Innovation, Networks, and Knowledge Spillovers
Selected Essays
1st Edition
Published on 2. December 2006
VIII, 272 pages
978-3-540-35981-4 (ISBN)
Description
Our understanding of innovation processes has dramatically changed over the past decades. Interactive models of innovation, differing significantly from the linear approach, now emphasize both the importance of networking activities both within and across firms, and the centrality of knowledge spillovers which lie at the root of the formation of networks. The study of knowledge spillovers has become a major focus of research on innovative networks in recent years. Part of this research tradition can be traced back to the early work of Alfred Marshall on external economies through which 'industrial districts' - as he termed them - were integrated. This book brings together a collection of articles and book chapters which present an overview and synthesis of current knowledge in the Economics of Innovation. It both reviews what is known and accepted as the best thinking on selected topics in the field and provides research findings that offer valuable insights into the nature and process of innovation, network formation and network activities, knowledge generation and spillovers from a regional perspective. By presenting the articles and book chapters as a whole, this collection is a novel combination. It is being published simultaneously with Spatial Analysis and GeoComputation: Selected Essays. Innovation, Networks and Knowledge Spillovers is essentially a multi-product undertaking, in the sense that the various contributions are largely multi-authored publications. All these co-authors deserve the full credit for this volume, as they have been the scientific source of the research contributions included in the present volume.
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Content
Technological change and the nature of the firm.- Innovation and Technological Change.- Innovation and Technological Change: An Austrian-British Comparison.- Technology, Organisation and Export-driven Research and Development in Austria's Electronics Industry.- Information Processing, Technological Progress, and Retail Market Dynamics.- Innovation and Network Activities.- The New Economy and Networking.- The Innovation Process and Network Activities of Manufacturing Firms.- Knowledge Interactions between Universities and Industry in Austria: Sectoral Patterns and Determinants.- Knowledge Creation, Diffusion and Spillovers.- Innovation, Knowledge Creation and Systems of Innovation.- The Role of Space in the Creation of Knowledge in Austria: An Exploratory Spatial Data Analysis.- Spatial Knowledge Spillovers and University Research: Evidence from Austria.- Patents, Patent Citations and the Geography of Knowledge Spillovers in Europe.
4 Information Processing, Technological Progress, and Retail Market Dynamics (p. 73)
with J. Cukrowski
The chapter analyses the potential impact of technological progress in information processing on the size of retail markets. The analysis - restricted to a single commodity market with uncertain demand - shows that the ability of firms to process information and predict demand may affect the characteristics of retail markets.
The results, moreover, indicate that risk-averse firms always devote resources to demand forecasting, producers are better off trading with retailers than with final consumers, and the volume of output supplied through retail markets is greater than it would be if producers traded directly with consumers.
1 Introduction
Corporations are generating information at an exponential rate. It is three forces that are fueling the rate of growth: the use of informative technology to automate business processes, the implementation of enterprise resource planning systems, and the diffusion of information technology within the business. As the quantity of information collected and stored by corporations has soared, managers have realised that information is an enterprise's most valuable asset. It contains a record of past corporate performance.
A clear vision of the past, present and future is essential to sustain competitivity in the rapidly changing business world. The dynamic application of information often separates the success from the failures in many sectors of the economy. The interfaces between developments in information technology, retailing strategies and consumer behaviour are attracting an increasing amount of attention in the marketing and economic literature. Most of this literature either summerises recent developments or speculates about future developments and their economic and social impacts (see e.g., Webster 1994, Jeannet and Hennessey 1995, De Canio and Watkins 1998).
This present contribution takes a somewhat different stance. The view is taken that technological progress in information processing increases the number of firms operating in retail markets. The existence of retail markets and the role of retail firms are traditionally explained by spatial factors and increasing returns to scale in transportation, storage or in the acquisition and dissemination of information about the quality, range, and prices of products available (see, e.g., Heal 1980, Wilson 1975).
In many cases, such as retail trade in services or in goods which can not be transported or stored, most of these factors are irrelevant. The major shortcoming of the earlier literature on retail markets is that it attempts to view retail trade only from the supply side, and the models used have no explicit reference to demand, especially to demand uncertainty, which is natural in most markets.
This current contribution makes a modest attempt to show that retail trade (or at least part of it) may not be connected with economies of scale and that it can be explained exclusively by the rational behaviour of firms operating in a stochastic environment. Since retailers are, by definition, intermediaries between consumers and suppliers, they can serve as a buffer between suppliers and a market with demand uncertainty, and, in particular, they can bear the risk associated with demand fluctuations.
Thus, to analyse retailing convincingly one needs to explicitly model the interaction between consumers and suppliers in an uncertain environment.
with J. Cukrowski
The chapter analyses the potential impact of technological progress in information processing on the size of retail markets. The analysis - restricted to a single commodity market with uncertain demand - shows that the ability of firms to process information and predict demand may affect the characteristics of retail markets.
The results, moreover, indicate that risk-averse firms always devote resources to demand forecasting, producers are better off trading with retailers than with final consumers, and the volume of output supplied through retail markets is greater than it would be if producers traded directly with consumers.
1 Introduction
Corporations are generating information at an exponential rate. It is three forces that are fueling the rate of growth: the use of informative technology to automate business processes, the implementation of enterprise resource planning systems, and the diffusion of information technology within the business. As the quantity of information collected and stored by corporations has soared, managers have realised that information is an enterprise's most valuable asset. It contains a record of past corporate performance.
A clear vision of the past, present and future is essential to sustain competitivity in the rapidly changing business world. The dynamic application of information often separates the success from the failures in many sectors of the economy. The interfaces between developments in information technology, retailing strategies and consumer behaviour are attracting an increasing amount of attention in the marketing and economic literature. Most of this literature either summerises recent developments or speculates about future developments and their economic and social impacts (see e.g., Webster 1994, Jeannet and Hennessey 1995, De Canio and Watkins 1998).
This present contribution takes a somewhat different stance. The view is taken that technological progress in information processing increases the number of firms operating in retail markets. The existence of retail markets and the role of retail firms are traditionally explained by spatial factors and increasing returns to scale in transportation, storage or in the acquisition and dissemination of information about the quality, range, and prices of products available (see, e.g., Heal 1980, Wilson 1975).
In many cases, such as retail trade in services or in goods which can not be transported or stored, most of these factors are irrelevant. The major shortcoming of the earlier literature on retail markets is that it attempts to view retail trade only from the supply side, and the models used have no explicit reference to demand, especially to demand uncertainty, which is natural in most markets.
This current contribution makes a modest attempt to show that retail trade (or at least part of it) may not be connected with economies of scale and that it can be explained exclusively by the rational behaviour of firms operating in a stochastic environment. Since retailers are, by definition, intermediaries between consumers and suppliers, they can serve as a buffer between suppliers and a market with demand uncertainty, and, in particular, they can bear the risk associated with demand fluctuations.
Thus, to analyse retailing convincingly one needs to explicitly model the interaction between consumers and suppliers in an uncertain environment.
