Hub Firms and the Dynamics of Territorial Innovation: Case Studies of Thales and Liebherr in Toulouse

Abstract

The principal objective of this paper was to offer an approach to the notion of hub firms using concepts from the economy of proximity. It shows that the specificity of the hub firm lies in its ability to combine technical and relational skills, allowing early involvement with, for example, an aircraft manufacturer in order to take part in the design and production of systems or sub-assemblies. A particular characteristic of the hub firm is the way it develops linked organizational and geographical proximities which this article analyses in detail. In particular, such firms demonstrate the capacity to establish different types of organizational proximity based on whether they are co-ordinating with the architect-integrators or with sub-contractors, proximities sometimes reinforced by a temporary geographical proximity. When hub firms co-ordinate with industrial or scientific partners, which help them to conceive and master particular sets of skills, they often forge links based on geographical proximity in order to develop the innovations necessary for the acquisition and master of these in-house skills. These theoretical arguments are then tested in the cases of the hub firms Thales Aerospace and Liebherr Aerospace in the Toulouse aeronautical complex.

Notes

This article is the result of a research contract co-financed by the Aquitaine and Midi-Pyrénées Regions in France and carried out between 2008 and 2010. The objective of this contract was to analyse the emergence of a new organisational form—the hub firm—in the fabric of the regional aeronautical industry.

If we take the example of a company, the internal division of work relates both to a cognitive necessity to assign a content to tasks, but also to a political necessity to structure the actions of individuals whose status and interests are different—shareholders, directors, employees, trade unions—and to distribute wealth.

Formerly known as Thales Avionics.

It goes back to the 1950s when the company was known as ABG SEMCA until it was bought by the Liebherr group in 1993.

TBUs are centres of technical development, distributed geographically depending on their specialized field (on-board computers in Meudon, cockpit technologies in Bordeaux, critical software in Toulouse, etc.).

Numerous authors have shown that the fact of being geographically close facilitates innovation through the ease of exchanging knowledge by face-to-face interactions. This is particularly the case among researchers claiming to adhere to the Economy of Proximity (see, for example, Rychen & Zimmermann, 2008; Carrincazeaux et al., 2008; also see Cooke, in press).

For example, the Victoria project managed by Thales and whose objective is to standardize flight calculators.

In 2008, Liebherr Aerospace co-led, with Safran, the SBU “Energy, motorization/equipment, propulsion and environment”, also acting as leader of an applied research project on surface treatment.