Knowledge intensive industrial clustering around Oce: embedding a vertical disintegrating codification process into the Eindhoven-Venlo region

Abstract

This case study provides insight into how a particular transformation of the innovation process affects individual companies and the regional Mechatronics system as a whole in the Eindhoven-Venlo region (The Netherlands). The transformation involves out-sourcing engineering activities by Ocﾎ, one of the major high-tech companies in the region. Ocﾎ wanted to upgrade regional suppliers from 'jobbers' into 'main-suppliers' so that most of the engineering could be done by suppliers while Ocﾎ played the role of system integrator. Local suppliers saw an opportunity to reduce the extent of (production) cost competition by increasing their own innovative competences. Under the Knowledge-intensive Industrial Clustering (KIC) policy programme the collective goal is to build up internal knowledge resources and increase the use of external knowledge resources in the local area. The case study shows that the change in allocation between internal and external knowledge resources is not an easy (costless) change. The restructuring of a codification process requires intensive communicative interaction between heterogeneous knowledge resources and this is favoured by proximity.