How and Why do Levels of Innovation Differ across Norwegian

(1)

How and Why do Levels of

Innovation Differ across Norwegian

City Regions?

Rune Dahl Fitjar IRIS

Rune Dahl Fitjar, IRIS

(2)

Research questions

• What are the main drivers behind

innovation in Norwegian city regions?

How do firms in Norway overcome

• How do firms in Norway overcome

geographical distance in order to remain

competitive?

• Are there significant differences in

innovative capacity and in the sources of

this capacity among Norwegian

(3)

Agglomeration as a driver for innovation

• Agglomeration leads to:

gg

– Dense institutionalised markets (Trigilia 1992)

• in which actors share knowledge resources • and social and political capital is formed • and social and political capital is formed

– Face-to-face interaction

• associations among stakeholders (Cooke and Morgan 1998) • creating relational locational assets (Storper 1997)

• creating relational locational assets (Storper 1997)

– Knowledge spillovers

• within closely-knit clusters (Florida 2002, Porter 1990) h f t it k l d

• exchange of tacit knowledge

– Innovation

• Learning regions (Cooke and Morgan 1998)

• Innovation prone societies (Rodríguez-Pose 1999)

(4)

Options for peripheral areas

• Overcoming geographical distance

Overcoming geographical distance

– Global pipelines

• Different types of proximities (Boschma 2005)

yp

p

(

)

– Cognitive: Similarity of knowledge base and expertise

– Organisational: Sharing of relations in an org. arrangement

– Social: Trusting relations between micro-level agents

– Institutional: Similarity of language, norms, habits, legislation

Firms exploit non geograpichal proximities to

• Firms exploit non-geograpichal proximities to

– become globally connected

– draw on assets and capabilities from elsewhere

draw on assets and capabilities from elsewhere

(5)

Reducing distances

• How can these types of non-geographical

distances be reduced?

– Through collaboration

• Human interaction

• Mutual learning

– Soft institutions

• Reduce suspicion

(6)

Innovation and the social filter

Rodríguez-Pose 1999: ”Innovation Prone and Innovation Averse Societies” Rodríguez Pose 1999: Innovation Prone and Innovation Averse Societies

(7)

Analytical Model

S ft i tit ti Cooperation Soft institutions • Social capital

• Values and attitudes • Trust Innovation • Trust • Open-mindedness _Geographical orientation of cooperation cooperation

(8)

Innovation in Norwegian city regions

Product

Process

(% yes)

Total

Radical

Total

Radical

N

Oslo

59 6 %

34 0 %

50 4 %

20 4 %

403

Oslo

59.6 %

34.0 %

50.4 %

20.4 %

403

Bergen

46.4 %

25.1 %

42.4 %

16.5 %

401

Stavanger

54.0 %

33.8 %

46.8 %

18.8 %

400

T

dh i

52 3 %

29 0 %

48 7 %

19 7 %

300

Trondheim

52.3 %

29.0 %

48.7 %

19.7 %

300

Kristiansand 58.0 %

30.0 %

47.0 %

20.0 %

100

Total

53.4 %

30.5 %

46.9 %

18.8 %

1604

(9)

Percent of companies using partner type

50 60 40 30 10 20 0

Internal Suppliers Customers Competitors Consultants Universities Research Internal Suppliers Customers Competitors Consultants Universities Research

inst.

(10)

Partner types used, by city region

80 90 60 70 40 50 20 30 0 10

Internal Suppliers Customers Competitors Consultants Universities Research Internal Suppliers Customers Competitors Consultants Universities Research

inst.

(11)

No. of partner types used

3,0 2 0 2,5 1,5 2,0 Regional National 1,0 National International 0,5 0,0

(12)

Does cooperation lead to innovation?

New to market Product

Logistic regression models, N = 1604.

Controls: Sector, region, education, age,

board memberships _market Process New to _industry

0.05

(0.04)

0.05

(0.03)

Diversity of local partners

p

0.03

(0.03)

industry

0.01

(0.04)

0 23***

0 19***

0.05

(0.04)

Diversity of national partners

0 09

0.03

(0.04)

0.07

(0.04)

0 13**

0.07

(0.05)

0.23***

(0.05)

0.43*

0.19***

(0.05)

Diversity of international partners

0.50*

% foreign ownership

0.28

0.09

(0.05)

0.13

0.13**

(0.05)

(0.19)

0.15*

(0 06)

(0.21)

% foreign ownership

0.22***

(0 06)

(0.19)

0.25***

(0 06)

Log no. of employees

(0.22)

0.18**

(0 07)

(0.06)

Nagelkerke R

2

(0.06)

0.11

0.15

(0.07)

0.11

* p < 0.05, ** p < 0.01, *** p < 0.001

(13)

Regional cooperation and product innovation

1 0.8 n nov a ti on 0 6 d of pr oduc t i n 0.6 L ik e lih o o d 0.4 0.2 N f i l 0 0 2 4 6

(14)

National cooperation and product innovation

1 0.8 nnovat io n 0.6 d of pr oduc t i L ik e lih o o _0.4 0.2 No of national partners 0 0 2 4 6

(15)

International cooperation and product innovation

1 0.8 nnovat io n 0.6 d of pr oduc t i L ik e lih o o _0.4 0.2 No of international partners 0 0 2 4 6

(16)

Company size and product innovation

1 0.8 in n o v a ti o n 0.6 o d of pr oduct L ik e lih o o 0.4 0.2 No. of employees 0 0 1000 2000 3000 4000 No. of employees

(17)

Foreign ownership and product innovation

1 0.8 nnovat io n 0.6 d of pr oduc t i L ik e lih o o _0.4 0.2

Proportion foreign ownership

0

0.0 0.2 0.4 0.6 0.8 1.0

(18)

Manager’s age and product innovation

1 0.8 nnov at io n 0.6 d of pr oduct i L ik e lih o o d 0.4 0.2 Manager's age 0 20 40 60 80 Manager s age

(19)

Regional cooperation and radical prod. innovation

1 n 0.8 u ct i n n o vat io n 0.6 f r a di c a l pr od u Li k e li h ood o f 0.4 0.2 No of regional partners 0 0 2 4 6

(20)

International cooperation and radical prod. innov.

1 n 0.8 u ct i n n o vat io n 0.6 f r a di c a l pr od u Li k e li h ood o f 0.4 0.2 No of international partners 0 0 2 4 6

(21)

Regional cooperation and process innovation

1 0.8 innov at io n 0.6 d of pr oc es s i L ik e lih o o d 0.4 0.2 No of regional partners 0 0 2 4 6

(22)

International cooperation and process innovation

1 0.8 n novat ion 0.6 d of pr oc es s i n 0.6 L ik e lih o o d 0.4 0.2 No of international partners 0 0 2 4 6

(23)

Regional cooperation and radical process innov.

1 n 0.8 e ss i n no vat io 0.6 ra di c a l pr oc e L ik e lih o o d o f _0.4 L 0.2 No of regional partners 0 0 2 4 6

(24)

International cooperation and radical proc. innov.

1 n 0.8 ss i n no vat io n 0.6 radi c al pr oc e 0.6 L ik e lih o o d o f r 0.4 L 0.2 No of international partners 0 0 2 4 6

(25)

Regional management cultures?

Mean scores scales 0-1/0-3/0-4 Oslo Bergen Stav Tr heim Kr sand

Mean scores, scales 0-1/0-3/0-4 Oslo Bergen Stav. Tr.heim Kr.sand

Trust other people in general 0.81 0.81 0.84 0.83 0.81

Trust in regional business managersg g 3.04* 3.06 3.18 3.15 3.23

Trust in regional politicians 1.90 1.81 2.04* 1.87 1.97

Trust in regional bureaucrats 2.61 2.53 2.57 2.72* 2.82*

Regional empl > company profits 2.29*** 2.79* 2.80* 2.74 2.79

Easier cooperate with reg. actors 1.75*** 2.38 2.70*** 2.35 2.21

Include staff in decision-making 3.53 3.48 3.40** 3.54 3.59

Let staff get their way when wrong 2.86 2.75* 2.87 2.92 2.85

Old and proven > newfangled ideas 0 97** 1 10 1 09 1 15 1 10

Old and proven > newfangled ideas 0.97** 1.10 1.09 1.15 1.10

Impr. understanding of for. cultures 1.73 1.64 1.71 1.63 1.56

Wish more open to outside world 2.27 2.20 2.16 2.22 2.24

Comfortable w ppl open to change 2.76 2.71 2.66* 2.72 2.78

N 403 401 400 300 100

Probability of regional mean different from combined mean of other regions: * p < 0.05, ** p < 0.01, *** p < 0.001

(26)

”I find it easier to cooperate with local and regional

actors than with people from outside the region”

10 30 16 15 ₁₇ ₁₉

p p

g

15 10 16 21 15 10 ₁₅ 21 23 20 20 ₂₁ 16 16 11 21 18 31 45 32 ₂₉ 16 18

Oslo Bergen Stavanger Trondheim Kristiansand Fully agree Partly agree Neutral Partly disagree Fully disagree

(27)

”It is important to maintain employment in the region, even if it should hurt the business' profits”

9 9 ₁₁ 10 17 7 7 8 7 p 15 15 16 ₁₃ 13 14 29 31 32 ₃₂ 36 15 36 35 35 ₃₃ 29 23 36 35 35 33

(28)

2 3 1 1 2

2 1 2 2 ₃

”I trust other business managers in this region"

20 20 18 18 9 2 3 2 36 38 36 35 38 36 38 34 36 43 41 45

(29)

”I trust politicians in this region”

15 ₁₆ 14 ₁₇ 8 19 19 15 19 ₂₁ 31 31 15 ₁₆ ₁₇ 8 30 ₃₄ ₃₁ 27 ₂₅ 32 ₂₄ 33 8 ₆ 8 9 7

Oslo Bergeng Stavangerg Trondheim Kristiansand Fully agree Partly agree Neutral Partly disagree Fully disagree

(30)

"I need to improve my understanding of other countries'

cultures"

18 ₂₀ ₂₀ ₂₂ ₂₂ 16 19 16 17 ₂₃ 38 ₃₃ 35 ₃₄ 31 31 26 25 27 25 ₂₃

Oslo Bergen Stavanger Trondheim Kristiansand Fully agree Partly agree Partly disagree Fully disagree

(31)

"I am most comfortable around people who are open to

change and new ideas"

19 ₂₅ 29 25 20 2 2 1 1 1 0 0 1 0 0 9 78 ₇₃ ₇₃ 79 78 ₇₃ 69 73 79

Oslo Bergen Stavanger Trondheim Kristiansand Fully agree Partly agree Partly disagree Fully disagree

(32)

Dimensions of managers’ values

Principal components N=1604 Comp 1 Comp 2 Comp 3 Comp 4 General trust Open-mindedn Regional orientation Work-rel. trust

Principal components, N=1604 Comp. 1 Comp. 2 Comp. 3 Comp. 4 Trust in other people in general 0.37 -0.13 -0.29 0.37 Trust in regional business managers 0.67 -0.00 0.06 0.05

trust mindedn. orientation trust

g g

Trust in regional politicians 0.77 0.07 -0.02 -0.04

Trust in regional bureaucrats 0.74 0.08 -0.02 0.10

Regional employment > company profits 0.06 0.06 0.65 0.11

Easier cooperate with regional actors 0.04 -0.07 0.70 -0.00

Include staff in decision-making 0.12 0.14 -0.02 0.72 Let staff get their way even when wrong -0.04 0.04 0.17 0.72 Old and proven > newfangled ideas 0 09 0 11 0 54 0 00

Old and proven > newfangled ideas -0.09 -0.11 0.54 0.00

Impr. understanding of foreign cultures 0.07 0.69 -0.20 -0.06

Wish Norw. more open to outside world 0.09 0.76 -0.03 0.02

Wish Norw. more open to outside world 0.09 0.76 0.03 0.02

More comfortable w ppl open to change -0.05 0.62 0.09 0.22

(33)

Does culture explain cooperation?

Neg. bin. regressions, N = 1604

Regional

National

Internat’l

General trust (comp. 1) 0.07*** 0.06* 0.00

Work-related trust (comp. 4) 0.02 -0.01 -0.03

Open-mindedness (comp. 2) 0.02 0.01 0.23***

R l ( 3) 0 00 0 16*** 0 20***

Regional orientation (comp. 3) 0.00 -0.16*** -0.20***

Education -0.00 0.03* 0.07***

A 0 01*** 0 00 0 01

Age -0.01*** -0.00 -0.01

Log no. of employees 0.06** 0.16*** 0.15***

Log no of directorships 0 01 0 06 0 01

Log no. of directorships 0.01 0.06 -0.01

Foreign-owned share -0.14* -0.08 0.80***

Region Oslo ÷*** O/B/S < K/T* Not sign

Region Oslo ÷ O/B/S < K/T Not sign.

Sector Controlled Controlled Controlled

Pseudo R2

0 02

0 04

0 12

Pseudo R

0.02

0.04

0.12

(34)

Open-mindedness and regional cooperation

3 d 2.8 e r t y pes us e d 2.4 2.6 e gi onal par tn e 2.2 N u m b er of r e 2 1.8 Open-mindedness 1.6 -3 -2 -1 0 1 2 Open-mindedness

(35)

Open-mindedness and international cooperation

1.4 ed 1.2 rt n er t y pes us ₁ e rn at io nal pa r 0.8 um ber of i n te 0.4 0.6 N 0.2 Open-mindedness 0 -3 -2 -1 0 1 2 Open-mindedness

(36)

Regional orientation and regional cooperation

3 d 2.8 n er t y pes use d 2.4 2.6 e gi onal par tn 2.2 N u m b er of r e 2 1 6 1.8 Regional orientation 1.6 -3 -2 -1 0 1 2 3 Regional orientation

(37)

Regional orientation and international cooperation

1.4 ed 1.2 rt n er t y pes us ₁ e rn at io nal pa r 0.8 um ber of i n te 0.4 0.6 N 0.2 Regional orientation 0 -3 -2 -1 0 1 2 3 Regional orientation

(38)

General trust and regional cooperation

3 d 2.8 e r t y pes us e d 2.4 2.6 e gi onal par tn e 2.2 N u m b er of r e 2 1.8 General trust 1.6 -3 -2 -1 0 1 2 General trust

(39)

General trust and international cooperation

1.4 ed 1.2 rt n er t y pes us ₁ e rn at io nal pa r 0.8 um ber of i n te 0.4 0.6 N 0.2 General trust 0 -3 -2 -1 0 1 2 General trust

(40)

Foreign ownership and regional cooperation

3 d 2.8 e r t y pes us e d 2.4 2.6 e gi onal par tn e 2.2 N u m b er of r e 2 1.8

1.6

0.0 0.2 0.4 0.6 0.8 1.0

(41)

Foreign ownership and international cooperation

1.4 ed 1.2 rt n er t y pes us ₁ e rn at io nal pa r 0.8 um ber of i n te 0.4 0.6 N 0.2

0

0.0 0.2 0.4 0.6 0.8 1.0

(42)

Education and international cooperation

1 4 e d 1.2 1.4 tner t y pes us e 1 rnat ional par t 0.8 u m b er of i n te r 0.4 0.6 N u 0.2

Manager's level of education

0

0 2 4 6 8

(43)

Age and regional cooperation

d 3 e r t y pes us e d 2.5 e gi onal par tn e 2.5 N u m b er of r e 2 1.5 Manager's age 20 40 60 80 Manager s age

(44)

Conclusions

• International cooperation is conducive to most

p

kinds of innovation:

– Incremental and radical product innovation

R di l

i

ti

– Radical process innovation

• Regional and national cooperation has almost no

significant effect on innovation

• Patterns of cooperation are associated with

managers’ values and attitudes:

g

– Open-mindedness and lack of regional orientation

produces national and international cooperation

General trust produces regional and national

– General trust produces regional and national

cooperation

(45)

Conclusions II

Conclusions, II

• Oslo has the highest proportion of innovative

businesses in all categories, while Bergen

has the least

• Companies in Oslo cooperate more

internationally and less regionally

• Managers in Oslo are also less regionally

g

y

oriented on value dimensions, while

managers in Stavanger are more regionally

oriented than their counterparts