High technology localization and extra-regional networks

Abstract

Firms in spatial concentrations of advanced-technology activities do not constrain their knowledge inputs to opportunities found within their industrial cluster. Rather, firms seeking extra-regional markets augment their in-house resources by means of material (embodied technology) and knowledge inputs obtained from sources at the extra-regional scale in addition to within the region. Literature is reviewed on the clustering of firms and their network geography, models of open and closed industrial systems, and absorptive capacity. The latter is used to interpret the search for knowledge undertaken by firms, which are discussed in terms of their organizational differences and strategic choices. A sample of manufacturing establishments from the electronics cluster in the Toronto metropolitan region (Canada) shows firms that are export-intensive have significantly stronger international input connections, especially with consultants and alliance partners. Export orientation is associated with higher levels of expenditure on the in-house generation of knowledge, more innovation inputs from external sources, and distinctive network geographies. Differences in network relations occur within and between three organizational groups of firms – foreign affiliates, multi-location and single-location domestic firms. Geographically wide-ranging networks are interpreted in terms of opportunities in extra-regional locations compared with local supplies. Regional innovation policy implications are considered.