Producer Service Linkages and Industrial Innovation: Results of a Twelve‐Year Tracking Study of New York State Manufacturers

Abstract

This paper documents the results of a twelve-year tracking study of New York State (NYS) manufacturers of scientific instruments (1994-2005). The main goal of the tracking exercise was to probe for firm-level changes in the use of external producer services, notably in technical fields such as industrial design, contract research, and engineering. Another goal was to assess the extent to which these outside inputs have been contributing to the product innovation efforts of users. The results show that innovation and service utilization rates have converged across NYS's three major regions (i.e., Western New York, Upstate/Central, and the New York City metropolitan area). This convergence has been powered by Internet-based technologies, as well as by strategic management change at the company level. The link between recourse to external technical help and successful innovation is found to be statistically stronger in 2005 than it was twelve years ago. Of special importance is the fact that a growing number of manufacturers have been outsourcing research, design, and product development activities at levels that far exceed those reported in the 1990s. The paper concludes with a brief discussion of the implications of these trends for the geography of innovation within high-technology sectors. Copyright 2008 Blackwell Publishing.

Diverse diversities—Open innovation in small towns and rural areas

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“…This line of reasoning is consistent with Puga's (2010) questions concerning the nature of agglomeration economies: whereas static agglomeration externalities (linked to the division of labour, to shared infrastructure and to labour availability) have been well documented empirically, dynamic externalities-and in particular the connection between diversity of larger cities and firm-level learning-have not been observed so unequivocally (Fitjar & Rodríguez-Pose, 2017). Once collaboration or information exchanges are established (which often requires face-to-face-Bathelt, 2011), they can be maintained at a distance (Macpherson, 2008): indeed, external contacts are particularly important in small towns and rural settings because without outside information and knowledge there is danger of lock-in (Boschma, 2005), as smaller groups of people more quickly share their ideas and tend towards homogeneity (Fuijta, 2009). Once collaboration or information exchanges are established (which often requires face-to-face-Bathelt, 2011), they can be maintained at a distance (Macpherson, 2008): indeed, external contacts are particularly important in small towns and rural settings because without outside information and knowledge there is danger of lock-in (Boschma, 2005), as smaller groups of people more quickly share their ideas and tend towards homogeneity (Fuijta, 2009).…”

The increasing service intensity of European manufacturing

“…Using survey data on 50 manufacturing firms in the US, MacPherson and Vanchan (2010) find that the purchase of industrial design services is complementary to in-house core competences. The outsourcing of industrial design services is often related to the acquisition of superior services or totally new services, which is unlikely to reduce in-house services (see also MacPherson, 2008). Francois (1990) also finds that producer services and in-house service functions are complementary based on a theoretical model.…”

Research on the Interaction of China’s Knowledge-Intensive Business Services and Manufacturing Upgrading

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