Abstract
This article addresses how regional level network governance and structure influence the effectiveness of technology policy to improve local firms’ innovativeness in a catching-up context. It examines network alignment through an investigation of network governance (i.e., coordination) and structure. Our contribution to the literature relates to the employment of original metrics that allow the understanding of meaning, features and roles of network ties and, therefore, whether network governance and structure have a consistent influence on firms’ engagement in network and their innovative performance. The empirical evidence is based on a Brazilian laggard region that has been the focus of technology policy to promote industrial and regional development, the Recife software network of innovation (Porto Digital). We find that implementation of a technology policy and formation of networks to improve firm-level innovation and regional catch-up should involve careful consideration of the intended effects: membership of a network may not be a sufficient condition for improving innovation at firm level.
Highlights
In recent decades, networks have been identified as important assets to support the engagement of localities with innovative activities and the knowledge, production and technological frontiers (Okimoto, 1989; Feldman, 1993; Herrigel, 1993; Lazerson, 1993; Ahuja, 2000; Kenney, 2000; Bresnahan et al, 2001)
Network alignment means that heterogeneous networks presenting different elements that pull in similar directions (Von Tunzelmann, 2003, p. 46) have different ability to achieve the goals of the systems in which they are embedded (Von Tunzelmann, 2010, p. 4)
Our study shows that the effect of government technology policy on firm innovation is partial, because network governance and structure exerts a limited influence on the Recife software network of innovators
Summary
Networks have been identified as important assets to support the engagement of localities with innovative activities and the knowledge, production and technological frontiers (Okimoto, 1989; Feldman, 1993; Herrigel, 1993; Lazerson, 1993; Ahuja, 2000; Kenney, 2000; Bresnahan et al, 2001). The study proposes the following research question: In considering government technology policy to promote firm innovation through networks in a laggard region, do regional level network governance and structure influence policy effectiveness? We examine the role of networks in supporting firm level innovation activities in emerging economies through an investigation of structural (i.e., the institutional setting) and relational (i.e., dyadic ties) embeddedness (Jones et al, 1997).
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