Geography Reference
In-Depth Information
may spur the diversification of the regional knowledge base. Yet, in spite
of a high degree of technological diversity, some 'first order' regional inno-
vation systems, and especially those characterized by the presence of more
mature clusters of activity, which have become more narrowly special-
ized in their technological activities, might experience a slower process of
convergence between old and new technologies because of a lock-in trend
due to both the initial technological profile and the institutional environ-
ment. Other 'first order' regions which have broadened their profiles by
moving into complementary trajectories and achieving institutional inte-
gration, might experience a faster process of convergence between old and
new technologies, thereby reaching a greater potential for 'diversity for
growth' (see Box 5.2 for an empirical example).
To sum up, local technological profiles in the principal regional systems
of innovation are distinctive, and the fact that only some regions are able
to adjust to the highest technological opportunities confirms that the
location-specific nature of technological change implies heterogeneity and
diversity, and eventually the rise and the decline of technological poles
within a country or an area. As a consequence, a 'competitive bidding'
between regional systems of innovation is likely to occur (see also Basile et
al. 2008; 2009). If this is indeed the case, the advantages and disadvantages
of competition and gains in competence may be more or less balanced
out, depending on the capabilities, structures, institutional alignment and
integration of the regional innovation system. In other words, it depends
on the region's overall capacity and speed to react to major technological
changes.
5.6.3
Evolution of MNE Organization
At this point we should consider why it is that different MNEs adopt
different organizational structures and in which cases would particular
organization structures be more appropriate. From the spatial typology
arguments above it is clear that if an MNE wishes to internalize almost
all of its own knowledge and to control the generation and exploitation
of that knowledge very tightly, it is appropriate for the MNE to adopt a
very hierarchical organizational structure such as is depicted in Chapter
3 in Figures 3.1 and 3.23. Where subsidiaries engage with other local cus-
tomers or suppliers, these engagements will be framed within a system of
primarily long-term legal contracts. In other situations, it may be the case
that the parent firm wishes to maintain tight control over certain inter-
national operations relating to particular subsidiaries, while also allow-
ing for more local autonomy and discretion in other subsidiaries which
undertake specific local knowledge-based activities. A resolution to these
