chapter  7
16 Pages

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

ByRune Dahl Fitjar, Andrés Rodríguez-Pose

Cooperation and interaction have been at the heart of evolutionary economic geography (MACKINNON et al., 2009). Firms – which are the fundamental object of analysis of this strand of research – adjust and adapt to changing socioeconomic conditions. This can be achieved through two types of mechanisms: either by innovation through in-house research or, as suggested by ASHEIM and GERTLER (2005), as a result of ‘a dynamic interplay between, and transformation of, tacit and codified forms of knowledge as well as a strong interaction of people within organizations and between them’ (p. 294). The internal structure, configuration, procedures and, more importantly for this article, the interaction between firms determine how individual firms evolve. Much of this interaction leading to the formation of partnerships and networks is a consequence of exchanges with sources external to the firm, such as customers, suppliers and competitors, on the one hand, and centres generating knowledge, such as universities, research centres and consultancies, on the other. The importance of internal versus external sources of innovation and the specific influence of diverse knowledge-generating partnerships have been the object of constant scrutiny, especially in determining

how innovation is achieved in manufacturing firms or in specific subsectors within manufacturing. These studies have tended to highlight different sectoral patterns in the importance of different sources of innovation, even within manufacturing industries (PAVITT, 1984). Recent research has also paid attention to services, in particular knowledge-intensive business services and other highly innovative subsectors (e.g. ASLESEN and ISAKSEN, 2007; DOLOREUX and SHEARMUR, 2012). Less attention has been paid to the analysis of how each of these sources affects innovation across a wide range of different sectors and whether the sources of innovation vary widely across industries (CASTELLACCI, 2008). Yet, as MALERBA (2005, p. 380) notes, ‘innovation greatly differs across sectors in terms of characteristics, sources, actors involved, the boundaries of the process, and the organization of innovative activities’. Innovation in firms or sectors with varying production and market conditions and skills structures demands different approaches and different types of knowledge inputs, being the consequence of different forms of interaction across diverse types of industries. If this hypothesis is correct, variation across sectors in terms of the use of different types of partners, as well as in how closely these different types of collaboration are associated with innovation outcomes, can be expected. Hence, the understanding of how

interaction affects firm adaptation and evolution remains somewhat limited.