Chapter 8: The influence of cross-border knowledge interaction on the relation between key subsystems of the RIS and innovation performance of Dutch SMEs
It is now widely recognized, in turbulent market economies, that innovation is the source of existence for firms, regardless of their size or other attributes. The prerequisite of every innovation is either the generation of new knowledge or, alternatively, and more typically, the combination of existing pieces of knowledge in novel, entrepreneurial ways (Schumpeter, 1934; Drucker, 1985). Innovations are to an increasing extent also seen as the result of an interactive process of knowledge generation, diffusion and application. This specifically applies to small and medium-sized enterprises (SMEs) that, due to their lack of financial and human capital resources, often do not have direct access to R & D. What is often neglected in the literature is to what extent different kinds of innovation rely on specific knowledge sources and links. This possibility has been recognized only fairly recently (Tödtling et al., 2009; Freel and de Jong, 2009). In particular for SMEs, tacit knowledge and trust based relationships are considered essential for successfully carrying out innovation activities (Howells, 2002; Gertler, 2003). The exchange of tacit knowledge presupposes trust and personal contacts which are, according to the literature on regional innovation systems (RIS), essentially facilitated by spatial proximity (Storper, 1997; Morgan, 2004). In the past decade, the systems of innovation approach has substantially enhanced our knowledge about the nature of the innovation process.
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