Abstract
In this conceptual paper, we develop a framework which identifies those elements of firms’ knowledge context which are important for innovation, and the mechanisms through which that knowledge impacts on firms’ innovation performance. We make four main contributions to the existing literature. First, our characterisation of knowledge context provides the basis for a more specific identification of which elements of firms’ knowledge environment are important for innovation, discriminating between spatial, sectoral and network influences. Second, we reflect the role of innovation ambition in shaping firms’ knowledge search strategies. Third, we differentiate between firms’ interactive and non-interactive knowledge search activities and recognise that these may be complemented by unanticipated and serendipitous knowledge spillovers. Finally, we employ the notion of encoding capacity to reflect firms’ internal ability to assimilate and apply external knowledge, and clarify its distinctiveness from the more general concept of absorptive capacity. Our framework provides an integrating mechanism for existing empirical studies, and suggests a number of new research directions related to the determinants of innovation performance and the heterogeneity of innovation outcomes.
Highlights
Contextual influences on innovation have attracted significant recent attention (Carney et al 2011), with strategic implications as firms seek to establish coherence between their organisational strategies and their context, and so maximise the value of their organisational assets and capabilities (Akgun, Keskin, and Byrne 2012; Vaccaro et al 2012)
We develop a framework within which it is possible to identify those elements of firms’ knowledge context which are important for innovation, and the mechanisms through which that knowledge impacts on firms’ innovation performance
Knowledge linked to specific locations, sectors and networks have different characteristics but a consistent theme is that the impact of context on innovation depends on firms’ willingness or ability to take advantage of external knowledge (Wolfe 2009)
Summary
Contextual influences on innovation have attracted significant recent attention (Carney et al 2011), with strategic implications as firms seek to establish coherence between their organisational strategies and their context, and so maximise the value of their organisational assets and capabilities (Akgun, Keskin, and Byrne 2012; Vaccaro et al 2012). Discussion of governments’ ability to create advantage by shaping the framework conditions within which firms operate focuses attention on the contextual influences on innovation (Asheim et al 2007; Todtling, Asheim, and Boschma 2013), and the interplay between these contextual influences and firms’ own internal competencies (Cassiman and Veugelers 2002a; Cassiman and Veugelers 2006) In this conceptual paper, we develop a framework within which it is possible to identify those elements of firms’ knowledge context which are important for innovation, and the mechanisms through which that knowledge impacts on firms’ innovation performance.. Our framework provides an integrating mechanism for empirical studies, and suggests a number of new research directions related to the determinants of innovation performance and the heterogeneity of innovation outcomes
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