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Embeddedness and Innovation in Low and Medium Tech

Prof. David Jacobson DCU Ireland and FIT Cyprus and Kevin Heanue Rural Economy Research Centre Ireland. Embeddedness and Innovation in Low and Medium Tech. Question. What are the patterns of “embeddedness”, and their change over time, displayed by innovative LMT firms?. Theoretical Framework.

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Embeddedness and Innovation in Low and Medium Tech

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  1. Prof. David JacobsonDCU Ireland and FIT CyprusandKevin HeanueRural Economy Research CentreIreland Embeddedness and Innovation in Low and Medium Tech

  2. Question • What are the patterns of “embeddedness”, and their change over time, displayed by innovative LMT firms?

  3. Theoretical Framework • Location and Innovation (e.g. Industrial Districts, Regional Systems of Innovation) • But • Evolution of industrial districts; struggle for “sticky places in slippery space” (Markusen, 1996) • Inverted U of embeddedness and innovation? (Uzzi, 1997; Boschma et al, 2002; Boschma, 2005)

  4. Innovation: Uzzi, Neoclassical, Embeddedness • Uzzi (1997), Boschma et al (2002): inverted U • Neoclassical: Social embeddedness detracts from innovation • Embeddedness: Enhances innovation • Source: Boschma (2005)

  5. Dimensions of Innovative Processes • Network relationships • Interactive learning • Knowledge bases

  6. Embeddedness • Inter-firm rather than individual/social • Connections: • With customers and suppliers, other firms, agencies, institutions • Are they local or distant; market or non-market; “shallow” or “stretched”?

  7. Empirical Context • EU FP5 Project on PILOT • All firms innovative, successful, over 50 employees (44 firms studied) • Two sectors in Ireland: • Fabricated Metal Products (NACE 28) and Furniture (NACE 361)

  8. The Four Irish Firms • FURN1 Monaghan, wooden furniture mainly for export • FURN2 Meath, upholstered furniture mainly for local market • FAB1 Mayo, volume producer of high-spec components, mainly for MNCs in Ireland, in telecoms, automotive, medical equipment etc. • FAB2 Cork, stainless steel vessels and turnkey system preparation for process industries, mainly dairy and pharma in Ireland

  9. Results: FURN1

  10. Results: FURN2

  11. Results: FAB1

  12. Results: FAB2

  13. Conclusion • FURN1 & 2 support inverted U, but differently • FAB1 & 2 do not, at least not yet • If FAB2 succeeds in accessing foreign markets it will “stretch” its embeddedness

  14. Inverted U: Embeddedness and Innovation

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