The Phenomenon of Agglomeration: From the Rediscovery of Marshall to Technological Externalities

6It was the rediscovery, in the 1980-1990s, of the works of Alfred Marshall which enabled an understanding of the agglomeration of activities beyond the pecuniary externalities that had largely been considered since the works of Weber (1909). In his writing, in fact, Marshall shows that, in a district, the concentration of economic activities is linked to external economies of scale created between small firms. Furthermore, a relational dynamic is established between agents, hence the emergence of a real “industrial atmosphere” when the “mysteries of trade become no mysteries; but are as it were in the air” (Marshall, 1906, p. 465).

7This rediscovery of Marshall’s work was first organised around Italian economists, such as Becattini (1992) or Bagnasco and Trigilia (1993) on the dynamism of the Third Italy. They highlight the role of shared cultural values at the centre of the dynamic of agglomeration. For these authors, the advantages of the district depend on cultural homogeneity, the interpersonal relations that develop there – shielding them from the large firm -, and the role of endogenous communities built around mutual trust. Consequently, in addition to pecuniary externalities, there was an emphasis on the existence of technological externalities [2].

8It is particularly to Arrow (1962a) that we owe the application to innovation of the analysis in terms of externality. Indeed, considering the characteristics of information and knowledge which form the technology, firms do not control their return on investment: R & D activity inevitably produces externalities, implying a difference between the social return and the private return of innovation. It is the spatial dimension of these technological externalities of knowledge (or “knowledge spillovers”) which results in the agglomeration of innovative activities.

9While Arrow mainly perceives the negative aspects, which should be limited, for example, through intellectual property rights, the geographical interpretation of these technological externalities results in a more positive reading (Gay, 2012). But this is based on an evolution in the theory of innovation that is addressed in the following sub-section (Nelson, Winter, 1982; Dosi, 1988).

Recognition of the Interactive Nature of Innovation: Between the Appropriation and Diffusion of Knowledge

10According to Arrow (1962b), Dosi (1988) and Lundvall (1988), among others, innovation is characterised by its interactions. This refers to at least two strong characteristics of innovation: its degree of uncertainty and its knowledge content. As pointed out by Paris and Raulet-Crozet (2016), these interactions are manifested at all levels: in the firms themselves, at the heart of the teams in charge of innovation, between firms, as part of horizontal or vertical relations, or between firms and a huge number of actors.

11It is works by evolutionists like Nelson and Winter (1982) or Dosi (1988) which led to a consideration that technical progress “does not fall from the sky” but that it results from the creation of knowledge from knowledge.

12It is the largely tacit aspect of this knowledge that requires specific interactions for it to be transmitted (Polanyi, 1967), in particular the interactions of trust and physical proximity.

13From the work of the evolutionists, innovation therefore appears to be a huge learning process (learning by doing, by using, by searching, by interacting, etc.), which combines resources and competences that are internal and external to the firm, implying that firms develop absorption capacity (Cohen, Levinthal, 1990). From then on, the economic problem posed by innovation is no longer only the incentive to innovate, but the need to accumulate, produce and diffuse knowledge. To do this, firms have to develop organisational learning, which is structured around social interactions (Nonaka, Takeuchi, 1997).

14But there is, consequently, a dilemma between appropriating or diffusing knowledge. In fact, knowledge produced in the process of innovation is non-rivalrous and difficult to exclude. Also, firms protect themselves against copying and imitation through intellectual property rights (patents, trademarks, design rights, copyright) or secrecy. This proprietary logic, typical of an innovation that remains “closed” in its approach, is traditionally accompanied by distrust of the exterior, in fact limiting the dynamics of external learning.

15In essence, we recall that, to innovate, the firm has first long sought, internally, to build a core competency, then to supplement it externally, in the territory, if needed. The agglomeration of innovative activities which results from this is, therefore, based on externalities regarding which firms hesitate to decide between limiting these or encouraging them. In such an approach to the relationship {space-innovation}, we understand why contemporary “homo fabers”, the do-it-yourselfers of the FabLabs or makerspaces, did not develop there.

The Territory, Cradle of Innovation?

16The analysis of relationships {space-innovation} has benefited from a third theoretical enrichment through the conceptual evolution of the space itself. This consisted in going beyond the perception of a neutral metric space, characteristic of the “economic geography” of P. Krugman. This evolution was produced by the “new industrial geography” movement, or the “socio-economic geography” movement (Lacour, 2009) where “the agglomeration of innovation appears to be “driven” by the territory” (Gay, Picard, 2001). Even if the concept of territory is marked by a conceptual vagueness, using it allows us to consider a subjective space, over and above administrative limits. As shown by the geographer Guy Di Méo (1998), the territory “demonstrates an appropriation of the space that is economic, ideological and political (so social) by groups that give a particular representation of themselves, of the story of their singularity” (Di Méo, 1998, p. 107, tr.). It is in this lived dimension that, in the decades of the 1980s and 1990s, the territory appeared to be the privileged space of innovation, through its social, cultural, institutional dimension, reinforced by the importance of social networks, based on the “force of weak links” (Granovetter, 1973).

17Amongst these works are those by Californian authors on territorial development (Scott, 1986; Scott, Storper, 1995). These include research which explains the causes of differences in the development of regions, for example comparing Silicon Valley and Route 128 (Saxenian, 1999). Studies on the learning region (Lawson, Lorenz, 1999; Florida, 1995) also contributed to this, sometimes excessive, recognition of the territory, while, as for works on culture and creativity (Howkins, 2001), these later allowed these approaches to be enhanced, which highlighted the capacity of the territory to welcome a high proportion of the creative class, which stimulates innovation (Florida, 2005). By putting interactivity at the heart of the innovation process, works on social capital (Adler, Kwon, 2002; Nahapiet, Goshal, 1998) are also highly instructive. It is the dynamics of learning that are at work and the social relationships of trust which partly support the territorial dynamic of innovation. In fact, “analyses of innovation, which were based (…) on the combination of different forms of physical capital, now, therefore, give an increasingly significant role to the different forms that social capital take” (Amara et al., 2003, p. 91, tr.).

18However, this passion for the territory led to a certain “overheating of the concept” (Pecqueur, 2009, p.56, tr.), a sanctification, which reduces the impact of this (Loilier, 2010). So there were criticisms at the turn of the 21st century. This is the case, for example, with Lazerson and Lorenzoni (1999), who criticised the Italian interpretation of Marshall’s works. They suggested that this neo-institutional approach “over-socialised” the district, and therefore the territory. Consequently, the positive effects of agglomeration on a territory can be questioned by the effects of competition between firms in the territory for access to resources and through their homogeneity (Raulet-Croset, 2008), and this questioning really occurred with the development of Information and Communications Technologies (ICT) (Paris, Raulet-Croset, 2016).

The Collaborative Innovation Space: Changes in Perspective

30The relational approach {space-innovation} in CISs shows the shifts in issues compared with those presented up to that point: the transition from closed innovation to open innovation (3.1.1.), the transition from the notion of a territory coupled with that of externality, to that of micro-locations, characterised by collaborations between actors in identifiable communities (3.1.2.).

A Conceptual Framework for Thinking about the Relationship {Space-Innovation}

41This framework (cf. Table 1) is to be understood in relation to the historical and critical interpretation of the relationship {space-innovation} which we have just undertaken. We have selected seven essential characteristics. The first concerns the paradigm of innovation. This is about characterising the approach to innovation chosen by socio-economic researchers and actors of innovation: it is traditionally presented as alternately closed or open (Isckia, Lescop, 2011). However, we must recognise that the passage between the two is not as radical. On the one hand, even innovation that is called closed goes beyond the boundaries of organisations, because of its interactive and uncertain nature. On the other hand, open innovation cannot completely free itself from the proprietary logic that guides actors of innovation. On the other hand, if the concept of open innovation helps to confirm to what point innovation that is encouraged by organisations ignores the boundaries of the firm, seeking external resources for an internal use or external opportunities for exploiting internal resources; it is not explained by the conditions of implementing such an opening (Loilier, Tellier, 2011). So the idea of collaborative innovation paves the way by implying a detailed analysis of the collaborative practices of CISs.

42The second characteristic examines the conception of the diffusion of knowledge; in other words, how knowledge linked to innovation is considered. Either this concerns an externality or a consequence to the potential benefit of other actors who have not contributed to innovation, which should, therefore, be controlled. Or it is consubstantial with innovation and, in this respect, it becomes a common good for all the actors involved (see Mignon, Laperche, 2018).

43The third characteristic relates to the concept of space. The territory is the framework for reflection if we look at territorialised innovation, while in the CISs, it is micro-locations that bring together actors who are keen to contribute to innovation, whether via physical and face-to-face relationships, or even virtual or even asynchronous relations. If, in the initial approach, the notion of territory helped to show how innovation is naturally interactive, embedded in social networks, for which the territory is a breeding ground which should be governed; the second approach is part of a context where ICTs help to exceed the constraints of proximity, without, however, resolving these. Thus, what makes a breeding ground is no longer spatial and institutional geography, but the very relationships between individuals that should be facilitated.

44And this concerns the fourth characteristic: the level of analysis or, in other words, what viewpoint is retained. If, in the first case, this concerns territory seen as the agglomeration of actors (individual, organisational, institutional), in the second it is the relationship, or what links the actors themselves, which should be examined. The fifth characteristic concerns these actors and highlights the fact that, in the CISs, there are mainly individuals (self-employed, start-uppers, etc.), whereas, in the initial approach, it is mainly firms which are concerned.

45The sixth characteristic describes the type of innovation: mainly technological (products and processes) or, in a complementary way, service, business model innovations, etc. This enables us to assess the final and seventh characteristic: the nature of the appropriation of innovation or how is the value generated by innovation captured and shared? In the case of territorialised innovation, the system of traditional intellectual property rights is mainly selected (patent, designs rights, copyright, multi-protection), while in CISs, this system is complemented by the system of contracts, particularly those specific to creative commons. Consequently, this is about adopting a vision of property as a cluster of rights and not as a monolithic group.

46We are not defending a dichotomous conceptual framework of analysing the passage from territorial innovation to collaborative innovation spaces. By contrast, this framework has the merit of highlighting the significant differences between the two approaches of the relationship {space-innovation}, and, consequently, of better understanding what are certain issues for contemporary organisations that are embedded in the CISs, and, potentially, to question the capacity of this new model to establish itself and to renew cluster management practices and firms in general.

New Issues to be Understood by Contemporary Organisations

47We choose to study issues related to two themes: opening the boundaries of the organisation and the role of actors in the collaborations that are entered into.

48Concerning opening the boundaries, it is now common to encourage this in order to collaborate with various partners. However, it must be concluded that this opening does not assume the same meaning, depending on the size or its sector. To be convinced of this, here are three illustrations. First, if SMEs are generally led to build collaborations to curb their lack of resources in innovation, this is not done without questioning the management of risks induced by such collaborations, which could prove disastrous (Séville, Szostak, 2017). Second, we can question the meaning of this opening for organisations of strategic sectors such as, for example, those of national defence, which are subject to secrecy. Third, if digital technology now plays an increasingly significant role in creating spaces where knowledge circulates, which supports opening (Barlatier, 2016), we know how, in the sector of cultural and creative industries, it has profoundly disrupted the question of the appropriation of innovation (Boily, 2009). This is why one of the concerns of this new model, in our view, concerns the sequence of opening and closing of the boundaries of the organisation (Dechamp, Szostak, 2016).

49These comments lead us to agree with the proposal of Loilier and Tellier (2011): the opposition between the closure and opening of the paradigm of innovation should be modified. First, because absorption capacity, which is the foundation of Chesbrough’s paradigm (2006), requires a certain measure that is specific to each actor, but also because opening is not decreed, it is the result of socialisation. And yet, whatever the methods and organisations selected, it is certain that this socialisation requires time so that independent individuals form communities, learn to know each other, and to share knowledge (Cohendet et al., 2003). In short, innovation as part of CISs means integrating another dimension into the relationship {space-innovation}, that of time. And it is a real issue for organisations that they are, for that matter, in a CIS or a cluster.

50Concerning the second theme, namely the role of actors in the collaborations, we first return to the development of individuals’ capacities to be creative and innovative. In fact, as the diffusion of knowledge is the centre of collaborations constructed as part of the CISs, this means that there is a dual process: exploiting environmental resources and developing resources that are not exploited internally, or not much exploited (Loilier et al., 2016; Suire, 2018). This implicitly requires each individual to be capable of giving and receiving. In other words, each individual has to be autonomous (from the Greek autos- “oneself” and nomos “law, rules”), namely capable of formulating her/his own rules, as well as inventing new ones if needed, in a constrained and regulated framework. This capacity is therefore based, on the one hand, on understanding this framework and, on the other hand, on the creative nature of these individuals, which proves to be crucial for the dynamic capacities of organisations.

51Indeed, according to Teece et al. (1997) and Teece (2007), these dynamic capacities help to integrate, construct and reconfigure knowledge and resources with a view to a proven organisational agility. And yet this agility includes, amongst others, internal and external cooperation, particularly in order to increase the variety of sources of ideas, and therefore benefit from relational rents, namely a higher profit obtained from the very fact of interactions between organisations, and inaccessible in isolation (Dyer, Singh, 1998). Yet we should not forget that it is individuals who help to energise relations between the organisations, and to increase the capacity of their organisation to innovate and to have new ideas. To achieve this, some organisations have implemented particular modes of management such as empowerment or management based on trust, creativity tools such as design thinking, or crowdsourcing digital platforms, or organisational configurations that favour creativity and innovation. The challenge for organisations is, then, to imagine how to favour individual autonomy. And for this, the management practices that are present in CISs may inspire them.

52One final issue relates to the question of the appropriation of the value of innovation. Because considering that knowledge is circulated amongst actors, that they share and nurture each other (Brocat, Coriat, 2015) no longer requires approaching innovation solely in terms of exclusivity. Organisations should, then, modify their relationship with intellectual protection. And this is not easy (Ocalan-Ozel, Pénin, 2016). If some communities, such as “open” communities (Brocat, Coriat, 2015) or, to a certain extent, the community of scientists that share scientific knowledge because of the non-rivalry nature of this information, have already started a reflection on this subject, currently the work to support actors in these collaborations in such an approach to knowledge remains immense, whether they are self-employed, start-uppers, VSBs, but also large firms involved in a cluster. Indeed, if the issues posed by the emergence of the new model of the relationship {space-innovation} concern organisations integrated in the CISs, they also question the clusters. This leads some, for example, to look into new concepts such as that of innovation ecosystems (Guilhon, 2017).