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Forthcoming in Journal of Technology Transfer
Regional Innovation Systems: The Integration of Local ‘Sticky’ and
Global ‘Ubiquitous’ Knowledge
By
Bjørn T. Asheim, Centre for Technology, Innovation and Culture,
Science Park, P.O. Box 1108 Blindern, N-0349 Oslo, and Department of
Sociology and Human Geography, P.O. Box 1096, Blindern, N-0317 Oslo,
University of Oslo/ STEP Group, Oslo, Norway
(E-mail: b.t.asheim@sgeo.uio.no)
and
Arne Isaksen, STEP Group, Storgaten 1, N-0155 Oslo, Norway
(E-mail: arne.isaksen@step.no)
Abstract
The paper examines how firms in three regional clusters in Norway dominated by
shipbuilding, mechanical engineering and electronics industry, respectively exploit both place-
specific local resources as well as external, world-class knowledge to strengthen their
competitiveness. From these case-studies we make four points: 1) Ideal-typical regional
innovation systems, i.e. regional clusters ‘surrounded’ by supporting local organisations, is
rather uncommon in Norway 2) External contacts, outside of the local industrial milieu, are
crucial in innovation processes also in many SMEs. 3) Innovation processes may
nevertheless be regarded as regional phenomena in regional clusters, as regional resources
and collaborative networks often have decisive significance for firms’ innovation activity. 4)
Regional resources include in particular place-specific, contextual knowledge of both tacit and
codified nature, that, in combination, is rather geographically immobile.
1
1. Introduction
Even in a globalising economy with its increased interdependency between firms in
different nations, several authors simultaneously point to an increased importance of
place-specific and often non-economic factors in creating competitive advantage and
differences in regional economic growth rate. Thus, Porter argues that ‘the enduring
competitive advantages in a global economy lie increasingly in local things –
knowledge, relationships, motivations – that distant rivals cannot match’ (Porter 1998:
78).
The crux of this regionalisation argument is that the regional (sub-national) level, and
specific local and regional resources may still be important in firms’ effort to obtain
global competitiveness. Thus, a wide range of literature has emphasised
regionalisation as at least part of the solution to understanding dynamic industrial
development in some places as well as solving regional economic development
dilemma stemming from the new competition in the globalised economy (Pike and
Tomaney 1999).
The first part of the paper analyses the relevance of the regionalisation argument in
interpreting firms’ innovation activity in three regional clusters in Norway. To what
extent do firms in the clusters rely on unique regional resources and local co-
operation when innovating? Do the firms form regional innovation systems? The
second part of the paper discusses what the results from the case studies mean for our
theoretical understanding of regional innovation systems.
2. Innovation performance in three regional clusters
The analyses of the three regional clusters focus on how firms exploit the
geographical scale and scope of knowledge infrastructure and innovation systems to
strengthen their competitive advantage. Firms in different part of mechanical
engineering dominate the three regional clusters. The clusters contain a few large
scale enterprises (LSEs, with 250 employees or more), but are dominated by small
and medium sized enterprises (SMEs) (Table 1). At Jæren, the firms studied all
belong to the network organisation TESA (Technical Cooperation), which are the
heart of the mechanical engineering sector in the area. In the other regions, we analyse
innovation performance in a specific branch in the areas.
The branches constitute a regional specialisation. The regions are strongly
overrepresented with jobs in relation to the national average within these branches.
Thus, the location quotient varies between 10 in the electronics industry in Horten and
5 in the mechanical engineering industry at Jæren1. The three cases constitute regional
clusters in the way Porter defines clusters as ‘geographic concentrations of
interconnected companies and institutions in a particular field. Clusters encompass an
array of linked industries and other entities important to competition. They include,
1 The numbers refer to 1990 (Isaksen and Spilling 1996). The location quotient (LQ) is the share of
jobs in the selected branches of industry in the regions in proportion to the branches’ share of jobs in
the country as a whole. Thus, the LQ of 10 for the electronics industry in Horten means that Horten has
10 times as many ‘electronics’ job as ‘expected’ from the number of jobs in the electronics industry in
Norway as a whole.
2
for example, suppliers of specialized inputs such as components, machinery, and
services, and providers of specialized infrastructure’ (Porter 1998: 78).
Table 2: Overview of the three regional clusters
Horten Jæren Sunnmøre
Number of inhabitants in
region
24.000 90.000 77.000
Branch of industry studied Electronics Mechanical
engineering
Shipbuilding and
suppliers
Number of firms in branch 25 13 (TESA
members)
90
Number of employees 1.900 3.000 4.200
Firm structure 1-2 LSE, the
rest SMEs
4 LSEs, 9 SMEs A few LSEs, most
SMEs
Location quotient (ca) 10 5 8
Number of firm interviews 11 9 7
Map 1: Location of the three cases
.
.
Jæren
Mechanical
engineering
Sunnmøre
Ship building
Horten
Electronics
.
3
Shipbuilding at Sunnmøre – incremental innovations in a regional network
Sunnmøre constitutes the largest ship building area in Norway, and has been among
the winner regions concerning ship building in Norway since the 1970, revealing job
growth. The ship building industry at Sunnmøre covered 4.200 jobs in 1997, of which
1.600 were found in 14 shipyards, that concentrate on building different types of
specialised ships. The remainder 2.600 jobs were spread on 80 equipment supplier
firms and ship designers.
The competitiveness of the ship building industry at Sunnmøre is to a large degree
based on the innovation capability in the cluster. Analytically, we may distinguish
between four main (but inter-linked) ways in which mainly step-by-step
improvements of existing products takes place in the area, i.e. 1) by local user-
producer interaction, 2) as incremental innovations on the shop floor, 3) by local
knowledge spill-over, and 4) by means of cooperation via local organisations.
Regarding local user-producer interaction, a main driving force behind continual
incremental improvements of products is to satisfy new demands and needs by
customers and users. Thus, for equipment suppliers, local shipyards are important
sources of innovation. Local shipping consultants, who design and construct new
ships, also have an important role in mediating demands and specifications on
products to yards and equipment suppliers. Ship yards have long-term cooperation
with some ship owners, that often return to the yards to discuss new solutions and
build new ships.
In the ship building industry, we may also distinguish between customers and users as
sources of innovation. The ‘end’ customers are the shipping companies, while
individual users are fishermen and seamen. Discussions with skippers, chief engineers
and other crew members give important feedback on how the firms’ – and
competitors’ – products work, as well as suggestions for improvements. Sunnmøre is
an important fishing district, as well as an important shipping area, especially for
ships serving the offshore activity in the North Sea and elsewhere. The contact with
users occurs when fitters, service workers and product developers visit shipping
companies or ships. However, a lot of contacts take place when people meet in their
spare time, or meet on ferries and at airports, and then discuss how different products
work, what to do better etc. The contact is facilitated by, for example, seamen and
product developers being part of the same local culture and sharing some common
knowledge and experience.
A second main way in which innovation occurs at Sunnmøre is as incremental
improvements on the shop floor, relying on experience based competence by
engineers and workers. This kind of innovation also reflects a common responsibility
in the local community of developing the ship building industry and, consequently,
the community. This attitude is seen in the drive, the enthusiasm and loyalty of the
work force, i.e. when workers exert themselves to find better ways to do things,
leading to frequent, smaller innovations. These are attitudes rooted in the way the ship
building industry was established and developed in the area. The firms are mainly
started by local entrepreneurs to supply a local market. The workers have to a small
degree considered themselves as a proletariat, and the organised labour movement has
traditionally attained only a weak foothold in this part of the country. Entrepreneurs,
firm leaders and workers share the same attitudes with a dominance of the self
4
employed life mode, stimulated by traditions of collective entrepreneurship through
cooperatives (Wicken 1994).
Innovation and learning is further stimulated by knowledge spill-over and technology
transfer between local firms. The cluster contains a varied set of specialised firms,
denoting that firms may find other firms to consult and/or buy specialised competence
from. Knowledge spill-over takes place when firms cooperate in specific project,
when firms obtain advice from neighbouring firms, in personal contacts between
workers in different firms, and through job shifts. Experience based competence is
transferred in informal circumstances outside working hours. Employees meet
privately discussing good and bad experiences concerning the use of production
equipment, how to solve specific problems and so on. Tacit, specific knowledge is
more or less a common resource base in the ship building cluster, and firms obtain
useful feedback and ideas, conditioned by their location at Sunnmøre.
The fourth main way in which innovation occurs is by means of cooperation through
local organisations. Thus, a ‘thick’ institutional infrastructure of vocational schools, a
technical college and the three associations, The Mechanical Engineering Association
in the district of Ulstein, Maritime Nordvest and Nordvest Forum, stimulates local
cooperation, competence building and some innovation activity in production
methods. The Associations are established by and for local firms. The Mechanical
Engineerig Association has for example four main tasks: vocational training, the
promotion of local cooperation and common understanding (thus, firm leaders agree
informally of not competing on wages in order to reduce local wage inflation), attract
inward investments, and lobbying.
Although the example from Sunnmøre focuses on incremental innovations stimulated
by local cooperation and knowledge spill-over, innovations nevertheless increasingly
involve the use of R&D-based knowledge. Thus, several firms put more efforts into
research and development, to go beyond the mere incremental innovation activities in
order to fulfil customers’ demand. Several larger firms have established R&D-
departments to accomplish more basic product development, for example to obtain
increasing speed and less weight on ships and the use of new materials.
This innovation activity often takes place in cooperation between the R&D-
department and the engineering and market departments inside companies. Firms also
cooperate with external R&D-institutes, most often with SINTEF in Trondheim, the
largest technical research institute in Norway. Some firms also collaborate with
similar institutes in other countries. The large and/or advanced firms at Sunnmøre
have international customers, and must cooperate with the most competent R&D-
milieus within their sector. Thus, firms are interacting with national and even
international innovation systems.
Thus, firms make use of both local competence and global available R&D-
competence. To be able to continue as a leading producer of advanced ship, the
second largest shipyard in the region, Kværner Kleven, considers it to be of the
utmost importance to be located in a maritime milieu and utilise the total available
competence in this milieu. The milieu of relevance to the shipyards includes both the
regional ship building cluster, with users, suppliers, and a competent work force, as
well as access to the competence and cooperation with SINTEF and inside the
5
Kværner coporation. (At the time of the interviews the yard was owned by Kværner,
now it has been bought back by local entrepreneurs, which could result in losing
access to some competence inside Kværner).
Technological Cooperation at Jæren
Although much smaller than industrial districts in the Third Italy, one of the best
examples of an industrial district type development in Norway is Jæren, located in the
south-western part of Norway (cf. Map 1). Here an organisation called TESA was
established by local industry in 1957, with the aim of supporting technological
development among the member firms, which were small and medium-sized, export-
oriented firms producing mainly farm-machinery. This has, among other things,
resulted in the district today being the centre for industrial robot technology in
Norway with a competence in industrial electronics/micro-electronics far above the
general level in Norway.
In 1994 TESA had 13 member firms with more than 2.800 persons employed and a
turnover of 2.2 billion NOK. The TESA firms have overall a very high export share
with an average of 63%. However, in some of the firms a far larger share is exported;
some firms had an export share of more than 90% in 1992 among them the two
largest, ABB Flexible Automation (paintings robots) with 96% and Kverneland
(farm-machinery) with 94%. According to the firms, without the inter-firm
technological cooperation taking place within TESA, the development of this very
strong competitive advantage would not have been possible.
The close, horizontal inter-firm cooperation and interacting learning processes,
resulting in the development of core technologies, existing in this district, is rather
unique in an international context. The technological cooperation was strongly
dependent on the high level of internal resources and competence of the firms, and did
not originally involve R&D-institutes in the regional capital of Stavanger. However,
in later years, regional and national R&D-institutes have gradually become more in-
volved in the R&D-work.
As part of the work to promote the member firms’ competitive advantage, TESA took
active part in the establishment of JÆRTEK (Jæren’s technology centre) in 1987. The
aim of JÆRTEK is to offer training to prepare workers and pupils in technical schools
for the advanced industrial work of tomorrow, and to secure the competence basis for
a continued, rapid technological development. To achieve this, the first complete
computer-integrated manufacturing (CIM) equipment in Norway was installed in
JÆRTEK.
The most well-known firm at Jæren is ABB Flexible Automation, which was bought
by ABB in the late 1980s. Today the firm supplies around 70% of the European
market for painting robots to the car industry, and has also been upgraded to become a
“supplying unit” in the ABB corporation, which has resulted in production capacity
for painting robots being transferred to Jæren from Germany.
The reason for the success story of ABB Flexible Automation has partly to do with
the informal, tacit knowledge and social qualifications of the work force (i.e.
6
Marshall’s ‘industrial atmosphere’), and partly to do with localised learning based on
‘sticky’ contextual knowledge. This refers to ‘disembodied’ knowledge which are not
embodied in machinery, but are the result of positive externalities of innovation. Such
knowledge is often constituted by a combination of place-specific experience based,
tacit knowledge and competence, artisan skills and R&D-based knowledge. These
factors were recognised by ABB as being extremely important for the competitive
advantage of the Jæren plant, and which, due to their ‘stickyness’, could only be
exploited by being present in the region.
Today, the focus on technological cooperation has been somewhat reduced, and the
focus on organisational, managerial and strategic issues has increased. The decreasing
focus on local cooperation within TESA to promote technological innovations is
primarily a result of the two parallel development trends of globalisation and
corporasation that has taken place the last ten years. This development has resulted in
many of the firms ‘growing out’ of the district, when it comes to technological
development. In addition, the mechanical engineering firms at Jæren have more
limited innovation cooperation with national R&D-institutes, as these often do not
have the kind of competence the firms need with respect to product innovations. In
this situation, most of the manufacturing firms at Jæren apply two strategies to find
relevant R&D-based competence. The first is to use foreign innovation systems,
preferentially specialised R&D-institutes and universities in Sweden and Germany,
which both have a large manufacturing industry. The second strategy is to utilise
R&D-departments inside the corporations (if the firms are part of a large international
corporation) or research in cooperation with foreign, strategic partners.
The TESA office is now located in the new science park in Stavanger, in the
proximity of Rogaland Research and Stavanger Regional College. This will
strengthen the close relation to both research institutes, other centres of competence,
local public authorities and educational institutions. Thus, TESA will also have a
potential important role to play in the future in promoting the industrial renewal
necessary to upgrade some of the more traditional firms in, for example, the farm-
machinery industry to higher value-added production. This is especially the case with
respect to the question of the future role in this upgrading process of local knowledge
and localised learning processes in the context of globalisation and corporasation. The
basis for continuous use of the local production system as a strategy of increasing the
innovativeness and competitiveness of the firms located in this area must be said to be
good against the background of the high technological competence represented by the
TESA-firms, and the role of TESA as a network based development coalition with
long-term cooperation between workers, managers and different actors at the regional
level (Asheim and Pedersen 1999).
The electronics industry in Horten – commercialisation of ‘national’ research
The electronics industry in Horten comprises about 1.900 jobs and 25 firms, thus
constituting one of the largest electronics cluster in Norway. The motive power in the
local electronics industry is the large system houses and OEM-suppliers (Original
Equipment Manufacturers). The system houses have their own, highly advanced
products, often produced in small batches, which are sold to final customers on
national and international markets. Currently, Horten has nine system houses with
nearly 1.000 employees. The OEM-suppliers have their own products as well, but
7
these are components used by (mostly international) system houses. Horten has three
OEM-suppliers employing nearly 450 people. In addition, the electronics cluster in
Horten includes about 13 subcontractors with 500 jobs, that serve system houses and
OEM-suppliers in Horten, and in other parts of Norway and Scandinavia.
The systems houses and OEM-suppliers are very product innovative. Many firms in
Horten develop patented products, systems and solutions new to their niches on the
world market, and the firms generally have relatively high R&D-costs. The firms’
innovation activity mainly takes place in cooperation with national (and international)
technological R&D-institutes. Large, mainly national, customers, also form part of the
innovation system in acting as early and demanding customers through testing
prototypes, giving feedback and making claims on products. Other advanced firms
and suppliers complement the firms’ internal competence in innovation projects. In
addition, much of the innovative activity and learning takes place inside the firms,
which have large R&D-departments and many engineers, and also in cooperation with
other units within a corporation given the firms are part of such an organisation.
The large system houses and OEM-suppliers in Horten were originally established
through the commercialisation of R&D-results from some Norwegian technological
R&D-institutes, and have a long history of interacting with these institutes. One of
these is situated in Horten itself (a branch of the Defence Research Institute), the
others in Oslo and Trondheim. Technology were transferred from the organisations to
the firms, both when the firms were founded and also in connection with some later,
major technological transformations in the firms. Public initiatives were important in
the establishment and in further stimulating the innovativeness of the electronics
industry in Horten. An explicit national effort to create a knowledge-based Norwegian
electronics industry lies behind much of the development taking place in this area.
Today, much more interactive cooperation and learning occur through cooperation in
concrete innovation projects between firms and R&D-institutes as well as due to the
movement of individuals between different firms and organisations.
The systems firms and OEM-suppliers in Horten have partly grown out of the national
innovation system that they rose from, through collaborating increasingly on product
development with foreign R&D-institutes and firms. Foreign corporations own three
of the system firms and OEM-suppliers. The Horten firms, however, have control
over their core technology and competence inside the corporations. For example,
AME Space (130 employees) is the only firm inside Alcatel to master the SAW-
technology (Surface Acustic Wave). The competence is embedded in human capital
and in personal relations between researchers in the firm and in Norwegian R&D-
institutes, thus, the competence may be difficult to transfer.
Business relations in Horten are historically integrated in national, and increasingly in
international, rather than local social structures. Nevertheless, the local level has
revealed increasing significance for some parts of the innovation activity in the
electronics industry in Horten since the 1980s. The importance of the local level
concerns in particular the unique competence build up among labours in the area, for
example gained through several years of trial and error in innovation projects, and by
the local subcontractors. The local subcontractors have largely started since 1980 as a
result of the system firms closing down most of the production in-house.
8
The local subcontractors are not involved in product innovations as such. However,
they play an increasingly important role in transferring prototypes into effective
industrial production, and have been involved in manufacturing at an earlier phase the
last ten years. Instead of just receiving drawings and documentation from their
customers in order to produce, the subcontractors increasingly give advice and
comment on drawing and design before the product is finally developed. The
intention is to obtain products that can be produced and tested effectively, and using
the cheapest usable components. Organisational innovations occur in the local
production system through more long term and binding cooperation between system
firms and suppliers. Location close to suppliers is an advantage to industrial
development as well as to start ups of new production processes. It is easier to
organise fast and frequent meetings to discuss solutions and undertake changes of a
new production start up, if important suppliers of components and modules have a
proximate location.
3. What about regional innovation systems?
What do the results from the three empirical studies mean for our theoretical
understanding of regional innovation systems? The regionalisation argument referred
to in the introduction has lead to increasing focus on the term regional innovation
system. Regions are seen as important bases of economic coordination at the meso-
level: ‘the region is increasingly the level at which innovation is produced through
regional networks of innovators, local clusters and the cross-fertilising effects of
research institutions’ (Lundvall and Borrás 1997: 39).
Agglomerations, and in particular regional clusters, are, thus, regarded as places
where close inter-firm communication, socio-cultural structures and institutional
environment may stimulate socially and territorially embedded collective learning and
continuous innovation. The crux of the argument is that the proximity between
different actors makes it possible for them to create, acquire, accumulate and utilise
knowledge a little faster than firms outside of knowledge intensive, dynamic regional
clusters (Maskell et. al. 1998). Much of the regional capability found in dynamic
regional clusters is rooted in inter-firm networking, inter-personal connections, local
learning processes and ‘sticky’ knowledge embedded in social interaction. The
‘stickiness’ of some form of knowledge is seen as one of the few remaining genuinely
localised phenomena in the current global economy (Malmberg 1997). Then, unique
regional capabilities cannot be transferred to other places, ‘it can only be built up over
time’ (Lawson and Lorenz 1999: 310).
Regional innovation systems (RIS) is partly a new theoretical construct in order to
analyse and grasp important aspects of the working of regional clusters, a reference to
some actual development tendencies in the building of networked innovation
architectures in some regions, as well as a tool in policy making to create systems of
innovation in support of business competitiveness on a regional scale (Cooke 1998).
RIS may be delimited by first defining regional clusters, that are geographically
bounded concentrations of interdependent businesses (Rosenfeld 1997). Although
firms in regional clusters may cooperate with firms, R&D-institutes etc. in many
places, the firms are part of local networks, often in the form of production systems,
where the shipbuilding industry at Sunnmøre is a good example. However, the firms
may be interlinked in other ways, for example by the use of a common knowledge
9
base (as seen by the TESA cooperation at Jæren), the same raw materials, and
generally base their interaction on social values and collective visions that foster trust
and reciprocity.
Regional innovation system denotes regional clusters surrounded by ‘supporting’
organisations. Basically, regional innovation system consists of two main types of
actors and the interaction between them (Asheim and Isaksen 1997). The first actors
are the firms in the main industrial cluster in a region including their support
industries. Secondly, an institutional infrastructure must be present, i.e. research and
higher education institutes, technology transfer agencies, vocational training
organisations, business associations, finance institutions etc., which hold important
competence to support regional innovation. Thus, the development from a cluster to
an innovation system may require (i) more formally inter-firm innovation
collaboration between firms in the cluster, and (ii) a strengthening of the institutional
infrastructure, i.e. that more knowledge providers (both regional and national) are
involved in innovation cooperation.
Different types of regional innovation systems
However, it is important, analytically as well as politically, to distinguish between
different types of RIS. Thus, Asheim (1998) distinguishes between three main groups
of RIS in order to capture some conceptual variety and empirical richness in this
phenomenon, which resemble the typology of Cooke (1998). The first type may be
denoted as territorially embedded regional innovation network (Table 1), where firms
base their innovation activity mainly on localised learning processes stimulated by
geographical, social and cultural proximity without much interactions with knowledge
organisations. The ship building industry at Sunnmøre (historically) constitutes an
innovation network. This type is quite similar to what Cooke (1998) calls “grassroots
RIS”.
The innovation networks may be further developed into regional networked
innovation systems. The firms and organisations are still embedded in a specific
region and characterised by localised, interactive learning. However, the systems have
a more planned character through the strengthening of the regional, institutional
infrastructure, i.e. more R&D-institutes, vocational training organisations and other
local organisation are involved in firms’ innovation processes. The networked system
is more or less regarded as the ideal-typical RIS; a regional cluster of firms
surrounded by a local ‘supporting’ institutional infrastructure. Cooke also calls this
type “network RIS”. Historically, the mechanical engineering industry at Jæren
resembled an innovation system where TESA supported technological development
among local firms. However, the area had, and still has, too few relevant R&D
organisations to be denoted a ‘complete’ regional innovation system.
The networked innovation system represents an endogenous development model as an
attempt to increase innovation capacity and collaboration through public policy
instruments. For SMEs, in particular, to carry out more radical innovations there is
often a need to supplement the informal, tacit knowledge with R&D-competence and
more systematically accomplished basic research and development. In the long run
most firms cannot rely only on localised learning, but must also have access to more
universal, codified knowledge of, for example, national innovation systems. The
10
creation of regionalised networked innovation systems through increased cooperation
with local R&D-institutes, or establishment of some technology transfer agencies,
centres for real services etc., may precisely give firms access to information and
competence which may supplement local competence and, thus, increase the
collective innovative capacity and counteract ‘lock-in’ of, in particular, regional
clusters of SMEs.
The third main type of RIS, regionalised national innovation system, is different from
the two preceding in several ways. Firstly, parts of industry and the institutional
infrastructure are more functionally integrated in national or international innovation
systems, i.e. innovation activity to a lager extent takes place in cooperation with
actors outside the region. Thus, this represents more of an exogenous development
model. Cooke (1998) describes this type as “dirigiste RIS”. A typical example may be
regional clusters where the knowledge providers stimulating firms’ innovation
activity mainly are found outside the region, as is exactly the case in the electronics
industry in Horten. Secondly, the collaboration is to a larger extent based on the linear
model, as the cooperation mainly involves specific innovation projects to develop
more radical innovations and with the use of scientific, formal knowledge. Then,
cooperation may be stimulated when people have the same kind of education (e.g. as
engineers) and sharing the same formal knowledge, rather than belonging to the same
local community.
Table 1: Some characteristics of three main types of regional innovation systems
Main type of RIS The location of
knowledge
organisations
Knowledge
flow
Important stimulus
of cooperation
Examples
Territorially
embedded regional
innovation network
Locally, however,
few relevant
knowledge
organisations
Interactive Geographical,
social and cultural
proximity
Sunnmøre
Regional
networked
innovation systems
Locally, a
strengthening of (the
cooperation with)
knowledge
organisations
Interactive Planned, systemic
networking
To some
extent
historically
at Jæren
Regionalised
national innovation
systems
Mainly outside the
region
More linear Individuals with the
same education
and common
experiences
Horten
Based on this conceptualisation of RIS we make two points. First, the
conceptualisation means that RIS may be a theoretical construct fruitful to study
industrial development, as well as the basis for relevant industrial development
strategies, in only a limited number of firms and regions, in particular regional
clusters. It may not be a fruitful analytical framework and policy tools in peripheral
areas and in declining industrial regions dominated by branch plant activities of TNCs
(Asheim and Isaksen 1997, Pike and Tomaney 1999). Many peripheral areas often
have too few firms in the same industrial sector or local production system to
constitute a regional cluster, and then an important condition for local networking and
interactive learning is missing. In the second kind of region it may be difficult in a
short term perspective to bring about the kind of trust and cooperation between a large
11
dominating TNC and local subcontractors necessary to form regional innovative
networks.
Secondly, in the conceptualisation of RIS there is a danger to focus too much on the
regional level, not considering the need in some cases to integrate the strength of the
place-specific and often informal competence with codified, more generally available
(‘ubiquitous’) and R&D-based knowledge. This was exactly one of the main results
from our three empirical investigations.
4. Conclusion
An important conclusion from the three case-studies is, thus, the significance of a
multilevel approach to innovation systems and technology transfer as firms in regional
clusters exploit both place-specific local resources as well as external, world-class
knowledge respectively to strengthen their competitiveness. However, it differs
between the three clusters in how firms came to make use of both global, national and
regional/local resources in innovation processes, and it is the specific situation of each
firm and cluster that define which geographical level will be most important for the
innovation activity, knowledge creation and learning (Maskell et. al. 1998).
The national level has traditionally been of utmost importance for the competitiveness
of the electronics industry in Horten. Historically, the firms have had nearly all their
important contacts in innovation activity to R&D-institutes and customers in other
parts of Norway. Right from the start technology were transferred from Norwegian
research institutes to the new firms, later on joint development of new technology
(mainly new products) with the research institutes and other firms takes place. The
global level has become more important as some firms are bought up by TNCs, form
strategic alliances with foreign firms or collaborate with foreign R&D-institutes. The
local level has become more important through the formation of a specialised local
labour market, externalisation of the system firms and the formation of closer
collaboration between system firms and local subcontractors.
At Jæren and Sunnmøre the local and regional level historically has been decisive for
technological development and competitiveness. Firms have to a certain extent
developed competitive products with local farmers, fishermen and seamen as
demanding customers. In both clusters, local organisations stimulate collaboration and
technology transfer, and they have promoted the formation of shared, local specific
competence of both a tacit and codified nature.
Many firms at Sunnmøre and in particular at Jæren have ‘grown out’ of the district,
when it comes to technological development due to increased globalisation and
growth of corporations. It also reflects a lack of relevant competence in the regional
R&D-system, which hamper technology transfer between local knowledge
organisations and firms. As some firms at Jæren and Sunnmøre are world leaders in
their niches, they have to cooperate with the ‘best’ R&D-milieus, which they find at
the national and international level.
The use of external competence networks in all the three clusters demonstrates the
importance of national innovation systems, the existence of world leading national
research groups and collaboration with global actors, also for innovation processes in
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regional clusters. Firms in the clusters develop new technology as radically new
products with the use of formal, scientific knowledge jointly with actors outside of
the regions. The extensive collaboration with external actors reveals that ideal-typical
regional innovation systems, i.e. regional clusters ‘surrounded’ by supporting local
organisations, are rather uncommon. At least, this is the case in Norway with its
comparatively small regional industrial milieus; large, national R&D-institutes; and
low cultural barriers between these institutes and the industry (even if the barriers
may be high for some (smaller) firms). External contacts are also crucial for many
SMEs. Thus, it may be necessary to modify the comprehension of small firms as very
dependent upon the local industrial milieu in promoting innovation activity.
Although the three clusters do not constitute ideal-typical innovation systems, it is
nevertheless vital to underline that innovation activity is also a regional phenomenon.
Especially at Sunnmøre and Jæren regional resources and collaborative networks have
strong - and in some cases - decisive significance for firms’ innovation activity.
Regional resources include unique combinations of knowledge and skills by the
labour force, the presence of several specialised suppliers, the existence of local
learning processes, technology transfer and spill-over effects supported by
geographical and cultural proximity, as well as by cooperative organisations.
The three case studies also stress the importance of localised knowledge, including
formal knowledge. Formal, scientific knowledge is vital in the kind of product
development carried out in, for example, the electronics industry in Horten. However,
key persons’ experience based knowledge as well as artisan skills supplement the
scientific knowledge. The informal knowledge includes both ‘know-how’ -
knowledge and skills in the specific technologies the firms possess - as well as ‘know-
who’ - information about persons in R&D-institutes and other organisations with
special knowledge. The combination of these different kinds of knowledge is bound
to individuals and cannot be moved without persons also moving. The knowledge is
‘sticky’ as the knowledge is partly embedded in local patterns of interaction, and in
the fact that the local area holds persons with first-hand experience of the knowledge
and on how to put it into use. The best way for firms to acquire this ‘sticky’
knowledge is to be located (through their own firms, suppliers or strategic partners) in
areas where learning processes that develop new and economically useful knowledge
takes place, as ‘when the content of knowledge is changing rapidly it is only those
who take part in its creation who can get access to it’ (Lundall and Borrás 1997: 34).
The place-specific knowledge, and the interactive way in which this knowledge is
acquired, is also an important explanation of the tendencies of successful path
dependency to be observed in several regional clusters, and could be said to represent
important context conditions with respect to the competitiveness of the firms.
Acknowledgement: The paper is based on research financed by the European
Community’s (DG XII) Targeted Socio-Economic Research Programme (Contract
numbers SOE1-CT97-1061 and SOE2-CT98-2047) and the Norwegian Research
Council (Project number 125826/240).
13
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