The Economics of Knowledge Generation and Distribution

Pier Paolo Patrucco, Pier Paolo Patrucco

• Éditeur: Routledge
• Année: 2014
• ISBN:
  9781136755279
• Édition: 1
• Sujet: Commerce
• Sous-sujet: Commerce Général

Contemporary capitalistic systems have been undergoing profound transformations determined by the transition towards the so-called knowledge based economy, i.e. a competitive system based on the capabilities firms have to create, use and circulate knowledge. These transformations concern both the characteristics of productive and innovative processes, and the resources used in these activities. This book captures these changes, where traditional R&D investments undertaken internally by firms are increasingly and strategically complemented by external sources of innovation and new knowledge.

Collaborations between firms, and between firms and other organizations, as well as the mobility of human capital, are strategic processes in order to share and circulate knowledge and competencies. They are also key determinants in the creation of new knowledge and innovation, and ultimately in growth dynamics. The circulation and distribution of knowledge is now a key input in the production of knowledge. Knowledge and innovation are understood as the result of collective and interactive processes at the system level, and less at the micro level. In other words, new knowledge production is less and less the result of individualistic behaviours of the firms and much more the effect of explicit and pro-active interactions and transactions put in place by local networks of innovators. In this perspective, economic space is much more defined by the quality of the interactions among actors rather than by their mere technological, sectoral or geographical proximity.

This book brings together new conceptual and empirical contributions and blends the analysis of the technological and geographical spaces in which innovation and knowledge are produced.

Part I

Introduction and conceptual framework

1 The systemic dynamics of knowledge, innovation and growth

An introduction

Pier Paolo Patrucco

1.1 Introduction

Economics of innovation is progressively paying a special attention to the systemic conditions under which knowledge is generated and distributed, appreciating the complex and specific characteristics, determinants and effects that underpin the innovative process.

Knowledge is now understood as the result of a variety of processes that take place in well-defined technological, geographical and institutional spaces and that are affected by specific technological, geographical and organisational factors. The creation of a new portion of knowledge does not come like manna from heaven, but is the endogenous result of proactive behaviours, purposive efforts and prospective investments put in place by economic actors in a given environment. In order to innovate, economic actors have to face specific constraints represented by their own productive and organisational characteristics, by the features of the economic system in which they play and by the specific dynamics that characterise the relation between firms and their environment. Hence, the transmission of knowledge and the application and development of a given portion of knowledge into a new product, process, technology or organisational form do not take place in vacuum and do not follow a linear process (Atkinson and Stiglitz, 1969; David, 1975; Rosenberg, 1976, 1982).

In other words, economics of innovation represents the analytical effort to mingle the understanding of homo economicus with that of homo creativus. In the evocative words of Joel Mokyr:

Economists and historians alike realize that there is a deep difference between homo economicus and homo creativus. One makes the most of what nature permits him to have. The other rebels against nature’s dictates. Technological creativity, like all creativity, is an act of rebellion. Without it, we would all still live nasty and short lives of toil, drudgery, and discomfort.

(Mokyr, 1990, viii)

Economic ingenuity and creativity thus can be defined as the ability to make the best use of individual and system resources in order to cope and react to the boundaries imposed by the specific productive and organisational structure of the firm, and by the technological, geographical and institutional conditions that characterise the environment in which the firm plays and with which firms interplay. Hence, boundaries and constraints are represented by both micro and systemic elements. Moreover, boundaries and constraints can be both static (i.e., the structural characteristics of the firm and the environment) and dynamic (i.e., the way in which the firm and the environment interplay and can change their characteristics through time).

The distribution and application of knowledge do not take place without frictions and it is characterised by discontinuities, feedbacks, bottlenecks and leaps, according to (i) the technological capabilities of each actor; (ii) the structure of knowledge interactions and transactions within the system; (iii) the consequent levels knowledge endowment of the environment; and (iv) the feedback between agents behaviour and the structure of knowledge interactions and transactions (Metcalfe, 1997; Antonelli 2003 and 2008; Lane et al., 2009; Ahrweiler, 2010).

In this context, the blending of the analysis of the technological and geographical spaces in which innovation and technological knowledge are generated and diffused has been progressively emerging in the last decades as a rich and fruitful field of research in the economics of innovation, in that it can contribute to a comprehensive understanding of the characteristics, determinants and effects of the introduction and distribution of new knowledge and innovations.

The analysis of the spatial and systemic dimension that characterise the creation and circulation of knowledge is a fruitful field of research because it allows the appreciation of the important indivisibilities and spillovers that affect knowledge as an economic good. At the same time, it gives evidence to the implications of indivisibilities and spillovers for the innovative strategy of the firm, highlighting the role of complementarity and interdependence, which derive from the division of knowledge within systems, and consequently the importance of collaboration and interactions. Major feedbacks are at play between the different actors and the different phases involved in the innovative process, and purposive interactions and collaborations among organisations are crucial strategies in order to take advantage from knowledge externalities and complementarities.

This book brings together the analysis of the technological and geographical spaces in which innovation and knowledge are generated and distributed, aiming at understanding the systemic conditions that both constrain and trigger knowledge generation and distribution. Grafting insights from complexity science into the body of economics of innovation, such an approach focuses on the importance of interactions between organisations, and between these and the environment broadly defined as one of the key factors improving the pace of both knowledge production and diffusion.

Knowledge interactions are seen as crucial components – next to knowledge transactions – of the governance modes of the creation and diffusion of knowledge (Antonelli, 2011). Knowledge interactions are emerging in the broad literature in innovation studies as crucial factors in supporting the effective exploitation of interdependencies, complementarities, knowledge spillovers and feedbacks that characterise learning and the accumulation, creation and diffusion of knowledge. Hence, knowledge interactions are also understood as the main process that underpins the emergence of innovation systems because they support the coordination of the division of knowledge and innovative labour.

In this respect, the analysis of knowledge as a collective good paves the way to the contributions of the book. The generation of technological knowledge can be described as the result of a collective undertaking strongly influenced by the conditions under which actors can access, use and integrate two basic inputs, i.e. internal knowledge and knowledge sourced externally by other firms and organisations (Allen, 1983; Cowan and Jonard, 2003). The intentional participation of firms in organised interactions and informal networks makes possible the acquisition of knowledge sourced externally in other organisations (e.g., clients, suppliers, rivals) and institutions (e.g., universities, R&D labs, Technology Transfer Offices (TTOs)). Internal and external knowledge are strongly complementary rather than substitute and neither of the two inputs can fall without a minimum level without harming the entire process of knowledge creation (Patrucco, 2008).

The framework provided in this book highlights, therefore, that no single firm is able to command the whole sum of technological, organisational and market capabilities necessary to introduce successful innovations. The production of new knowledge and its application to a new artefact requires instead the access to knowledge sourced externally (i.e., by other firms, R&D centres, universities, clients and customers). Recent contributions in the economics of innovation highlight that innovation is a cooperative process, and that typical R&D investments undertaken internally by firms need to be complemented by external sources of innovation and new knowledge.

Three elements need to be stressed here. First, the plurality of economic organi­sations at play is crucial when investigating the conditions and determinants of innovation and technological knowledge. Moreover, the system of interdependencies between that variety of organisations throws a new light on the role of interactions and communication as crucial mechanisms to access and accumulate external and complementary portion of knowledge. Finally, accumulation of technological knowledge is not the result of fluid and spontaneous flows of knowledge that spill freely without structural or dynamic constraints. Instead, accumulation of technological knowledge is affected by the costs of accessing and learning portions of knowledge that are dispersed among the different knowledge producers, and specific to each of these (Cohen and Levinthal, 1990; Pisano, 1996; Patrucco, 2009).

Technological knowledge and innovation can be analysed as the result of a systemic production process where diverse and yet complementary knowledge producers and knowledge production processes are interdependent. Questioning the traditional Arrovian approach to technological knowledge as a public good, technological knowledge can be understood as a collective good where the active and intentional participation of agents in its generation, as much as the access to existing knowledge, are seen as major inputs in the generation of new technological knowledge.

Moreover, it is most important to stress the fact that collective knowledge is different from definitions of knowledge as a quasi-public or quasi-private good. Influential endogenous growth theory models (e.g., Romer, 1986, 1990; Aghion and Howitt, 1998; Jones, 2002) supported the existence of Marshall–Arrow–Romer (MAR) externalities, with knowledge externalities benefiting firms within the same industry. More importantly, these models claimed knowledge is a quasi-public good, but as a matter of fact characterised it as information. Therefore, within well-defined geographical and technological spaces, knowledge and ideas are inputs that spill free across firms. The accumulation of labour, capital and R&D is the unique requirement for knowledge spillovers and learning from external sources to take place. Knowledge spillovers exert positive and unconditional effects on output and productivity growth. Firms co-located in the geographical and technological space are able to take advantage from knowledge spillovers without occurring in any learning costs.

Instead, knowledge is collective not merely because it is indivisible, as in the case of quasi-public or quasi-private knowledge, and consequently gives place to interdependencies and spillovers. Knowledge is collective in that it presumes and requires the effective involvement and cooperation of a variety of agents, where cooperation is built upon communication and the mutual and proactive exchange of competencies, know-how and information. It necessarily requires the active, dynamic and prospective participation of different and complementary actors in order to take advantage from the interdependencies and spillovers that stem from indivisibilities in knowledge production. Increasing returns in the generation of knowledge are possible only if and when firms are able to exploit complementarities between knowledge sourced internally and knowledge sourced externally. The issue of the coordination and governance of the division of knowledge plays a major role here in helping the understanding of the conditions under which different and yet complementary portions of existing knowledge can be distributed and recombined into a new and collective one. Knowledge interactions, defined by the numbers and quality of connections between players in the system, are crucial to the exchange and integration of complementary capabilities and therefore are seen as a specific mode of coordination of the division of knowledge (Patrucco, 2008).

In this context, the innovation system approach has long contributed the understanding of the collective nature of knowledge. Studies on national systems of innovation emphasise the importance of institutional complementarities and variety in the production of new knowledge, especially in terms of the national endowment of scientific and technological infrastructures (namely, university and R&D institutions) conditioning the generation and application of knowledge (Freeman, 1987, 1991; Lundvall, 1992, 2007; Nelson, 1993; Edquist, 1997; Pavitt, 1999).

Moreover, collective knowledge emerges also from technological interrelatedness that can be captured at the sectoral level. Innovation systems are the result of compl...

Table des matières

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• List of figures
• List of tables
• Notes on contributors
• Acknowledgements
• Part I Introduction and conceptual framework
• Part II Applications: interactions and skills
• Part III Applications: knowledge and growth
• Part IV Policy implications and conclusions
• Index