Do Networks Matter for Innovation? The usefulness of the economic network approach in analysing innovation

Abstract

Economic network theory emphasises the importance of external resource mobilisation. In this paper, the relations between the mobilisation and use of internal and external resources in innovation processes, and the innovative performance of ®rms, are explored empirically, using an adapted version of Ha Êkansson's (1987) economic network model. The main research question was: to what extent do network variables contribute to the innovative performance of ®rms? To answer this question, we assessed the explanatory power of economic network theory within the empirical study of innovation. Firms were found to engage in various con®gurations of internal and external resource bases, enabling them to innovate with better results. The relations in the estimated models are strongly in¯uenced by moderating variables such as sector, and type and level of innovations produced. Our main conclusion is that models that include both internal and external resources explain the innovative performance better than models in which only internal resources are used.

The Effects of National and International Interaction on Innovation: Evidence from the Irish CIS: 2004–06

“…An innovation production function is used to model the effect of different kinds of knowledge sourcing on firms" probability of innovating. It describes the relationship between the propensity of a firm to innovate and a range of explanatory factors (Griliches 1979;Oerlemans et al 1998;Roper 2001;Janz, Lööf and Peters 2003;Love and Mansury 2007). Equation (1) presents the innovation production function to be estimated:…”

“…Whether the firm is indigenous or foreign owned may play a role in explaining innovation performance, which is an issue of particular relevance to Ireland given its reliance on foreign direct investment (Jordan and O"Leary 2008;Roper et al 2008) Similarly, the sector in which a firm operates may impact on its likelihood of innovation (Pavitt 1984;Oerlemans et al 1998). …”

“…The paper uses an innovation production function (Oerlemans, Meeus and Boekema 1998;Freel 2003;Roper, Youtie, Shapira and Fernández-Ribas 2010) augmented to incorporate measures distinguishing between whether a firm has engaged in (i) only national interaction, (ii) only international interaction or (iii) both national and international interaction. This facilitates an empirical test of the importance of "local buzz" (Storper and Venables 2004) and/or "global pipelines" (Bathelt et al 2004) for innovation to be conducted.…”

Localized inter-organizational linkages, agglomeration effects, and the innovative performance of firms

“…This distinction is important since research has shown that different types of innovativeness are influenced by different types of resources (e.g. Oerlemans et al 1998). In this paper newness of innovation is defined by three categories, namely, products that are improved versions of products that were already produced by the firm, products that are new to the firm, and products that are new to the firm's market as a whole.…”

Network-based resources for the innovation process of South African micro-entrepreneurs: A conceptual framework

“…Innovation is a socially-embedded process, where relationships and social activity and exchange are noted to be driving factors of innovative thinking and activity (Oerlemans, Meeus, and Boekena, 1998;Landry, Amar, and Lamari, 2002;Akcomac and ter Weel, 2008). Where the literature argues social capital's positive contribution to innovation as well as its adversarial effects -due to the formation of insular groups that prevent access to new information and diverse communities (Florida, Cushing, and Gates, 2002;Dakhil and De Clercq, 2004), social capital is still noted to mediate the access to information and experiences that affect innovative activity.…”