Crossing the valley of death: Network structure, government subsidies and innovation diffusion of industrial clusters

Abstract

To successfully cross the “valley of death” between source innovation and industrialization requires two-way efforts of technological innovation and innovative achievement transformation, which is a socialization process of innovation adoption and diffusion. Industrial clusters are the effective organizational carriers for the diffusion of innovation achievements, therefore, the research aims to explore the transformation mechanism of scientific and technological achievements in industrial clusters, especially considering the influence of network structure and government subsidies in helping industrial clusters to cross the valley of death and improve the efficiency of scientific and technological achievements transformation, so as to put forward targeted transformation countermeasures. Accordingly, a “two-stage and double-driving” innovation diffusion dynamics model was built and applied to the empirical research on China's blockchain industrial cluster by network analysis and system dynamics. It is found that government subsidies play a crucial role in the innovation adoption stage, especially for high innovative industrial clusters. In addition, there is an adoption threshold for the utility of government subsidies, and a reasonable exit mechanism should be established when adoption rates reach a certain proportion. However, for the low innovative industrial clusters, government subsidies continue to be effective. On the contrary, internal factors play a vital role in the stage of innovation diffusion, especially for industrial clusters that have developed close cooperation between upstream and downstream. This study provides the following policy implications for industrial clusters to overcome the valley of death, including carrying out classified guidance and precise implementation, appropriate subsidies and reasonable withdrawal, and improving the cultivation mechanism of “opinion leaders” enterprises.