Innovation and Networking in Peripheral Areas—a Case Study of Emergence and Change in Rural Manufacturing

Abstract

This paper examines the features of successful forms of innovation in rural areas characterized by geographical distance and sparse population. The core questions are: how firms compensate for the lack of a dense local network; how rural clusters are emerging and changing; how firms acquire knowledge for innovation processes; how firms face the challenges of globalization, notably at the level of value chains. The topics will be examined through an analysis of the development of one agricultural area in northern Finland which has industrialized since the mid-1990s in the wake of the growth of the national information and communication technology (ICT) cluster. The findings reveal that the knowledge needed for innovation in small and medium-sized enterprises (SMEs) stems from regional sources-clients of localized networks as well as regional educational and knowledge institutes-whereas the leading firms of the regional networks acquire knowledge from clients, non-local knowledge institutes and national technology programmes.

Re-thinking non-core regions: planning strategies and practices beyond growth

“…The more recent literature on knowledge and innovation (Bathelt & Glückler, 2011), on different types of knowledge transfer (Boschma, 2005) as well as on critical network theory perspectives (Glückler, 2013) opens up perspectives on non-core regions as places of innovation. The inclusion in global networks of information flows and production chains as well as the various ways to generate innovations are completely under-researched when it comes to entrepreneurial activities in peripheral regions (as exceptions: Huggins & Johnston, 2009;Lagendijk & Lorentzen, 2007;Virkkala, 2006), but these aspects bear the potential to challenge dominant perceptions of the relation between the economy and space. This is all the more important since innovation can contribute to both an increased regional polarization and a balance between core and peripheral regions.…”

“…As a result of the prevalent dichotomies, 'non-core regions' are typically juxtaposed to 'core regions' and associated with negative connotations such as unfavourable economic conditions (Copus et al, 2008;Labrianidis, 2006;Virkkala, 2006), inflexible social network architectures (Terluin, 2003) and insufficiencies in infrastructures and accessibility due to remoteness (Organisation for Economic Co-operation and Development [OECD], 2010;Combes & Overman, 2004;Vickerman, Spiekermann, & Wegener, 1999). This predominantly negative image of non-core regions is also reflected in the mainstream planning approaches (Danson, 2009;Lagendijk, 1999;Tödtling & Trippl, 2005).…”

Small Businesses Need Strong Mediators: Mitigating the Disadvantages of Peripheral Localization Through Alliance Formation

“…Leading industries are often located in areas where large concentrations of businesses operate in close proximity to each other, thus demonstrating the propensity of firms in clusters to perform better than the average, solitary firm. 136 Within the literature on firm performance and development in relation to geography, few studies have focused on issues related to firms operating outside core industrial regions (Anderson, 2000;Virkkala, 2007). What about firms operating outside industry clusters?…”

Innovation and the Development Nexus: Prospects From Rural Enterprises in South Africa

“…In South Africa, commercial agriculture is shedding its workforce and is declining as a major employer (Aliber, Baiphethi and Jacobs 2009), often as a result of adopting labour reducing innovations. Internationally, the trend in rural employment is shifting towards increased and stable skilled and semi-skilled employment in the growing public sector services of health, education and local government (NESTA 2007;Virkkala 2007). In South Africa, observations indicate that smallscale manufacturing, service and retail enterprises are becoming commonplace.…”