Knowledge Appropriation and the Complexity of Regional Innovation Systems: A Conceptual Precursor to Simulation

This chapter explores contentious perspectives on regional competitive advantage by proposing a conceptual model of the impact of knowledge appropriation activities of firms embedded in a region’s innovation system on that region’s competitive advantage over time. This model provides the precursor to simulation and empirical research that may refine and integrate disparate conceptions of the dynamics of regional advantage. Perspectives of spatial economics and industrial agglomeration that have emerged over decades to explain regional economic growth (Porter, 1980; Krugman, 1994) differ on the relationship between knowledge appropriation and a region’s competitive advantage (Audretsch, 1998). Regional competitive advantage (or competitiveness) is defined here as the innovative performance of a region (Saxenian, 1994; Kenney, 2000). Innovation performance is conceived throughout this study as the value extracted from innovations created and exploited in the market through innovation and production systems in a region.1 This chapter attempts to bring parsimony to these theoretical contrasts on regional advantage by integrating them through knowledge- and complexity-based views of innovation activity in regional inter-organizational systems (Lomi and Larsen, 1996; Uzzi, 1997; Almeida and Kogut, 1999).

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