The Effects of Exogenous Shocks on the Development of Regional Innovation Systems

Abstract

Drawing on previous studies related to the evolutionary aspects of regional innovation systems (RIS), this paper examines how an exogenous shock reduced organizational thinness, fragmentation and lock-in and thereby facilitated path creation and RIS emergence in a peripheral region. A longitudinal case study approach, based on primary data from 39 interviews conducted between 2008 and 2012, is used to investigate how a region was affected by the sudden entry and subsequent activity of a multinational oil company. A multi-level analysis illustrates how this exogenous shock facilitated change at the firm, public authority and macro (regional) levels and thus provides a holistic understanding of the complex mechanisms that underlie regional transformation. The analysis illustrates how the entry of the oil company reduced organizational thinness by stimulating the establishment of external firms. The existing regional actors then managed to reduce their organizational lock-in by adapting their skills and resource bases to new knowledge provided through interfirm relationships (reduced fragmentation), and this reduced organizational lock-in and fragmentation ultimately strengthened the industrial structure and further contributed to regional path creation. A number of innovations were observed, and in combination with the “thickened” institutional structure, this represented the means for an emerging RIS.

Keywords:

• regional innovation systems
• exogenous shock
• case study
• path dependency
• lock-in
• peripheral region

Disclosure Statement

No potential conflict of interest was reported by the author.

Notes

1. Sector experts refer to individuals with specialised knowledge of developments in the oil and gas industry.

2. Statistics Norway: www.ssb.no.

3. HSE&Q refers to Health, Safety, Environment and Quality.

4. HSE refers to Health, Safety and the Environment.