Knowledge Diffusion and Innovation

Knowledge Diffusion and Innovation

Modelling Complex Entrepreneurial Behaviours

Piergiuseppe Morone and Richard Taylor

Modern economies are described as ‘knowledge based’. This book investigates the meaning of such a statement, assessing the relevance of knowledge and the channels through which knowledge is exchanged, both from a theoretical and an empirical perspective.

Chapter 7: Validating the Model of Knowledge Diffusion and Innovation

Piergiuseppe Morone and Richard Taylor

Subjects: economics and finance, economics of innovation, evolutionary economics, innovation and technology, economics of innovation


Elaborating on the methodological discussion developed in Chapter 6, we shall now attempt to validate the knowledge diffusion model developed in Chapter 4. Specifically, we will make use of a microvalidation approach, ensuring that the structural conditions and geographical arrangements incorporated into the model capture the salient aspects of the empirical system under investigation. We will do so by means of an indirect calibration to validate model inputs (that is, initial parameterization) against the real world (that is, data collected from case study).1 This calibration exercise should allow an increase in the adherence of the model to a real case study and should provide an example of how validation of an applied model can be conducted. The chapter is structured as follows: first, two applied models on knowledge diffusion are reviewed and the employed validation technique is discussed; then, the case study used to calibrate the agentbased model developed in Chapter 4 is introduced; hence, validation is implemented, results are examined and a set of policy actions to enhance the innovative performance in the system are considered. Finally, some concluding remarks both on the relevance of the validating methodology as well as on the achievements obtained with this validation exercise are presented. A BRIEF REVIEW OF VALIDATING KNOWLEDGE DIFFUSION MODELS In this section we briefly present two applied models of knowledge diffusion which have been validated using two different methodologies. The first model (Morone and Taylor 2004b) here 125 126 Knowledge diffusion and innovation discussed uses calibration as a...

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