Competencies of firms, external knowledge sourcing and types of innovation in regions of Europe

Abstract

Many innovation studies have been focusing on a narrow concept of innovation such as the generation of patents or new products. The performance of companies, however, often depends on innovation defined from a broader perspective. This includes process, organisational and market innovations as was pointed out already by Schumpeter. Drawing on the concept of knowledge bases and innovation networks we argue that these different types of innovation require both internal competencies, and technological and market knowledge from various kinds of external sources. These can be located at regional, national and international levels. In the present paper we are going to analyse evidence from eight European countries in this respect. Based on a multivariate model we are able to show that product, process and organisational innovations indeed rely on quite different types and sources of knowledge, and that in addition also the institutional characteristics of regions and countries matter.