Far from the Madding Crowd: Slow Innovators, Information Value, and the Geography of Innovation

Abstract

The open innovation paradigm has become central for understanding firm-level innovation, and is being refined and questioned as researchers explore its limits. However, it has been rather uncritically adopted by many economic geographers since it provides backing for a variety of theories and observations that point towards innovation occurring in geographically concentrated clusters and cities and towards the role that proximity plays. Evidence that innovation can and does occur outside of clusters and cities, whilst widespread, has not displaced the prevailing idea that innovation and geographic concentration are intimately linked. In this paper, I first go over these arguments, focussing on the reasons why innovation is thought to be associated with cities and clusters. I then propose a framework that accounts for the clustering of innovative firms, for the role of cities, and for the fact that empirical work consistently shows that firms introduce first-to-market innovations in a wide variety of geographic contexts, including isolated and peripheral ones. The framework (re)introduces time and place as key factors, which determine not the diffusion, but the value to innovators, of different types of information.

Diverse diversities—Open innovation in small towns and rural areas

“…They tend to focus more on internal resources and technical knowledge (Shearmur & Doloreux, 2016), they compensate for lack of local partners by relying more on social networks (Grillitsch & Nilsson, 2015), and their information and partner searches are strategic, relying on targeted contacts with wellresearched interlocutors rather than on serendipity (Fitjar & Rodríguez-Pose, 2017). Furthermore, some know-how and knowledge is geographically specific-thus, certain problems cannot be understood in abstraction from particular local contexts, and innovative solutions to these problems emerge where the problems occur, be it cities or remote areas (Phelps, 2012;Shearmur, 2015). None of these processes are closed-all innovators rely to some extent on information external to the firm, and all researchers confirm that, up to a point, a variety of different knowledge inputs is essential.…”

“…The assertions of Florida et al (2017), Jacobs (1969) and others, whilst applicable to certain environments, cannot be generalized. At least three overlapping processes are suggested: firms in more peripheral 1 environments compensate by networking beyond the region (Grillitsch & Nilsson, 2015;Phelps, 2012); firms in peripheral environments are more introspective and rely more on slow-decay technical information (Shearmur & Doloreux, 2016); firms in peripheral regions identify problems that are specific to the region and draw upon local knowledge and culture to find innovative solutions (Bain, 2013;Cooke, 2011;Petrov, 2011;Shearmur, 2015). This research has begun to explore how open innovation-of which it accepts the premise-can occur in environments which are not dense or urban, and which benefit from little local diversity, related or unrelated.…”

Innovation in the periphery: Compensation and exploitation strategies

“…Over the past few years, an emerging body of literature has begun to challenge this geographic bias by analysing innovation processes in peripheral regions on different scales (for a recent review see Eder, ; Isaksen & Karlsen, ; Shearmur, ). There is a growing awareness that firms in a peripheral setting also innovate, albeit that their innovation processes are diverse and differ from those of their urban counterparts (Isaksen, ; Rodríguez‐Pose & Wilkie, ; Shearmur, ). As peripheries are said to offer only a few assets that innovators can deploy, an efficient internal organisation (Grillitsch & Nilsson, ; Isaksen & Karlsen, ) and strategic efforts towards innovation by individual firms (Copus, Skuras, & Tsegenidi, ; McAdam, McConvery, & Armstrong, ; North & Smallbone, ) are found to be of vital importance.…”

Innovation strategies, innovator types and openness: a study of KIBS firms in Spain

“…The study reveals that establishments that have recourse to external innovation partners tend to also be more open in terms of information acquisition. However, the study also shows that innovation can occur in relative isolation, and therefore not all firms adhere to the open innovation paradigm (Shearmur 2015). These findings also show that innovation strategies do not lead in any mechanical way to a higher (or lower) degree of openness.…”