From toys to automobiles: foreign investment, firm heterogeneity and intermediaries in a Portuguese industry

Abstract

In the literature on territorial innovation systems there is a constant tension between the effect of endogenous and exogenous factors and their relative importance. In order to address this tension several approaches have sought to conceptualize the relational and multi-scalar dimension of innovation and to explain how external knowledge and economic flows in conjunction with regional contexts combine to produce regional growth, stagnation or decline. This paper will contribute to this debate, while also highlighting that even at the local level there is substantial heterogeneity between firms. It will also shed light on the role of intermediary organizations that can help address information and power asymmetries between multinational corporations and less competitive local firms. Empirically it will draw on the case study of the Portuguese moulds industry, which has successfully adapted to shifts in the global economy by drawing on local resources while also remaining integrated into global value chains.

Intra- and inter-firm dynamics in combinatorial knowledge bases

“…Finally, the third conclusion regards the dynamics of inter-firm relationships, which has been the main locus of economic geography research on innovation. There is a growing body of research discussing the heterogeneity and network fragmentation within territorial innovation systems (TIMs) (Giuliani, 2007; Marques, 2017a; Rabellotti and Schmitz, 1999). This heterogeneity is strongly shaped by strategic decisions by key agents, particularly lead firms, identified either by their size or their position at the frontier of technological development (Marques, 2017a).…”

“…There is a growing body of research discussing the heterogeneity and network fragmentation within territorial innovation systems (TIMs) (Giuliani, 2007; Marques, 2017a; Rabellotti and Schmitz, 1999). This heterogeneity is strongly shaped by strategic decisions by key agents, particularly lead firms, identified either by their size or their position at the frontier of technological development (Marques, 2017a). The manner in which these firms govern their value chain relationships, or the decisions regarding how and in what whay they engage with competitors or other organisations (such as knowledge producing organisations), shapes the nature and content of knowledge networks and has a self-reinforcing effect on regional development paths.…”

“…As such, before there can be an effective system, there have to be organisations that are capable of engaging in a manner that is conducive to generating poisitive knowledge externalities. Also, studies of system links and networking do not necessarily capture the power asymmetries that exist between economic agents (Christopherson and Clark, 2007), even in fairly homogeneous contexts (Marques, 2017a). These asymmetries shape the processes that sustain the TIM and its outcomes, thereby influencing innovation dynamic and outputs across space.…”

The Influence of Research and Innovation Strategies for Smart Specialization (RIS3) on University-Industry Collaboration

“…Knowledge spillovers are undoubtedly one of the essential elements of intelligent specialization theory [27]. Thus, RIS3 is the regional economic structure that encourages investments in R&D and innovation, and that should enable it to generate scientific, technological and economic expertise, thereby increasing competitiveness, productivity, and, ultimately, economic growth [67].…”

“…Although the EDP supposedly requires the involvement of a wide range of stakeholders, i.e., representatives from all areas of society (the fourfold helix), instead, in many regions, it is represented by private, public or non-profit sector elites [79]. Additional obstacles include companies' low absorption capacity, limited worker qualifications [67], and/or insufficient university commitment to these policies [80]. This process, which aims to foster internationalizing innovation, thus becomes debilitated or even non-existent.…”