Innovation, Space, and Diversity
Doctoral thesis
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http://hdl.handle.net/11250/2428080Utgivelsesdato
2017-01-20Metadata
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Innovation, Space, and Diversity by Marte Cecilie Wilhelmsen Solheim, Stavanger : University of Stavanger, 2017 (PhD thesis UiS, no. 327)Sammendrag
Background
This PhD thesis aims at combining different perspectives from the literature on
organizational theory, innovation, and economic geography and addresses how
firms1 communicate and connect within the contexts of innovation processes.
The literature concerned with organizational theory has had a tendency to
overlook the significance of external surroundings and rather overemphasize
within-firm relations and capabilities2. On the other hand, the literature on
economic geography sometimes fails to consider that firms are heterogeneous
leading to studying firms in a static manner.
The thesis aims at contributing to the existing body of literature that connects
these approaches by looking at how firms organize their innovation activities
in relation to their contexts and how firms create external knowledge linkages.
This in turn reflects firms’ internal competences, as firms’ internal capabilities
guides firms’ ability to find new knowledge, connect to partners and innovate,
hence their absorptive capacity (Cohen and Levinthal 1990, 67).
At the same time, the external environment influences firms’ internal
competence. The underlying mechanism is that people are inseparable from
their environments because “environments only exist through the people
behaving in them knowing them” (Schneider 1987, 439). One premise is thus
that innovation is an interactive process where people with different
competence meet in order to solve problems (Østergaard, Timmermans, and
Kristinsson 2011, Bathelt, Malmberg, and Maskell 2004, Lundvall 1992).
There is a need for increased understanding of how these interactive processes
are organized, which actors are involved, and how these activities play out in
space, gaining such understanding by both considering firms’ internal and
external knowledge and competence. One example is that having diverse
human resources could lead to reaching an equally diverse marketplace (Cox
2001) and access to broader knowledge, which in turn is important for
innovation (Laursen and Salter 2006).
This PhD aims at gaining insight on the interdependencies of firms and external
knowledge linkages in innovation, particularly focusing on the role of diversity.
The overall research question is: how does diversity and space affect
innovation?
Research Design: Data and Methods
The four individual papers take advantage of different data and methods. Paper
I and III draws on large and unique datasets that consist of public enterprise
registers gathered on an annual basis covering all employer firms and all
workers in private sectors in Norway. These data are often referred to as Linked
Employer – Employee Data (LEED). The LEED are then merged with an
extended version of the Community Innovation Survey (CIS). Paper II builds
on the survey data from approximately 500 firms in Norway with more than ten
employees, covering all sectors and regions. Paper IV takes advantage of a
panel data set consisting of 1500 firms in the Norwegian upstream oil and gas
industry. All of the four individual papers aim at measuring different aspects of
innovation at different stages in the innovation process. The simplified
definition of innovation is: a “new idea, device or method” or “the act or process
of introducing new ideas, devices or methods” (Merriam-Webster 2016).
Innovation is both the process of e.g. developing new markets and/or new
products, or new methods of production, as well as the outcome: e.g. increase
in value added, or a new product.
Although innovation is not a chronological process without any setbacks or
loops (Kline and Rosenberg 1986), the innovation process goes through stages
that are distinct in time, i.e. patenting, product and process innovations, and
launching these product in markets and an increase in revenue at the bottom
line caused by innovations. In Paper I, innovation is measured in three ways:
firstly by the decision to engage in systematic development work, secondly by
patent, and thirdly by product and process innovation. Paper II measures
innovation by product innovation (and new-to-market product innovation) and
process innovation (and new-to-industry process innovation). Paper III
measures innovation by looking at whether firms have launched goods and/or
services in international markets. Paper IV measures the effects of industrial
agglomeration on firms’ value added, where increased innovation is an
important underlying factor leading to increased productivity for firms that are
geographically co-located. Hence, all of the four individual papers offer a
distinct and different outlook on innovation, including product innovation,
effects on productivity, and new processes or underlying mechanisms of
collaboration and market entry. Various econometric analyses are employed in
the different papers, and mostly similar techniques are used.
Results
All of the four individual papers demonstrate that different aspects of diversity
and space affect innovation. The results from paper I demonstrate that
exploration (patent output) responds differently to the composition of firms’
human resource bases than exploitation (new products & production processes)
does. Moreover, the results demonstrate that exploration is dependent on
diversity of human resources, whilst exploitation is more dependent on similar
capabilities. Investments in innovation are important moderators of these
effects. Paper II and Paper III investigates the role of foreign workers in firms
and demonstrates some of the underlying mechanisms between foreign
workers, international partners and innovation/export of goods and/or services
to international markets. In Paper II, we find evidence that firms with highly
educated foreign workers collaborate more frequently with international
partners and that there is a positive relation between having a variety of
international partners and the probability of product innovation and new-tomarket
product innovation (as well as new-to-industry process innovation). The
results from Paper III demonstrate that firms in core, intermediate, and
peripheral regions benefit from international collaboration and foreign workers
in order to be present on international markets. The results stresses that firms
in peripheral regions are not detached from the global economy, but are able to
partake in able to tap into global economies by e.g. collaborating with
international partners. Paper IV studies a particular industry, namely the
upstream oil and gas industry in Norway, and finds that firms in this industry
benefit from regional agglomeration through increased productivity as
measured by value added. This is particularly so when firms within the same
subsector are co-located. Knowledge spillovers leading to increased innovation
are believed to be an important underlying factor driving agglomeration related
productivity growth.
Conclusions
The four individual papers all demonstrate different aspects of the
interdependencies between firms and their contexts while also highlighting the
role of diversity. The papers demonstrate how diversity amongst actors
contributes to some types of innovation, whilst other types of innovation are
facilitated through similarity between actors. The results from paper I
demonstrates how exploration (patent output) is more dependent on diversity
in human resources, than exploitation where similarity in experience and
educational background seems more important. The results from paper II
demonstrates how diversity amongst workers, as measured by foreign workers,
may contribute to new collaboration patterns, which in turn prove essential for
product and new-to-market product innovation as well as new-to-industry
process innovation. The results from paper III demonstrate that firms in core,
intermediate, and peripheral regions benefit from collaborating with
international partners and hiring foreign workers in order to be present on
international markets. The results paint a varied picture of different dimensions
of innovation in relation to different measures of diversity, but furthermore in
relation to space and context. This provides an important element of not only
increasing our understanding of the role of diversity in both core, intermediate,
and peripheral regions, but also since past contributions have had a tendency to
study globalization and diversity in cities, the results demonstrate the capability
of benefitting of diversity across space. The results from paper IV demonstrate
that close communication and substantial interaction between suppliers and
buyers that permeate the upstream oil and gas industry proves pivotal in
increasing value added. This is particularly the case when firms within the same
subsector are co-located, further stressing the importance of similarity between
actors.
Beskrivelse
PhD thesis in management
Består av
Solheim, Marte C.W. and Sverre J. Herstad. “On the differentiated effects of human resource diversity on organizational learning and innovation”.Solheim, Marte C.W. and Rune Dahl Fitjar (2016) ”Foreign workers are associated with innovation, but why? International networks as a mechanism”. International Regional Science Review. DOI: 10.1177/0160017615626217
Solheim, Marte C.W. “Foreign workers and international partners as channels to international markets in core, intermediate and peripheral regions”. Published in Regional Studies, Regional Science online ahead of print 07.12.2016.
Solheim, Marte C.W. and Ragnar Tveterås. “Do firms in upstream oil and gas sectors benefit from co-location?”