Interactive Learning and Systemic Innovation

Abstract

In this chapter, I aim to investigate the role of interactive learning in promoting firm innovation. By investigating the willingness and capacity of firms to undertake interactive learning in product innovation, this chapter sheds light on the emergence of dynamic externalities of a regional innovation system at the firm level. Based on a survey on innovative electronics firms in the PRD, China, this chapter demonstrates that firms undertaking the highest intensity of interactive learning with the widest scope of business partners, such as foreign customers, domestic customers, parent companies, universities and sales agents, tend to achieve better innovation outcomes. What’s more, the intensive interactive learning firms have a much higher tendency to apply informal Guanxi networks, for example with business partners, relatives and friends, than other firms. Overall, this chapter contributes to the understanding of the form and effect of interactive learning in the Chinese context. Finally, the chapter addresses the possible lock-in issue and points out future research questions on the changing pattern of interactive learning with a maturing institutional framework in transition China.