How open innovation processes vary between urban and remote environments: slow innovators, market-sourced information and frequency of interaction

Abstract

Geographic research on firm-level innovation is generally premised on the idea of open innovation, suggesting that innovation occurs more readily in urban settings or clusters, which generate local buzz and allow access to external actors. However, a growing body of evidence demonstrates that firms also introduce first-to-market innovations in remote locations. In this exploratory paper, building upon work by Philip McCann, we outline a conceptual framework that connects innovators (differentiated by information source and frequency of interaction with interlocutors) and location (distance from a metropolitan area): slow innovators, relying on non-market-sourced information and infrequent contacts, will be overrepresented in isolated locations. Fast innovators, relying on market-sourced information and frequent interactions, will locate closer to cities. Our results confirm this. Our interpretation of these results – slow innovators are more reliant on technological information which loses value more slowly than faster decaying market-oriented information – requires further investigation.

Keywords:

• Innovation
• urban
• periphery
• information sources
• contact frequency
• information value

Acknowledgements

We would like to thank three anonymous referees for their helpful comments that have enabled us to tighten the arguments presented in this paper, and Ed Malecki for guiding this paper through the review process. Data gathering for this paper benefited from funding from Industry Canada (Economic Development Canada) and from the Canadian Social Sciences and Humanities Research Council (SSHRC). We remain solely responsible for the content of this paper.

Notes

1. The term innovation, unless otherwise specified, is used in a Schumpeterian sense and refers to the first commercial introduction of a new product, process, marketing or management technique. It does not refer to the subsequent growth and expansion of the innovative firm, as explained in the text (see Shearmur 2015).

2. In Quebec there are no private universities.

3. Large city: urban agglomeration greater than 50,000 people; Small city: urban agglomeration between 10,000 and 50,000 people; Rural: county with no urban agglomeration nor municipality of more than 10,000 people; Central: within about 100 km of a metropolitan area (i.e. Ottawa, Quebec or Montreal); Peripheral: beyond 100 km of a metropolitan area.

4. Asheim and Coenen (2006), for instance, suggest there are three broad categories of knowledge – analytic (science), symbolic (cultural, art) and synthetic (engineering) – and that these, in different combinations, characterize regional innovation systems. Our distinction between market-sourced (fast decaying) and non-market-sourced (technological/scientific, slow decaying) information partly overlaps these categories, both conceptually and in terms of the implied geography of interactions.