Regions, networks and innovative performance: The case of knowledge-intensive industries in Norway

Abstract

Many recent studies maintain that regional characteristics influence the innovative performances, innovation processes and innovation patterns of firms. Based on a representative sample of knowledge-intensive firms in Norway, this paper analyses the innovation output, innovation partners, knowledge sources, and localization of sources and partners for knowledge-intensive firms in three types of region: large urban regions, small urban regions and rural areas.The empirical results contradict some of the assumptions of the literature dealing with agglomeration economies, regional clusters, and so on. We find, for example, that the firms’ innovation partners and knowledge sources are quite similar irrespective of location. This may indicate that the relevant innovation systems in knowledge-intensive industries in Norway are sectoral and national rather than regional. The paper also finds that the small urban regions and the rural regions have a higher share of innovating, knowledge-intensive firms than the large urban regions, which may partly be explained by a much higher rate of public funding of innovation activity in the first two regional types. However, the large urban regions have higher new firm formation rates and more radically innovating firms than the other two types of region. The paper discusses to what extent the concept of open innovation may contribute to explaining the empirical results, because firms in large urban regions can rely more on open innovation than firms in other regions.