Innovation Interactions between Knowledge-Intensive Business Services and Small and Medium-Sized Enterprises

The current decade has stressed the reinforcement of three major trends affecting developed economies since at least half a century. The frrst trend concerns the importance of innovations for fIrms, regions and nations. Even if innovation, however defined, is not a recent phenomenon, the crucial role innovativeness plays in a world of increased competition reveals its importance as a major economic phenomenon. A second prominent trend corresponds to the “tertiarisation of the economy”, i.e. the considerable and continuous expansion of the share of services in contemporary economies. The third trend consists in the substantial changes affecting the economical meaning of “space”. Signs of these substantial changes can be found in the increased unity of “space” (the globalisation phenomenon), in the appearance of new territories (as suggested by the emergence of a “virtual continent” 2) as well as in the reconsideration of existing ones (for instance, induced by new flexible production systems). As such, these three trends express a triple breakdown: a breakdown in the time scale of the economy (due to the increasing velocity of economic activities), a breakdown in the nature of the economy (since “intangible production” is expanding) and a breakdown in the space(s) of the economy (because of shifting dimensions). Certain categories of activities or actors may highlight and even symbolise this triple rupture in diverse ways. An illustration can be found in the dominant market position of multinational corporations or “global enterprises” that has never been reached before. In parallel, these ruptures particularly highlight the development of what has been pointed out as the “symbolic workers’ high-tech nomadism” It also explains the (controversial) feeling that a quasiinstantaneous and virtual circulation of almost everything may be possible. The present work deals with activities and actors deeply affected by this triple rupture: the analysis focuses on innovation interactions taking place between small and medium-sized manufacturing enterprises (SMEs) and knowledge-intensive business services (KmS).

This chapter is devoted to the conceptual exploration of the innovation phenomenon itself. Innovation is at first presented as a process, specific to the evolution of the firm. Then, in the next section, the informational content of innovation is featured in relation with the knowledge base of the firm. Finally, and after having discussed the nature and forms of innovation in manufacturing and service firms, a continuum approach or broader conception of innovation is proposed

Following the review of the concept of innovation from the point of view of individual firms, the analysis will now turn to interactions between actors. More precisely, this chapter aims at exploring innovation-related interactions taking place between KIBS and SMEs. Firstly, different theoretical approaches to interactions will be confronted: the “make or buy” approach, the transaction costs theory and the network analysis. Then, the impacts of interactions with KIBS and SMEs between each other will be considered respectively

In the two previous chapters, innovation has been considered as an evolutionary process as well as an interactive knowledge-based phenomenon. Nevertheless, until this point, the spatial dimension has (deliberately) not been encompassed in the discussion. This will be done in this chapter, which aims at introducing spatial determinants in the analysis of innovation interaction. These spatial determinants are based on two main concepts: (i) the proximity between actors (i.e.considering interactions, the closeness according to different dimensions of interacting actors); and (ii) the territory on which actors are located (i.e.the elements geographically identifiable as a set which constitutes the reference environment of the considered actors). This chapter examines firstly the concept of proximity with regard to knowledge and innovation. The second section deals with the influence of the territory on innovation activities, considered as a system from a national and regional perspective. The final section exposes a synthesis of the impact of territorial determinants on the evolution of SMEs and KIES.

The present chapter is devoted to the operationalisation of the analysis and makes the link between the theoretical reflections and the empirical investigation. Firstly, a conceptual model of the analysis will be developed. This model encompasses the key variables selected for the statistical analysis and is derived from the previously expressed hypotheses. Secondly, the structure of the data collected for the analysis will be examined in terms of regions surveyed and of firm samples. The last section presents the statistical analysis procedure, constituted as a methodology specific to this investigation, combining three distinct data processes successively

This first chapter dealing with empirical results is focussed on the SME sample. The methodology adopted is the one described in the previous chapter, combining, in a successive way, segmentation procedures, multiple correspondence analysis and PROBIT algorithms

The final chapter attempts to present a general interpretation of the key findings related to SMEs and KIBS, to provide a broader scope to the analysis and to draw policy relevant conclusions from the whole investigation. In this respect, the results of the investigation are synthesised and discussed in the light of other studies in section 7.1. Then, adopting a broader perspective, an integrated typology of innovation interactions involving SMEs and KIBS is proposed in section 7.2. Finally, the main policy implications of the research are discussed in section 7.3 which notably details elements contributing to a renewed policy agenda at regional level