The Emerging Global Knowledge Economy

In the previous chapter we looked at the importance of learning for innovation in the context of the innovative milieu. However, it is useful to bear in mind the difference between learning and knowledge: learning is a process, while knowledge is a resource. In this chapter, we place the process of learning in the context of the so-called knowledge-based economy. Continue reading

The Importance of Networking for SMEs

Collective learning becomes a comparative advantage of the innovative milieu, although it is also a barrier to entry into the local market, and may be transformed in the long run into a barrier to exit. However, the innovative milieu needs external contacts or external energies from outside the system, in terms of new technological opportunities, to avoid losing its innovative capability (Camagni, 1991, p. 140;Bramanti and Ratti, 1997, pp. 32-33; Sternberg, 2000, p. 394). The GREMI group assigns these external linkages to innovation networks.10 The process of networking is taking place both at the intra-regional level, in the form of collective learning processes, and through inter-regional (or even global) linkages facilitating the firm’s access to different, though localised, innovation capabilities (Konstadakopulos and Christopoulos, 1997). Therefore, technological dynamism depends on both the local and non-local innovative processes. The central link between them is the learning process: the codes, routines, interaction channels, and different ways to organise ana co-ordinate learning behaviour, which make learning possible (Bramanti and Ratti, 1997). Networking is ‘an effective way of tackling some of the problems that beset small companies purely on account of their size’ (Financial Times, 28 January 1997).  Continue reading

The Exploitation of Collective Learning: An Easy and Inexpensive Way to Innovate

It should be noted that collective learning derives from the aggregate knowledge of individuals, individual firms, and institutions, and is not proprietary. As an externality within the milieu, it is absolutely free. As mentioned earlier, it is up to SMEs to absorb and exploit collective learning. In this respect, the collective learning process is seen to generate radical innovation (such as James Dyson’s) rather than incremental innovation. Continue reading

Re-conceptualising the Role of Learning in Regional Development

There is a growing body of academic research investigating the role of learning in regional development. Storper adopts the concept of learning economy elaborated by the Aalborg group of economists in Denmark (Dalum et al, 1992, pp. 298-317), based on two fundamental processes: technological learning and institutional learning (Storper, 1995, p. 212). Lundvall has captured the importance of this perspective, which emerged from studies of national systems of innovation. According to him, learning is the most important process, while knowledge and information are the most fundamental resources in a modern economy. He argues that ‘learning is also predominantly an interactive and socially embedded process which is better understood by viewing individuals, organisations and whole societies interconnectedly in their institutional and cultural context’ (Lundvall, 1992, p. 1). Continue reading

The Importance of Agglomeration or Cluster Economies

Generally speaking, geographical proximity or regional clustering of SMEs brings few benefits, although it is a necessary pre-condition for their development. Clustering is the tendency of companies in similar lines of business to concentrate geographically. California’s Silicon Valley – the industrial strip between San Francisco and San Jose in northern California – is the most well-known recent example of agglomeration. There are quite a few clusters in Europe that resemble Silicon Valley, from the high-tech agglomeration of Cambridge’s Silicon Fen to low-tech ones, such as northern Italy’s textile and ceramic tile businesses. Continue reading

The Evolutionary Theory of Technological Change

The evolutionary economics pioneered in the mid-1980s by Nelson and Winter, and developed and presented by Dosi and others (Nelson and Winter, 1982; Dosi et al, 1988), has identified aspects of regional economy that underlie innovative agglomerations of both the high- and low-technology variety. The evolutionary school claims that technological change is dependent on a path or trajectory. Interdependent choices are made by actors about changes made over time, which are entirely different from those of orthodox economics. Continue reading

The Concept of the Innovative Milieu

In order to understand the importance of regional innovation in the West of England and the Singapore-Johor cross-border area, it will be necessary to present the latest theoretical concepts found in economic and management disciplines. It should be pointed out that no major new theories on innovation and entrepreneurship have been developed since those of early economists such as Adam Smith, David Ricardo, Alfred Marshall and Joseph Schumpeter. Perhaps Galar’s reminder of the ancient dictum natura horret vacuum – that there are no empty places waiting for new theories to be nested (2000, p. 288) – is appropriate in this context. However, during the last fifteen years, two concepts complementing the theories have emerged.3 These concentrate respectively on the innovative milieu (innovative environment), and on technological change. Continue reading

Innovative Environments and the Importance of Proximity

Most firms in Europe and South-East Asia are well aware of the importance of innovation in achieving commercial success. However, relatively few firms are becoming innovators; most are content to adopt existing innovations. It seems that it is not only difficult to define precisely what innovation is, but also difficult to measure it, as it is not always directly reflected in the profitability of firms. It is more or less accepted that innovation means the creation of a better product or process. Dyson Ltd., based in the West of England, did exactly that when James Dyson and his research team designed a new type of high quality vacuum cleaner. This innovative product has been an outstanding commercial success, with sales of over £3 billion worldwide. Continue reading

The structure of the book

This book is divided into three parts. Part I sets out the theoretical framework for the empirical analysis. Here we consider questions about the significance of the spatial dimension in conducting research, and about the innovative activities of SMEs. In addition, the views that have come to dominate the debate on innovation in the emerging global knowledge-based economy are discussed.  Continue reading

The main research questions

The objective of this book is to develop a knowledge base on the learning and innovative behaviour of clustered SMEs in the South West of England and the Singapore-Johor cross-border area. Specifically, the factors which stimulate or inhibit innovation (inter-firm, regional/local, institutional or structural) are identified. Advancing the understanding of learning behaviour patterns of SMEs is crucial to improving the competitiveness of regional agglomerations around the world. Continue reading