Location, Technology and Innovation
Chapter 4: The sources of innovation: the firm and the local system
Over recent years, the interrelationships between innovation, technology and industrial location behaviour have come to be seen as essential features of regional development. Technical progress has been a key element of the major transformations brought about by globalization. In the case of the MNE, these consist of increasing cross-border interdependence and the integration of all kinds of operations and functions, including those aimed at creating new knowledge and technology. On the other hand, the importance of contextual factors and systemic interactions in the process of the generation and diffusion of innovation has also been recognized in the literature as a key determinant of the technological and economic performance of firms, countries and regions. The significance of the geographical dimension of innovation systems has naturally emerged as the logical consequence of the emphasis put on the relations with sources of knowledge and innovation external to the firm. The multiple linkages which exist between internal and external knowledge sources and conditions will be discussed here by following a micro to meso logic. Thus, in this chapter we will start from the firm as the main actor at the centre of the analysis of innovation processes; then we will move on to the industrial and geographical system, eventually integrating the two levels of analysis with particular reference to the technological creation and accumulation processes of MNEs.
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