Location, Technology and Innovation
Orthodox economic approaches largely consider both the multinational firm and the region or local system as black boxes whose characteristics, behaviour and innovative features are determined by exogenous factors. Conversely, endogenous perspectives, such as those in the management literature, tend to explain structure and growth mechanisms primarily as the result of forces which are purely internal to the firm. Hence, neither of these approaches is per se appropriate for investigating the links between the external and internal sources of innovation, and the issue ‘global versus local’ in the creation of new knowledge. Rather, the structure, features, behaviour and evolution of both the MNE and geographical space need to be considered within the context of their increasing interdependencies and in the light of their interactions between a variety of different knowledge transfer mechanisms. In the words of Dicken, ‘global’ and ‘local’ are not fixed scales; rather, they represent the extreme points of a dialectical continuum of complex mutual interactions’ (Dicken 1994: 103). This chapter is devoted to integrating the micro-level of the firm – focusing in particular on MNEs’ technological capabilities and strategies – and the meso-level of the regional system or industrial cluster, in order to explore the new combinations of internal and external sources of innovation in the modern age of globalization.
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