Interorganizational trust as the defining content of regional innovation systems
University of Maryland
Last modified: April 25, 2006
As national innovation and production systems grow in complexity throughout the world, scholars seek to better understand the dynamics and elements under which some systems succeed where others fail. More broadly, research examines how regions remain, grow and prosper through innovation and learning. This field of inquiry has been captured as regional advantage (Saxenian, 1994). We use simulation to examine whether this advantage is in fact 'regional,' proposing instead that the structure and interaction of innovation and production systems in regions is more determinant determinant of success that simply being located in the right geographic locale. Demonstrating this relation with enable the academic and policy communities to consider other forms of supra-firm advantage, some of which will cross geographic boundaries.
We model heterogeneous networks for technology introduction and product manufacturing to examine the effects that the contents and connections of these networks have on systems-wide resiliency and adaptability, conditions we define collectively as “regional learning” (Amdam, 2003; Hanssen-Bauer, 1996) Our simulation should show that loosely coupled, decentralized innovation and production systems engage more readily in the free flow of market knowledge, technological knowledge and trust. But, it should also show that these networks must be distinct in order to achieve these levels of adaptibility -- that in fact exploration and exploitation are dynamic learning systems that coexist interdependently yest distinctly.
These conditions create more resilient regions, which respond best in turbulent, hypercompetitive and uncertain environments. It also suggests that -- unlike Saxenianesque regional advantage – mechanisms for interorganizational trust form a stronger basis for learning at the system level than other, more accepted factors such as knowledge and culture. Building on regional advantage theory, trust between organizations stimulates and expedites actions, leading to continual replication of the network structures that produce regional advantage.