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Edited by Harald Bathelt, Patrick Cohendet, Sebastian Henn and Laurent Simon

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James R. Faulconbridge

This chapter examines the unique insights provided by the relational approach to knowledge and innovation developed by economic geographers. It shows how the focus in the approach on social interactions and their spatiality, and on a research methodology that generates fine-grained insights into these, opens up a series of important questions about knowledge and innovation. In particular emphasis falls on how in organizations and public policy, rather than managing knowledge and innovation themselves, efforts should be made to manage the interactions that produce knowledge and innovation. The chapter explores these contentions through existing research and considers future directions for analysis.

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Thierry Burger-Helmchen and Caroline Hussler

This chapter provides a comprehensive understanding of the reverse innovation phenomenon, its underlying logics, associated challenges and potential future. We start tackling the peculiarity and scope of reverse innovation, by presenting existing yet confusing literature on the topic. We then refine the concept, thanks to an original analytical grid: if reverse innovation always incorporates a geographical diffusion process, it often also encompasses an evolution in the strategic target of innovation. Two versions of reverse innovation are thus pinpointed, and their respective managerial challenges discussed. In a concluding part, we broaden the perspective and put reverse innovation into the very context of global innovation management (and its evolution), in order to question reverse innovation potential persistency through time.

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Jean-Alain Héraud

The aim of this chapter is to focus on the progressive aspects of the relationship between science and innovation. One of the main aims in this chapter is to position the fields of science and innovation in relationship with the actors of both scenes. Are there individuals, organizations and institutions specialized in the respective fields, with a division of labor leading to professional monopolies? Must we introduce other elements in the creative ecosystems (communities, intermediaries, policy settings, etc.)? One striking evolution in the long run is the professionalization of research, along with the increasing size of equipment in certain sectors. The logical conclusion could be that science is now extremely specialized and characterized by an extensive division of labor. The paradox is that, in parallel, we observe a growing number and variety of partners contributing to applied knowledge creation in the model of open innovation, and large interdisciplinary teams that are necessary to achieve breakthroughs in basic science. Scientist are trained and selected like high-level athletes, exchanged on academic markets, and evaluated according to criteria of “excellence” in the respective discipline, but they can no more be considered as having the monopoly of the discovery. We observe a democratization of the ideas as Edmund Phelps says.

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A second source of innovation: Critical public policy

Promises and Limits of Democratic Participation in Latin America

Leonardo Avritzer

Chapter 2 is an attempt to bridge the critical theory debate with the critical public policy debate. Critical public policy is a second source of institutional innovation that has independent but parallel origins in relation to the critical theory debate. Critical public policy is also a reaction against important assumptions of the Weberian theoretical framework. The critique of the Weberian view on innovation comes from a different theoretical perspective, namely, through a critique of technicians and professionals’ capacity to handle social reality without the input of social actors. Chapter 2 shows the road that connects the Weberian critique of technical knowledge with participatory public policy. It shows that democratic innovation, as defined earlier, is the capacity of the state to process input by the citizenship in different ways or institutional formats. The different designs that deepen democracy are linked to processes of democratization. The chapter outlines three types of democratic innovations in Latin America that will be discussed in Chapters 3, 4 and 5. The first is innovation linked to participatory accountability. The most important cases of innovation in accountability and transparency in Latin America are: policy councils in Brazil, comités de vigilancia in Bolivia and citizen councillors in Mexico. All three cases share the same characteristics, namely, the attempt to create institutions that follow a citizenship logic and are partially disconnected from the electoral system and its cycle of change. The second democratic innovation is ‘co-deliberation interface’. The co-deliberation interface is the most recent but also the most discussed. Participatory budgeting in Brazil and Argentina are the best examples of such mechanisms. The third democratic innovation is administrative/judicial. Administrative innovation can potentially function as an interface between the state and civil society. Unlike the types of innovation defined earlier, administrative innovation is centred on the de-politicization of public administration. There is no problem with administrative innovation but there is a problem when administrative innovation is justified in terms of democratic deepening. I will analyse the Brazilian and the Colombian Supreme Courts in this perspective.

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Johannes Glückler

This chapter aims to overcome the relative silence in the dialogue between technology-oriented innovation studies and service innovation research. Rather than viewing services as just an additional factor of innovation activities, it is argued that its inclusion requires a revised understanding of the concept of innovation itself. This chapter reviews the perspectives of assimilation, differentiation and integration in the interdisciplinary evolution of research on service innovation. It is argued that an integrative approach is best suited to capture the contemporary servitization in manufacturing and the increasing division of knowledge-based labor, leading to convergence between production and services both within and between firms. It is argued that this convergence yields opportunities for regional economies to leverage their innovativeness and competitiveness by both specializing in services and integrating services into the production system.

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Michel Ferrary and Mark Granovetter

The failure of several policy-makers around the world to reproduce the Silicon Valley cluster reveals the misunderstanding of the innovative dynamic in Silicon Valley. This study uses complex network theory to analyse the complex innovative capability of Silicon Valley and to understand the heterogeneity of agents and the multiplexity of ties that support the creation and development of high-tech start-ups. Silicon Valley is a complex network, whose nodes are companies and whose links represent the various economic and financial ties connecting them. In a systemic perspective, the presence of a specific agent in a network induces specific interactions with other agents that could not take place if this agent were not there. Thus, the diversity of agents influences the dynamics of the system. The presence of venture capital firms in an innovative cluster opens potential specific interactions with other agents in the network (universities, large companies, laboratories) that determine a particular dynamic of innovation. What is distinctive about Silicon Valley is its complete and robust complex system of innovation supported by social networks of interdependent economic agents in which the VC firms have a specific function. Our perspective examines five different contributions of VC firms to Silicon Valley: financing, selection, collective learning, embedding and signalling.

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Harald Bathelt

This chapter presents evidence that trade fairs play a substantive role in industrial innovation and knowledge generation processes. First, based on interviews conducted at trade fairs, it is illustrated that most exhibitors systematically use these events to present innovations to visitors and acquire information about new products and technologies. Second, findings from an industry survey confirm that trade fairs are consistently ranked among the important information sources for product and process innovation. While not the only or most important influences, these events provide a unique and crucial platform to present innovations, to acquire information about changes in user needs, to collect information about changes in the market, technology and policy environment, to gather information about competitor innovations, and to search for and find problem solutions.

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Sebastian Henn and Harald Bathelt

This chapter discusses how transnational entrepreneurs contribute to the global transfer of knowledge and initiate regional development processes. Transnational entrepreneurs are conceptualized as one type of diaspora entrepreneur who, unlike other types of entrepreneurs, set up highly competitive firms that rely in their day-to-day business on dense linkages between two or more locations. Being part of families or closed ethnic communities, these entrepreneurs are capable of developing trust-based networks that allow for fast and low-cost knowledge exchanges and knowledge generation processes at a worldwide scale. This generates important competitive advantages compared to firms that do not have such linkages. By presenting case studies of self-employed migrants in high-technology industries (so-called New Argonauts) and in the diamond sector, this chapter demonstrates that transnational entrepreneurs are an important phenomenon in different countries and industries with varying knowledge intensities, and can be analyzed at different scales.

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The Two Faces of Institutional Innovation

Promises and Limits of Democratic Participation in Latin America

Leonardo Avritzer

This book evaluates democratic innovations to allow a full analysis of the different practices that have emerged recently in Latin America. These innovations, often viewed in a positive light by a large section of democratic theorists, engendered the idea that all innovations are democratic and all democratic innovations are able to foster citizenship – a view challenged by this work. The book also evaluates the expansion of innovation to the field of judicial institutions. It will benefit democratic theorists by presenting a realistic analysis of the positive and negative aspects of democratic innovation.