Abstract
The ability to generate innovations and capture the rents from innovation are important for firms’ competitive advantage. Increasingly firms seek knowledge abundant locations, or industry clusters, to access novel knowledge and generate innovations through knowledge recombinations (Schumpeter, 1934). We examine how different types of clusters impact on the innovation output, the knowledge flows among the clustered firms and, ultimately, on who captures the rents from innovation. The type of cluster reflects the configuration of firms and the interactions among firms, individuals and agencies in the cluster and is likely to be a major driver of both the innovative output and of which firms will be more likely to capture the rents from innovation. Extant research has noted that the social and business networks binding firms in clusters are excellent vehicles for the flow of knowledge that eases innovations, but different types of clusters may lead to different outcomes.
Highlights
Contemporary research has been placing knowledge as the core source of firms’ competitive advantage and competition among firms as relying increasingly on knowledge and innovation (Grant, 1996; McGrath, et al, 1996; Teece, 1998, 2000; Argote and Ingram, 2000; Tallman, et al, 2004; Maehler, et al, 2011)
One stream of research that has continuously developed over the past fifty years has dealt with industry clusters, or agglomerations, as locations of excellence to absorb novel knowledge (Pinch, et al, 2003; Tallman et al, 2004; Saraceni and Andrade Júnior, 2012).This line of research may probably be traced back to Marshall’s (1920) work and had grown into a substantial number of scholars questioning why and in which conditions similar firms, or firms operating in the same industry co-locate
In specific we focus on how the different types of clusters – for which we use the typology advanced by Markusen (1996) - influence the rate and type of innovations and which firms will be more likely to capture the rents from innovation
Summary
Contemporary research has been placing knowledge as the core source of firms’ competitive advantage and competition among firms as relying increasingly on knowledge and innovation (Grant, 1996; McGrath, et al, 1996; Teece, 1998, 2000; Argote and Ingram, 2000; Tallman, et al, 2004; Maehler, et al, 2011). To generate more innovations and absorb knowledge not yet held, firms seem to increasingly seek to locate in knowledge rich regions (Saxenian, 1994; Pinch, et al, 2003), such as many industry clusters around the world. Extant research has mainly focused on the issue of appropriation of rents by emphasizing the speed of imitation by rivals (as per Schumpeter, 1950; Teece, 1998, 2000; Gould, 2012; Ferreira, Serra and Maccari, 2012) In this view, firms’ failure to capture rents from their innovations would be a function of both the ease of replication and the efficacy of protection mechanisms as barriers to imitation. The configuration of the cluster itself may matter in this equation
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