Networks and innovation in the subsea industry in Rogaland: Will position in the network affect a company's ability to innovate?

Abstract

Subsea is an advanced, high technology industry making oil extraction possible, simpler and safer in deep seas and rough weather conditions. Subsea is an industry where Norwegian companies have gained acknowledgment for their skills, products and services. Rogaland is the region in Norway with highest activity within the oil and gas industry. This thesis examines the structure of the network and collaboration among subsea companies in Rogaland. We examine if actors with central positions are more innovative than the less central, our research question being: Will position in the network affect a company’s ability to innovate? We present theory on clusters, regional innovation systems and knowledge bases. Four hypotheses are developed from the existing empirics. H1: A cluster needs joint action for the companies to collaborate with each other. H2: A cluster does not need joint action for the companies to collaborate with each other. H3: A central position in the network makes the company innovative. H4: A central position in the network does not affect a company’s innovative ability. Innovation in the subsea industry is usually based on a customer need. Since oil companies are the subsea companies’ final customers, they are included in the second part of the analysis. We have interviewed all, but one, subsea companies in the region and 7 oil companies. We asked them questions regarding innovation and their collaborative relations to other companies. A social network analysis was applied on the interview data about collaboration. We analysed the extent of collaboration and each actor’s centrality in the network. We then applied pairwise correlations and logistic regressions to see if centrality measures could explain differences in companies’ ability to innovate. We found a high degree of collaboration between the subsea companies in Rogaland, even though there are no joint actions in the form of cluster organisation. We found that position in the network, measured by in-degree centrality, can increase the likelihood that a company in the subsea industry has made use of new or significantly improved production processes, technology, components or materials, this result is supported in both populations. However, for none of the other innovation measures we found significant results using centrality as an explanatory variable.