Abstract
AbstractThe role of radical innovations for the economy has received increasing attention by German policy‐makers. This paper investigates how (un‐)related variety and external linkages influence these innovations in German labour market regions. Evidence is found that related and unrelated knowledge capabilities both support the emergence of radical innovations, although strong related capabilities are especially important. External linkages have an inverted u‐shape relation to radically new ideas and can act as substitute for missing unrelated competences in a region. The results shed new light on the emergence of radical innovations and thus have interesting scientific and practical implications.
Highlights
IntroductionInnovations have been highlighted as key factor for economic growth (Rosenberg, 2004; Verspagen, 2005)
During the last decades, innovations have been highlighted as key factor for economic growth (Rosenberg, 2004; Verspagen, 2005)
This paper investigates howrelated variety and external linkages influence these innovations in German labour market regions
Summary
Innovations have been highlighted as key factor for economic growth (Rosenberg, 2004; Verspagen, 2005). It has been acknowledged that in particular radical innovations offer great economic potential (Castaldi et al, 2015). Innovations that are radical in nature combine previously unconnected knowledge domains, which is more uncertain and riskier than combining knowledge that has been combined before (Fleming, 2001). That such innovations are successful, they can form completely new markets and industries and provide the basis for long-term economic growth (Ahuja and Lampert, 2001). The possible catalysing role of radical innovations for the economy has received increasing attention by policy makers. The German government just recently established a public agency for the promotion of radical innovations (BMBF, 2018)
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