Knowledge Diffusion and Innovation
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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.
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Chapter 4: Knowledge Diffusion and Innovation: An Agent-based Approach

Piergiuseppe Morone and Richard Taylor


An agent-based approach In the field of evolutionary economics, agent-based modelling is now recognized as one of the most promising new tools of investigation. As discussed in Chapter 3, an agent-based approach allows researchers to capture dynamics and complexity present in a model. This is exactly what is required for studying processes of innovation and knowledge sharing. The objective is to understand better the relations between micro-processes (the decisions and behaviours of economic actors) and the emergence of stylized facts common across much of industry (relating to innovation and informal relations among firms) in the model output. Recently, there has been a growing amount of research targeting this very area (for example Gilbert et al. 2001; Pajares et al. 2003) using agent-based methodologies. Gilbert et al. (2001) suggest that it has proved difficult to analyse innovation dynamics with the traditional analytical tools and suggest, as an alternative, the need for ‘an abstract simulation model that could constitute a dynamic theory of innovation networks’ (Gilbert et al. 2001). Following this line of reasoning, in this chapter we present an agent-based simulation model which provides an original attempt to establish the complex relation linking knowledge-sharing patterns, firms’ partnering and the innovative capability of firms. However, before presenting the model we will briefly review some of the recent literature on knowledge, innovation and firms’ partnerships. 47 48 Knowledge diffusion and innovation FIRMS’ INTERACTIONS, KNOWLEDGE AND INNOVATION In order to start reasoning about the link between knowledge and innovation we should first understand which...

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