aims at investigating whether the concurrence of TCE and industrial relationships has different outsourcing implications for firms which are also involved in delocalization strategies. An empirical model, translating a set of theoretical correlations between an original outsourcing extent variable, on the one hand, and a number of proxies related to TCE, industrial relations and delocalization, on the other hand, is applied to a representative sample of manufacturing firms for the local production system of Reggio Emilia (RE) (in Northern Italy). Overall, the empirical application shows that the role of TCE in accounting for outsourcing in the LPS of RE is quite blurred, if not even contradicted, while the role of industrial relations emerges instead quite straightforwardly. Finally, RE firms generally use outsourcing and international delocalization in a complementary way, but the correlation between outsourcing and delocalization turns out to be dependent on the kind of activity and of the nature of the delocalization channel.Outsourcing; firm organization; transaction costs; competences; innovation; local production systems

On the R&D giants' shoulders: Do FDI help to stand on them?

The paper investigates the extent to which outward FDI affect the MNC's capacity of entering (and remaining in) the club of top R&D world investors, benefiting from performance gains in both financial and economic markets. By merging the European Industrial Research and Innovation Scoreboard with the fDi Markets dataset, we find supporting evidence. Increasing the number of FDI projects helps firms overcome the discontinuities that, in the distribution of R&D expenditures, separate the group of the largest world R&D investors from the top of them. The same is true for the number of FDI projects in R&D, which are also more important than greater FDI portfolios in becoming a top R&D spender. Furthermore, unlike FDI in general, more FDI in R&D guarantee firms to remain in this top club of firms as it increases their capacity of resisting competition for a place among the top R&D spenders. Results at the extensive margin (i.e. the number of FDI projects) are confirmed with respect to the scale of FDI projects (i.e. at the intensive margin). However, increasing their size is not enough to become one of the highest ranking R&D firms. Policy implications about the support to R&D internationalisation are drawn accordingly.JRC.J.2-Knowledge for Growt

Firm exit and spatial agglomeration. Evidence on the resilience of Italian provinces

The paper investigates the effect of spatial agglomeration on firm exit. In particular, the role of specialization and local variety in production is addressed. The extent to which industrial clusters can be actually retained industrial districts is also considered. Empirical evidence is provided for a large panel of Italian provinces and manufacturing sectors over the period 1995-2007. Urbanization economies significantly diminish firm exit of industries at the local level. Specialization also does, but only up to a certain level. Firm exit is also reduced by industrial variety, even far from the local specialization core. Industrial districts, instead, are neither less nor more resilient to industrial dynamics, unless variety is controlled for.Firm exit, Firm survival, Industrial districts, Spatial agglomeration, Related variety, Unrelated variety

Network Analysis of Eight Technological Systems

The systemic nature of technological change is now a well established result of much literature, of both theoretical (e.g. Carlsson & Stankiewicz, 1991; Lundvall, 1992; De Liso & Metcalfe, 1996; Edquist, 1997) and empirical (e.g. Nelson, 1993; Patel & Pavitt, 1994; Saxenian, 1994; Carlsson, 1995) nature. As the innovative process does not follow a ‘linear’, isolated path, but occurs within specific institutional contexts of interactive relationships between different organisations, concepts such as those of innovative and technological systems appear to be the most appropriate units of analysis. However, several specifications have been provided, by referring to both functional and geographical boundaries, which are differently characterised and thus determine differences in the level of analysis and in methodologies. As far as this paper is concerned, we will adopt a broad and structured notion of technological system that we deem particularly suitable to retain relationships that are not only innovative as such, but also techno-economic - i.e. related not only to the functioning of the innovative and of the production sub-systems, but also of the market (both domestic and foreign) and the institutional infrastructure. footnote Furthermore, our definition refers to national technological systems, because we claim that, even in a world of increasing globalisation and localisms, national boundaries still matter: for example, interesting idiosyncrasies and clusters emerge by looking at the ‘configurations’ that technological systems assume in different countries (Leoncini & Montresor, 1998). This paper aims at measuring and comparing some of the key relationships within a technological system by considering its intersectoral techno-economic linkages. footnote We thus intend to highlight the role of innovative flows of different magnitude within it, the location of its ‘cores’ and ‘terminals’, the inward or outward configuration of its partitions, from both a ‘cross-sectional’ and a ‘time series’ comparative perspective. The application refers to eight OECD countries along three temporal spans (see Appendix A1 for full details). It consists of a network analysis of the intersectoral innovation flows matrices we have obtained by disaggregating each technological system into 15 manufacturing sectors (Appendix A2). The paper is organised as follows. In Section 2 the methodological issues about innovation flows matrices and network analysis are briefly reviewed. Section 3 describes the empirical results. Section 4 contains the main conclusions