This paper analyses the role of regional context on innovation persistency of firms. Using the Community Innovation Survey in Sweden, we have traced firms’ innovative behaviour from 2002 to 2012, in terms of four Schumpeterian types of innovation: product, process, organizational, and marketing. Controlling for an extensive set of firm‐level characteristics, we find that certain regional characteristics matter for innovation persistency of firms. In particular, those firms located in regions with: (i) thicker labour market or (ii) higher extent of knowledge spillover exhibit higher probability of being persistent innovators up to 14 percentage points. Such higher persistency is mostly pronounced for product innovators.
Tavassoli S. & Karlsson C. (2018) The role of regional context on innovation persistency of firms. Papers in Regional Science, 97(4),: 931-955.
RMIT University, Australia & CIRCLE Lund
The interview transcript
Hi, welcome to Coffee Break with Researchers.
Today, I am having a coffee break with Sam Tavassoli.
He is a senior lecturer at the RMIT University in Australia.
Thank you for accepting my invitation to a coffee break.
How are you doing?I am fine, thank you and thanks for having me today.
Today, I am having a Colombian black coffee, which one are you having?
I am having a black coffee.
Great, we have made the same choice.
I wanted to talk with you about one of your papers investigating how location affects innovation persistency.
Could you please tell me what the main idea of the paper was?
In this paper we looked at how the location of firms, where they are located and certain regional characteristics associated with the location affect the persistency of the innovations of those firms.
I see that the key-definition of your research is innovation persistency.
Could you please define it? Some firms never innovate, some firms innovate occasionally and some firms innovate over and over.
They innovate this year, they innovate next year and so on.
This last group we call “persistent innovator”.
They are a very special and interesting group of innovative firms.
The persistency is about that: doing it over and over.
Which ones were your main findings?
Yes, what we have found is that certain regional factors indeed affect the persistency of innovation of firms.
We found two of those factors. One is the thickness of the labor market and the second one is the extend of knowledge spillover happening in the region.
These two are two regional factors associated with the region that the firm is located in and they matter for persistency of innovation of firms.
I wanted to know what was your personal driver in doing this research?
We had a previous paper two years ago and that one has started out of the curiosity of what is the percentage of firms that innovate persistently, they do it over and over, and why they do that
After finishing that project, I was talking with a regional economist.
He told me.. let’s think about the location of these firms and see if the location also can explain why certain firms never innovate, why certain firms occasionally innovate and more importantly why certain firms innovate all the time.
That was a little talk with a colleague, coming probably from a bit of a different field that I have been trained in, and that was the spark of the idea of this paper.
That sounds fascinating.
Based on that, which recommendations for policy-making would you suggest?
I think the main recommendation goes towards the regional policy-makers because usually policy-makers are very interested in making firms innovative.
This is usually in their policy agenda, in their campaigns and those things.
For them we have a message and the message is: You don’t have to push the firms all the time to be innovative because firms have enough incentive – not all of them but some of them – to, as soon as they innovate for the first time, they keep doing it themselves because success breeds success and by then they have already overcome the fixed cost of innovation so they like to do it over and over.
You don’t have to worry about it. What you need to worry about is to create certain regional factors that can spark the first innovation.
Then the ball will keep rolling. There are several things that can be done but one of them is to create a region that attracts talented people in order to create a thick labor market.
That is indeed very interesting.
Thank you very much.
I wish you all the best for your future research and I hope to see you next time in a coffee break.
Thank you very much.
Same to you too.
Thank you for watching.
If you are interested in more details about this research find here the link for the academic publication.
Bye, bye.Tags: community innovation, Innovation persistency, schumpeterian innovation