Innovation processes and industrial districts

Abstract

Innovation is based on the generation, diffusion and use of new knowledge. While it is possible to conceive of a firm that is so hennetic in its use of knowledge that all stages of innovation, including the combination of old and new knowledge, rely exclusively on internal sources, in practice most innovations involving products or processes of even modest complexity entail combining knowledge that derives, directly or indirectly, from several sources. Knowledge generation, therefore, must be accompanied by effective mechanisms for knowledge diffusion and for 'indigenizing' knowledge originally developed in other contexts and for other purposes so that it meets a new need.