Knowledge Creation and Innovation in Medium-technology Clusters
New Horizons in Regional Science series
Riccardo Cappellin This chapter aims to increase the understanding of the process of knowledge creation and innovation in medium-technology sectors and to identify characteristics of innovation networks within regional clusters and barriers to their enlargement at the European level. Medium-technology sectors have achieved high success in industrial restructuring and play a key role in European competitiveness as they represent the largest share of European export in manufacturing industry and indicate the highest growth rate in European exports toward global markets. 4.1 THE PROCESS OF INNOVATION AND KNOWLEDGE CREATION Innovation is promoted by factors operating both on the supply side and on the demand side. Among the first are the costs and the quality of labour, the use of new machinery embodying modern technology and the accessibility to qualified suppliers. Among the second are the access to a specific market, the level of demand, the forms of competition and the existence of specific barriers to potential competitors such as intellectual property rights (IPR), which insure a temporary rent. These complementary factors define the opportunities or the challenges in the external environment and they have to be complemented with the individual capabilities internal to the firm (see Figure 4.1). In fact, the viability of a new process or product represents a necessary but not sufficient condition. Innovation also requires the existence of subjective capabilities or immaterial factors. These latter are represented by the capability of the firm and the entrepreneur to elaborate an original long-term project (that is, a ‘business plan’) and...
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