Geography Reference
In-Depth Information
retained by a myriad of heterogeneous agents, and yet characterized by high levels of
indivisibility with important potential benei ts in terms of externalities stemming from its
integration and recombination. Yet knowledge communication is not automatic. On the
contrary, it is the result of much intentional activity designed to create a context condu-
cive to combining variety and complementarity.
Systematic networking is necessary to establish knowledge communication l ows.
The network structure of the system plays a key role in shaping the l ows of knowledge
communication and hence the availability of external knowledge. Specii c, dedicated net-
working activities are necessary in order to manage the l ows of knowledge that are not
internal to each i rm and yet cannot be reduced to arm's length transactions. Networking
activities make knowledge interactions, as distinct from knowledge transactions, possi-
ble. Networking activities are a specii c - indispensable - ingredient of the basic govern-
ance of knowledge (Freeman, 1991).
Firms often rely on networking interactions with other independent parties, to
increase the proprietary control of their knowledge, to acquire external knowledge
and to better exploit it. External knowledge can be acquired by taking advantage of
the spillovers from the academic activities, and from localization in the proximity of
other i rms. Qualii ed user-producer interactions, both upstream, with suppliers, and
downstream, with customers, are the source of key inputs into the production of new
knowledge. Knowledge search and utilization is better implemented within networks of
interactions based on constructed and repeated interactions, qualii ed by contractual
relations. The array of networking tools is ever increasing and includes both formal
and informal mechanisms. Joint ventures, dedicated research clubs, sponsored spin-of s,
patent-thicketing, technological platforms, cross-licensing, and in-house outsourcing are
the main types of formal cooperative tool. Co-localization within technological districts
and membership of epistemic communities are typical forms of networking procedures
(Antonelli, 2008a).
Our basic assumption here is that the levels of knowledge governance costs have a key
role in assessing the actual levels of the total costs for the prospective users of external
knowledge (Arrow, 1969).
The understanding of the costs of external knowledge has important implications
regarding the direction and the amount of technological knowledge being generated by
the i rm. When ei cient markets for knowledge are available, the selection of knowledge
activities that i rms retain within their boundaries is much more ef ective. The search for
the inclusion of knowledge-generating activities and their eventual valorization is in fact
much more selective. The exploration for external sources of knowledge and knowledge
outsourcing becomes common practice. Firms can rely on external providers for specii c
bits of complementary knowledge. Knowledge outsourcing on the demand side matches
the supply of specialized knowledge-intensive business service i rms. Universities and
other public research centers can complement their top-down research activities i nalized
to the production of scientii c knowledge with the provision of elements of technological
knowledge to business i rms.
The stronger are pecuniary knowledge externalities, the stronger the incentives for
i rms to select the characteristics of the technological knowledge they can generate,
according to the characteristics of the context into which they are embedded. A variety
of factors af ect this process: the cognitive distance among agents, the complementarity
