Firm Level Learning

World Development 27(9): 1651-71 1999.

This paper examines the case of adjustment in a labor-intensive export industry (woolen knitwear) to understand how traditional sectors in developing regions cope with external crises and rise above them. India's woolen knitwear industry, concentrated in Ludhiana, recently survived two crisesÐthe collapse of its largest export market (the former Soviet Union), and the simultaneous opening up of the domestic market to freer trade. After an unusually short downturn, the cluster not only recovered rapidly, but is increasingly diversifying into more demanding and competitive external markets. Four factors are key to explaining this surprisingly resilient recovery. First, the best performing ®rms had a strong and simultaneous presence in dynamic segments of the domestic market alongside exports. This generated key organizational learning, and built managerial and production capacities that helped ®rms adapt quickly to more demanding markets later. Second, an important feature of the learning relationship between ®rst-time exporters and their foreign buyers was the small-scale nature of contracts and a ``customization of ®t'' between the producer and the feedback-giving intermediary. Third, better performing ®rms paid equal if not greater attention to making organizational changes in their work practices than to the purchase of new equipment. Fourth, the embedded nature of production networks, and the government's past programs to assist local ®rms have indirectly helped create a dynamic middle-tier of locally-rooted exporters who appear to be leading the cluster's transformation and modernization.

In this article, we make two important contributions to the literature on clusters. First, we provide a broader theory of cluster connectivity that has hitherto focused on organization-based pipelines and MNE subsidiaries, by including linkages in the form of personal relationships. Second, we use the lens of social network theory to derive a number of testable propositions. We propose that global linkages with decentralized network structures have the highest potential for local spillovers. In the emerging economy context, our theory implies that clusters linked to the global economy by decentralized pipelines have potential for in-depth catch-up, focused in industry and technology scope. In contrast, clusters linked through decentralized personal relationships have potential for in-breadth catch-up over a range of related industries and technologies. We illustrate our theoretical propositions by contrasting two emerging economy case studies: Bollywood, the Indian filmed entertainment cluster in Mumbai and the Indian software cluster in Bangalore.

... Address for correspondence: Marjolein CJ Caniëls, Open University of the Netherlands (OUNL), Faculty of Management Sciences (MW), PO Box 2960, 6401 DL Heerlen, the Netherlands; emailmarjolein.caniels{at}ou.nl. Received March 10, 2003. Accepted December 4, 2003. ...

Abstract: An evolutionary model of the product life cycle is applied to derive the experience curve and the market size of (expensive) durable goods. The experience (learning) curve suggests that the real costs per unit decrease with an increasing cumulative output (Henderson's law). Based on the idea that in a competitive market firms are forced to pass cost advantages on to the price, the evolutionary model suggests that the mean price and also the mean costs are governed by an exponential decline with time.

Abstract: The concept of “embeddedness” refers to the social construction of inter-firm relationships and the enmeshing of economic relationships within broader social structures and relationships in particular places. Previous research has suggested “embedding” is the best way to generate local growth and social capital and has focused on SMEs in Europe and North America, although the existing model is being more widely adopted now. This volume is the first to examine the complex processes of “embedding” in this wider context. ...

The paper throws new light on the debate about the role played by local knowledge spillovers (LKS) as a driver of regional innovative activity. It transcends the regional level of analysis that has been commonly adopted in the literature so far, using insights from the evolutionary theory of the firm. This makes it possible to derive a typology of mechanisms through which
regional agglomeration may stimulate learning and innovation at the firm level. When this typology is brought to bear on the extant approaches in the debate, the contrasting viewpoints can be reconciled to some extent. The main conclusion is that little theoretical ground for the LKS debate remains

Key words: Localised knowledge spillovers (LKS), Evolutionary theory, Firm- level learning, Regions, Clusters

JEL classifications: O18, O31, O32, R58

... 1 Open University of The Netherlands, Department of Economics, Business and Public Administration (EBB), Valkenburgerweg 177, PO Box 2960, 6401 DL, Heerlen, The Netherlands (e-mail: marjolein.caniels@ou.nl) 2 Eindhoven Centre for Innovation Studies (ECIS ...

The purposes of this paper are identifying the core-dimensions that shape RIS structure and evaluate if the underlying RIS subsystems exert any statistically significant effect on employment and economic growth. Empirical evidences demonstrate that RIS subsystems are not homogenous and some of them have negative side-effects. However, RIS subsystems can be managed effectively both for improving welfare and for achieving a higher wealth, if they are measured, planned and implemented in an integrated way. Increasing Governmental R&D investment is a necessary condition for building sustainable development but should be combined with other policy measures to become effective. Results suggest the idea that European Commission’s Research and Innovation policies aren’t as effective as they should and must be restructured, shifting from an expenditure increase paradigm and from a transnational approach, to a localized, operational and measurable framework in order to effectively translate R&D investments in to employment and economic growth.
Keywords: Regional Innovation Systems (RIS), European Paradox, Eight Framework Program (FP8), Europe 2020 Growth Strategy

In the article the author assumes that the idea of smart specialization can stimulate the development of cluster initiatives  operating in the EU. In the first part, the author explains the essence of smart specialization concept. Then, in the following sections, he describes the process of identifying smart specialization in EU regions and collates the smart specialization concept with of some economic theories, particularly with M. Porter’s theory of industrial clusters.

Learning regions--their appearence, representations, functions and developments--became a R&D movement at the turn of the 1990/2000s. The paper investigates one of the forerunners of this movement in Eastern Europe. The R&D of the "urban centres of learning" proved to be an R&D movement during the 1980s which led to the political change of 1989/90. Similarities in the two movements: a) learning and innovation as the vehicle of social change; b) back to the localities and regionalitis; and c) looking for political alternatives to the existing structures and organisations.