Intra‐cluster Knowledge Exchange and Frequency of Product Innovation in a Digital Cluster

Abstract

We investigate how intra-cluster knowledge exchange affects the frequency of product innovation. Based on self-administered survey data of digital SMEs from the Bournemouth and Poole regions of England, this study shows that digital firms that sustain both temporary and prolonged relationships with outbound employees have a higher probability of introducing frequent product innovation. Moreover, while cognitive proximity and the use of external knowledge providers increase the probability of frequent product innovation, geographical proximity reduces it. Our findings suggest that managers of young digital firms with limited resources in peripheral regions should 'act near' before reaching out.

“The person with maximum knowledge will win the race”: Conceptualizing knowledge in microbusinesses

“…Finally, our findings may inspire practitioners to think and act strategically to facilitate knowledge sharing among their workforce and to explore external knowledge sources to become and remain competitive (Taura & Radicic, 2019).…”

“…Once acquired externally or internally, knowledge has to be disseminated to individuals and groups within/across firms because tacit knowledge in the hands of individuals is the raw material that has to be "processed to a higher level of knowledge in order to create added value" (Nurmi, 1998, p. 31). Moreover, it is the shared knowledge between an organization and its members that enhances existing knowledge repositories and stimulates new ideas (Taura & Radicic, 2019;Zhou & Li, 2012). Furthermore, it is the shared knowledge that leads to human capacity development and affects firm-level efficiencies such as reducing production costs, faster completion of activities, improved team performance, increased innovation, and sales growth (Pérez-Luño et al, 2016).…”

“…According to Schierjott et al (2018), employees tend to rely on their relationships with peers to accumulate knowledge. Others argue that trust in interpersonal relationships (Chen et al, 2014;Khoza & Pretorius, 2017;Lu et al, 2006) facilitates knowledge sharing (Taura & Radicic, 2019) and motivators to share knowledge (Holste & Fields, 2010). Nonaka et al (2000, p. 28) note the importance of "strong love, caring and trust amongst organisational members."…”

“…The obverse includes interpersonal conflict, lack of incentives, and a poor culture of learning that discourages knowledge sharing (Buckley, 2012;Cook & Cook, 2004). This is exacerbated by fear of losing power (Amis et al, 2018;Hsu & Chang, 2014;Taura & Radicic, 2019) and of being punished (Ipe, 2003), and lack of expected rewards.…”

“…Extant scholarship privileges knowledge as one of an organization's most important strategic resources (Altinay et al, 2014;Bojica et al, 2017;Ipe, 2003). Scholars from multiple domains, including business and management (Barney et al, 2011;Maritan & Peteraf, 2011;Nyberg et al, 2014), strategy (Hatch & Dyer, 2004), strategic human resource management (Delery & Roumpi, 2017;Wright et al, 1994), psychology (Crook et al, 2011), economics (Becker, 1996;Blaug, 1976;Machlup, 2014), and small business management (Amoako et al, 2020;Liu & Yang, 2019;Pérez-Luño et al, 2016;Taura & Radicic, 2019), agree that knowledge is vital for organizational sustainability and competitive advantage. Nonaka and Takeuchi (1995, p. 58) define knowledge as "a dynamic human process of justifying personal belief toward the truth."…”