Marshall was wrong nothing is in the air

We answer these questions with a unique, tailor-made survey of 542 firms in Norway, where entrepreneurs and firm managers are explicitly asked about their most significant relationship for the introduction of services and processes during the last three years and about how exactly this relationship emerged. We distinguish between purpose-built relationships, caused by research done in-house or on advice of other partner organizations, and serendipitous or casual relationships, resulting either from trade fairs, professional events or similar venues for networking, or from pure casual encounters outside a work relationship.

The results of the analysis indicate that, at least regarding Norway, there could be ‘much less in the air’ than is normally assumed in the literature. Almost all of the relationships conducive to innovation in Norwegian firms emerged because of purpose-built searches predicated on in-house research by the firm and had little related to chance, serendipity, or ‘being there’. Only 8.2% of the firms developed purely casual relationships, as shown in Table 1. This is the case whether or not the firm was situated in an urban or rural environment – the analysis found no statistically significant correlation between your located area of the firm and the way the relationship emerged. Local partnerships did emerge more regularly due to casual encounters, but purpose-built relationships were more prevalent also between local partners – only 15.6% of local relationships were pure casual, in comparison to 58.8% that have been purpose-built predicated on in-house research.

Table 1. Emergence of relationships, frequency distribution

Furthermore, the limited amounts of relationships that derive from casual encounters tend, apart from new-to-the-industry process innovations, never to be connected with higher degrees of actual innovation. Conversely, purpose-built relationships are more clearly connected with innovation outcomes. As shown in Table 2, the share of firms reporting product innovation, new-to-market product innovation and process innovation is higher among those that collaborate in purpose-built or casual targeted relationships in comparison to firms without partners. However, among firms with pure casual relationships, the share of innovative firms is – apart from new-to-industry process innovation – only marginally rather than significantly not the same as the share among firms without partners. These email address details are confirmed in logit regression analyses, controlling for firm size, industry, R&D expenditure, education level and foreign ownership. In the analyses, collaborating in purpose-built relationships predicated on research is significantly connected with a higher odds of new-to-market product, process and new-to-industry process innovation, in comparison to having no partners. Purpose-built relationships following advice and casual targeted relationships are also significantly connected with new-to-market product innovation, while pure casual relationships are just connected with new-to-industry process innovation.

Table 2 . Emergence of partnerships and innovation, share of firms reporting innovation

The results of the analysis show that, at least regarding Norway, when firm-managers are directly asked, there appears to be hardly any ‘in the air’. The relationships that are in charge of the majority of innovation in Norwegian firms didn’t emerge from casual encounters, personal relationships, or serendipitous events, but were fundamentally purpose-built. Therefore that the partnerships which have generally resulted in innovation in Norwegian firms have overwhelmingly involved a conscious action by firms and their managers to measure the innovation problems of their firms and identify the proper partners to handle those problems. Specifically, local relationships which have any bearing on firm-level innovation usually do not show a significantly different origin from people that have international or other national partners located beyond your region. Nearly all relationships in both cases have a tendency to be purpose-built. The few serendipitous important relationships where Norwegian firms engage are also not so conducive to innovation. Firms that depend on partnerships predicated on casual encounters hardly innovate any longer than firms without the self-declared important partners, once other factors resulting in innovation are controlled for.

It can be the case that Norway is exceptional – it really is too rich, too remote, and lacks the agglomerations for ‘buzz’-driven innovation to take hold. Consequently, the results of our analysis might not necessarily be transferable to other contexts. It can be also the case that serendipitous and chance encounters can lead to partnerships that are not perceived as the main for innovation by managers, but that may nonetheless still result in innovation or that institutional constructs may facilitate knowledge spillovers in the partnerships that are established. Nonetheless it can also be the case that, by actually asking numerous firm managers about how exactly the relationships that are fundamental to innovation of their firm emerged, we have found that a thing that has been long assumed may necessitate further scrutiny. By constantly let’s assume that there is something ‘in the air’, we would have finished up like John Paul Young believing it, instead of testing it. We’ve wanted to think that ‘there is something in the air’, overlooking that, as stressed by Shearmur (2012: S14), various kinds of “innovation could be developed internally, at a slower pace, counting on research and development, secrecy, a well balanced workforce, and controlled interactions with the exterior”. Consequently, as a study community, we might have overstated “the need for cities in generating serendipitous interactions” (Shearmur 2012: S14). More research – and research in various places and using different methods – is therefore needed so that you can validate if the truth about innovation in high-density environments is nearer to the dictum that ‘there is something in the air’ or, in comparison, to the theory is that ‘little is in the air’ or ‘nothing is in the air’.

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