2011 Proceedings of PICMET '11: Technology Management In The Energy-Smart World (PICMET)

Cluster-Based Regional Innovation System: Theoretical Extension and Case Study of

Zhou Yisha, Jin Chen, Si Yaqi School of Management, University, ,

Abstract--Innovation is not an isolated activity for enterprises. various local networks of small firms with a local base and On the contrary, a mass of information exchange with the strong export orientation. external world is required. That’s why enterprise and the According to Belussi, in fashion-led or engineering-based environment it involved should be considered as a system. Due industry-characterized by the presence of practical to inherent characters, industrial cluster creates good conditions knowledge-the development of a competitive regional system for innovation and can be a special innovation system. In China, most industrial clusters lie in the middle section of is the result of a pre-existing industrial cluster [2]. Based on the value chain, while sections of high margin are in the hands of the textile industrial cluster, Shaoxing developed its regional others, i.e., R&D and marketing. Therefore, improving the innovation system after several decades’ effort. industrial added value has been put on the agenda. The paper proceeds as follows: Section 2 focuses on the Based on the case of a Chinese city, Shaoxing, this paper theoretical and empirical background and introduces the discusses its textile industrial cluster, which has become one of research industrial districts. Section 3 analyses the industrial the key driving forces supporting the rising economy. Our study cluster based RIS in Shaoxing, while Section 4 proposes shows that building the regional innovation system based on some concluding remarks and hints for further research. industrial clusters in Shaoxing is a great choice to improve innovation competitiveness. As the industry is one pillar of II. LITERATURE REVIEW China’s economy, it’s important to study this trend for further growth of the industry. A. Regional Innovation System In the 1990s, the concept of regional innovation systems I. INTRODUCTION (RIS) has been become increasingly popular among

Shaoxing, China Textile Production Base, boasts one of economic geographers, regional studies scholars, and regional the largest marketplaces in China. China Textile City in development policy makers [3, 4, 5-10]. The popularity of Keqiao is now Asia’s largest textile trading place, with its this concept reflects the importance attached to the role of trade volume accounting 1/3 of the nation’s aggregate. learning and social milieu in social development and Textile industry is the pillar industry of Shaoxing economic growth. The approach is popular in part because it County’s economy. In 2002, the output value of the textile provides a narrative on the intangible dimension of local industry amounted to 53.1 billion RMB, accounting for 75% economic development and the processes of knowledge of the county’s economic aggregate. After 20 years' reform circulation and learning at the more manageable regional and opening-up, Shaoxing, now has basically formed a scale. Another, more simple rationale for the widespread complete industrial chain composed of textile raw materials, adoption of this approach may be that, from a policy spinning, weaving, dyeing, textile and garment industry. perspective, it is easier to manage economic policy at a Around the main value chain, Shaoxing has developed textile regional rather than a global scale. machinery, dyes auxiliaries, textile technical services and The concept of regional innovation systems has no other supporting industries. These actors and interactions generally accepted definitions, although it is typically between them constitute a complete collaboration supporting understood to be a set of interacting private and public system for the development of textile industry. The area interests, formal institutions, and other organizations that composed of these actors naturally is formed a considerable function according to organizational and institutional size and characteristics of local textile industry cluster. arrangements and relationships conducive to the generation, Of course, there is more than one textile cluster in China, use, and dissemination of knowledge [11]. The basic for instance, women’s wear in Hangzhou, men’s wear in argument is that such a set of actors produces pervasive and , socks in (plus Shaoxing, all in Zhejiang systemic effects that encourage firms within the region to Province). According to China National Textile Industry develop specific forms of capital that are derived from social Council (CNTIC), there are now 19 such township industrial relations, norms, values, and interactions within the clusters of textiles, which altogether have a total output of community in order to reinforce regional innovative RMB238 billion (nearly US$30 billion), accounting for about capability and competitiveness [12]. one quarter of the total textile output of the country. About The notion of RIS lies on the crossroads of two main 1.81 million workers are employed in these clusters [1]. bodies of literature (Fig.1): evolutionary theories of economic Industrial cluster of textile in Shaoxing is not in high-tech and technical change, which conceptualize innovation as the sectors related to R&D core; however, it is represented by result of complex, non-linear social processes, stimulated and nurtured by Several actors and factors within and outside the

1591 2011 Proceedings of PICMET '11: Technology Management In The Energy-Smart World (PICMET)

firm [13]. In contrast to neoclassical theory, which posits the forms of adaptation, learning, and innovation [24, 25]. As firm as a homogenous, atomistic unit of rational utility Malmberg and Maskell [26] pointed out, “In such maximization, in evolutionary economics the firm is environment, chances are greater that an individual firm will differentiated, making use of heterogeneous inputs, and learns get in touch with actors that have developed or been early through the double feedback loop of assessing its own adapters of new technology. The flow of industry-related experience and the experience of peers. The process of information and knowledge is generally more abundant, to innovation becomes systematic as it develops within clusters the advantage of all firms involved”. According to these of inter-firm relationships. Another one is theories of authors, the general argument is that a local industrial regionalization and clustering, which emphasize that structure with many firms competing in the same industry or economic growth and innovation do not take place in abstract collaborating across related industries tends to trigger spaces, but are locally rooted, thanks to the advantages of processes that create not only general dynamism and spatial proximity, social embeddedness, interaction with local flexibility but also learning and innovation. institutions, and knowledge spillovers [14-19]. C. A model of network for cluster-based Regional Innovation B. Relationship between RIS and Clusters System As regards the evolution of RISs, recent analyses have Actors involved in cluster-based regional innovation elucidated the complex relationship that exists between the system can be generalized to five main bodies: enterprises, building of a coherent innovation system and the evolution of R&D institutions, educational organizations, intermediary innovative local clusters. The undergoing hypothesis is that in and government. Innovation is the outcome of actors’ fashion-led or engineering-based industry -characterized by connection and interaction with each other, and innovation the presence of practical knowledge-the development of a performance depends largely on the openness of enterprises competitive regional system is the result of a pre-existing with suppliers, sub-contractors, and service firms. industrial cluster [2], while in science-based industry-where As for the enterprises embedded in the network, crossing the role of scientific/analytical knowledge [20] is extremely the boundaries and cooperating with external actors (R&D important-the presence of leading research institutions (and institutions and educational organizations) is an opportunity research funds) represents the sine-qua-non precondition to multiply the learning occasions, mostly in knowledge [21]. intensive sectors [27]. These industries have witnessed the Innovation occurs more easily in situations of geographic wide spread diffusion of distributed forms of innovation concentration and proximity, which means regional clusters driven by the necessity to integrate specialized and play a crucial role in such processes. A regional cluster is complementary knowledge [28]. Recent studies on defined as a “group of firms in the same industry, or in modularity and system integration [29, 30] have pointed out closely related industries that are in close geographical that increasing modularization of complex products has proximity to each other is meant to include geographically favored firms’ R&D disintegration and knowledge concentrated industries included so-called ‘industrial specialization although raising the need and complexity of districts’” [22]. Clusters can include governmental and inter-organizational coordination. educational institutions and support services, with cluster External sources which are rooted in the capability to boundaries defined by linkages and complementarities across enrich the firm knowledge with a network of interactions institutions and industries [23]. Clusters have in common including external partners (suppliers, customers, research specialization, proximity, and cooperation that lead to and market institutes) can make the knowledge flow easier, as spillovers and synergies within a regional innovation system. well as facilitate the diffusion of new technology (Fig.2 The Innovation activities benefit from a concentration of model of network for cluster-based Regional Innovation economic activities by similar and related firms in a cluster, System). which facilitate knowledge spillovers and stimulate various

Regional Innovation System ‐The region as a locus of innovation

Systems of Innovation Regional Science ‐Based on evolutionary theories of economic and ‐Geographical concentration technical change

Fig.1 The notion of RIS lies on two main bodies of literature

1592 2011 Proceedings of PICMET '11: Technology Management In The Energy-Smart World (PICMET)

Enterprises

Knowledge Flow R&D Institutions Technology Diffusion Educational Organizations

Government Intermediary

Fig.2 Model of network for cluster-based Regional Innovation System

III. CASE OF SHAOXING The third is trading markets facilitate the boom of economy. There are 357 commodity trading markets in the A. Overview of Shaoxing whole city, and trading value hit $12.1 billion in 2003, Shaoxing is located in central-northern part of Zhejiang, including 13 markets’ annual sales exceeding $151.9 million and between Hangzhou and Ningbo. Shaoxing occupies an per trading market. China Textile Market is the nationwide area of 8,256 square kilometers and has a population of biggest textile products market with annual trading value of 4,340,000. Shaoxing is one of National Famous Historic and $3.73 billion. Cultural Cities of the first group, and Shaoxing County was a The fourth is the prosperity of industrial clusters. center of politics, culture and economy in southern China Shaoxing has formed 35 clusters of certain sectors, such as from the Qin and Han dynasties up to the Ming and Qing textile, printing and dyeing industries of Shaoxing County; dynasties. Shaoxing breeds outstanding people over centuries, socks, shirt, pearl, hardware industries of City; like Premier Zhou Enlai, great writer Lu Xun, etc. Because of umbrella, chemical, mechanical and electrical industries of its long history and profound culture, Shaoxing develops its Shangyu City; necktie industry of City; medicine own commercial culture of dedication and continuous and axletree industries of Xinchang County and furniture improvement. The economic dynamism in the region has industry of . continuously produced highly profitable entrepreneurial firms Shaoxing has been developing education for a long time. especially in manufacture industry, with 297 firms’ sales After the founding of New China, particularly since economy revenue exceeding 100 million, 33 firms exceeding 1 billion reform and opening door policy, education and research in and 1 firm exceeding 10 billion in 2008. Shaoxing has a great improvement. Now there are 5 colleges Shaoxing is a place full of vitality in economic and universities, 36 secondary vocational schools and 41 high development. Shaoxing generated a gross product of $16.5 schools in Shaoxing, and 1.5 million college and university billion in 2003, an increase of 15% over the previous year. graduates can be provided to the society each year. Shaoxing Shaoxing economic aggregate was the 29th among national has mature infrastructure with fitting natural and humanistic big and intermediary-sized and gross financial income environment, and built Shaoxing Economic Development reached $1.63 billion, rose by 26.3%. The total amount of Zone, Paojiang New Park, Shaoxing Ecological Park, social consumable retail reached $4.4 billion, increased by Shaoxing County Binhai Industrial Zone, Hangzhou Bay Fine 12.6%, with $1013.8 per person. Chemical Zone in Shangyu, Xinchang Hi-Tech Industrial Park, etc. There are four main features leading Shaoxing’s economy: The first superiority is private economy. Private economy B. Cluster-based Regional Innovation System in Shaoxing accounts for about 95% of Shaoxing's economy. Textile industry is the pillar industry of Shaoxing. The second is manufacturing industry, which accounts for Shaoxing, now has basically formed a complete industrial 60% of Shaoxing's economy, developing pretty well. chain composed of textile raw materials, spinning, weaving, Particularly, the light textile industry accounts for more than dyeing, textile and garment industry. Around the main chain, half industrial aggregate. In 2003, textile enterprises reached Shaoxing has developed textile machinery, dyes auxiliaries, the sales income of $13.8 billion, with $0.68 billion profit, textile technical services and other supporting industries, the which occupied 7% and 12% of the national textile industry whole value chain in textiles (Fig.3 Value Chain in Textiles) respectively. has developed maturely in Shaoxing.

1593 2011 Proceedings of PICMET '11: Technology Management In The Energy-Smart World (PICMET)

Fig.3 Value Chain in Textiles1

Based on the model proposed in the second section, we machinery and other relevant industries. Thanks to the value describe the picture of Shaoxing’s RIS from four perspectives: chain, the enterprises with various types and scale are linked enterprises, universities and R&D institutions, government, together and pave the way to develop regional innovation and intermediary. 1 system.

Enterprises Universities and R&D Institutions Enterprises in cluster are the main actor creating value and The actor engaged in the research activities of textile driving force for the boom of region. For the past few years, industrial cluster is mainly the R&D department in Shaoxing textile industry has been developing rapidly, and large-scaled enterprises, Such as Yuhua Textile Institute made remarkable achievements. According to statistics, in attached to Zhejiang Yuhua Holding Group Co. Ltd., the 2007 there are totally 2405 enterprises in Shaoxing textile subsidiaries of Hengmei Group Co. Ltd. Shaoxing Light industrial cluster, including 684 enterprises above designated Textile Technology Center. Moreover, most collaboration size, which account for 61% of the total enterprises above research institutions are universities and research institutes designated size in the county. The cluster employs 150,000 out of the cluster through university-industry cooperation persons, occupying 48% of the county's total employees. In projects, talent communication, joint research center, and 2007, the cluster’s gross industrial output reached $144.9 technical achievements trading to access knowledge and billion, with $11.5 billion of tax amount. innovation from the outside. With the support of industrial cluster, Shaoxing has For instance, Tianma Group Co. Ltd. cooperated with become the most important textile manufacturing base in Zhejiang University exploiting computer automatically pulp China, with 15% of the national total chemical fabrics, and controlling system, filling a technical gap in China. Jingong about a fifth of the national total shuttleless looms. Science & Technology Co., Ltd. has solid There are many large-scaled manufacturing enterprises in “university-industry” collaboration with domestic famous Shaoxing textile industrial cluster, such as Zhejiang universities, like Tongji University, Donghua University and Yuandong Chemical Fiber Group, Busen Group Co., LTD., Zhejiang University, as well as research institutions like whose products are not only sold in China, but also exported Beijing Machine Tool Institute, and sets up Huaneng to Asian countries, Europe and America, sharing a good Electromechanical Institute of Beijing Institute of Technology. reputation of trademarks. What’s more, lots of small firms Up to 2003, the number of various technology development can also find their space in cluster, which boost the centers has reached 131 in Shaoxing County including 91 innovation in region to a great extent. These enterprises with research centers in enterprises. Enterprises, universities, innovation capabilities are spread over the whole value chain research labs through university-industry cooperation of textile industry, from chemical fiber, weaving, printing, to combine the nodes in the whole technology innovation dyeing and garment, as well as textile services, textile networks together, integrating the national technology into cluster-based RIS of Shaoxing.

1 In the closed regional innovation system, small firms, Source: http://www.fibre2fashion.com/industry-article/9/895/indias-textile-wet-proce which clearly are not able to afford large investments in R&D, ssing6.asp

1594 2011 Proceedings of PICMET '11: Technology Management In The Energy-Smart World (PICMET)

are at a disadvantage. These types of firms cannot be innovation culture. innovative only counting on internal knowledge, but they What’s more, government builds public infrastructure, have to build fruitful relationships with other organizations, including education, information, and transport infrastructure. in a network perspective. Firm size in the emergent open Shaoxing County’s public finance invested $182.3 million in regional innovation system is no more an obstacle or unique the constructing of research building and facilities for driver to increase innovative productivity [33]. Relational and "Zhejiang Modern Textile Technology and Equipment coordination capabilities of firms and research labs allow the Innovation Service Platform". Furthermore, local government establishment of a positive spiral of learning at the supported Zhejiang China Light Textile Industrial City Group boundaries [34], which appear to be the crucial variable to Co. Ltd. to vigorously promote the construction of look at when determining the degree of innovativeness [35, professional electronic service platform for market, and 36, 37, 38]. provided the information service over 6000 booths, the sum Crossing the boundaries of the firm and cooperating with of trading through the service platform amounted to $455.7 external actors (research labs or institutions) is an opportunity million, can save more than $303,808.2 for one booth to multiply the learning occasions (Baba et al., 2009). The annually. textile industry have witnessed the wide spread diffusion of distributed forms of innovation driven by the necessity to Intermediary integrate specialised and complementary knowledge. Intermediary in cluster-based RIS mainly refers to the In the regional innovation system, the cooperation services units of technology convert, finance, logistics and so between universities, research labs or institutions and SME is on. Business incubate refers to Productivity Promotion Center, mainly based at exchange of material resources, human and Innovation Park. Industry associations, lawyers’ and resources and technical resources. Universities and research accountants’ office, logistics center and education training labs or institutions provide human resources and technical center, etc., these intermediaries become auxiliary system for resources for SME, as well as conduct joint research, while cluster-based RIS, supplying knowledge, information and SME provide material resources and innovation convert. talents, and play a coordination role. For example, in order to solve the problem of SME’s design capabilities, there are Government several technology intermediary agencies specialized in Government plays a positive thrusting and guiding role in fabrics analysis, design, plate-making services, forming the the formation and development of regional innovation system. bridge of SME and research labs. Because of political system, government in China has more power, through its guiding, motivation, protection and C. Existing problems in RIS of Shaoxing coordination government can greatly affect enterprises’ Most enterprises in Shaoxing RIS pursue "cost leadership” innovation process. strategy, and dare not invest in long-term innovation projects. To construct a favorable market environment, government Lacking the input of technology innovation, enterprises with makes relevant laws, regulations, policies and standards. low innovation competencies cannot learn and absorb These not only protect the enterprises from unfair high-class R&D knowledge. This makes enterprises’ profit competitions, but also encourage enterprises’ innovation. For remain the same or even declined while export sales rise. At example, aiming at the challenges of fast changing both at the same time, according to the rise of labor cost in China, the home and abroad the textile industry faced, government original competencies of textile industry is losing constantly. organized series of activities to improve products’ quality, The primary learning mechanism of enterprises in RIS is expand market volume and increase the enterprises’ imitation, and improvement of products’ quality mainly efficiency. depends on the update of fixed assets, with low R&D Meanwhile, to promoting the construction of regional expenditure. Enterprises do not turn into the investment innovation system, local government signs long-term subject of technology innovation, and this causes low cooperative agreement with external universities and research innovation competencies. RIS’s innovation capabilities are labs to help SME in RIS multiply the learning occasions and relatively weak. Besides, although enterprises establish distribute to innovation. internal research and development institutions, the scale is Government sets up innovation funds and reward to small, and the quality of staff is not high, these lead to the encourage innovation activities. Every year, local government weak R&D ability. specifically allocates $22.8 to $30.4 million to support the Although in recent years the number of patents granted by implement of Textile Fabrics Innovation Project. Start-up Shaoxing is raising sharply, inventive patents account for few companies can benefit from this capital supporting and of them, the proportion of inventive patents is low (Fig.4 survive its hard beginning. It is conducive to the fostering of Patent situation in Shaoxing).

1595 2011 Proceedings of PICMET '11: Technology Management In The Energy-Smart World (PICMET)

16000 6.00% 14103 14000 5.12% 5.00%

12000 Number of patent 4.00% application 10000 Number of patent granted 8000 2.86% 3.00% Number of inventive 6548 patent granted 6000 2.27% 5163 2.00% Proportion of inventive patent 4000 1.29% 3068 2585 1.00% 2000 957 377 3094 49 74 117 0 0.00% 1999 2005 2006 2007

Fig.4 Patent situation in Shaoxing2

The other problem is that the collective efficiency of in Europe and the US: the New Agenda. Ashgate, Aldershot, pp. Shaoxing textile industry is still low. Within a cluster, 233–252. [3] Wolfe D. Clusters old and new: the transition to a knowledge economy competitions far outweigh the cooperation between in Canada’s regions. Kingston, Ontario: Queen’s School of Policy enterprises. This greatly affects the competitiveness of Studies; 2003. 2 India's textile wet processing - Quo Vadis? Shaoxing RIS. 2 [4] Asheim B, Isaksen A. Location, agglomeration and innovation: toward regional innovation systems in Norway? Eur Planning Stud 1997; 5(3):299–330 IV CONCLUSION [5] Doloreux D. Regional innovation systems in Canada: a comparative study. Reg Stud 2004; 38(5):479–92. On the basis of previous studies, this paper has a review [6] Asheim B, Isaksen A, Nauwelaers C, To¨tdling F. Regional innovation on theories of regional innovation system, and discusses the policy for small-medium enterprises. Cheltenham, UK and Lyme, CT: Edward Elgar; 2003. relationship between RIS and regional cluster. A model of [7] Asheim B, Isaksen A. Regional innovation systems: the integration of network is proposed to analyze the cluster-based RIS of local ‘sticky’ and global ‘ubiquitous’ knowledge. J Technol Transfer Shaoxing. The empirical factors taken into account include 2002; 27:77–86. the role of enterprises, the role of local government, the [8] Acs ZA. Regional Innovation, Knowledge and Global Change. London: Pinter; 2000. development of supporting intermediary, and the research [9] Braczyk HJ, Cooke P, Heidenreich M, editors. Regional innovation labs. During the past three decades in the process of systems: the role of governance in a globalized world. London: UCL development, the cluster has grown rapidly. Many of the Press; 1998. enterprises in Shaoxing RIS export fabrics to the international [10] De la Mothe J, Paquet G, editors. Local and regional systems of innovation. Kluwer: Amsterdam; 1998. market. While most of the enterprises started as a family [11] Doloreux D. Regional innovation systems in the periphery: the case of business, now many of them are managed professionally and the Beauce in Que´bec (Canada). Int J Innovation Manage 2003; cooperate with famous universities in China. Many of them 7(1):67–94. have well-established systems and met with international [12] Gertler MS. Tacit knowledge and the economic geography of context, or the undefinable tacitness of being (there). J Econ Geogr 2003; compliance standards and requirements, like ISO900 3(1):75–99. certifications. But there also some problems in Shaoxing RIS, [13] Edquist, C., 2005. Systems of innovation. perspectives and challenges. the main two are enterprises’ weak R&D capabilities and low In: Fagerberg, J., Mowery, D., Nelson, R. (Eds.), The Oxford collective efficiency of cluster. Handbook of Innovation. Oxford University Press, Oxford, pp. 181–208. [14] Camagni, R., 1991. Local ‘milieu’, uncertainty and innovation REFERENCES networks: towards a new dynamic theory of economic space. In: Camagni, R. (Ed.), Innovation Networks: Spatial Perspectives. [1] China National Textile Industry Council, 2003 Belhaven Press, London, pp. 121–144. [2] Belussi, F., 2002. The Italian system of innovation: the gradual [15] Cooke, P., 2002. Knowledge Economies. Clusters, Learning and transition from a weak mission-oriented system to a regionalised Cooperative Advantage. Routledge, London. learning system. In:Borras, S., Biegelbauer,P.(Eds.), Innovation Policies [16] Maskell, P., Malmberg, A., 1999. Localised learning and industrial competitiveness. Cambridge Journal of Economics 23, 167–185. [17] Porter, M., 1998. On Competition. Harvard Business School Press, 2 Data Source: Shaoxing Statistical Yearbook Boston.

1596 2011 Proceedings of PICMET '11: Technology Management In The Energy-Smart World (PICMET)

[18] Storper, M., 1997. The Regional World. The Guilford Press, New York. Advances in Economic Strategy Research. Oxford University Press, [19] Belussi, F., Sedita, S.R., 2009. Life cycle vs. multiple path dependency Oxford, pp. 209–231. in industrial districts. European Planning Studies 17 (4), 505–528. [29] Brusoni, S., Prencipe, A., 2001. Unpacking the black box of modularity: [20] Cooke, P., 2005. The asymmetric knowledge problem, regional technologies, products and organizations. Industrial and Corporate innovation and geographical knowledge systems industry organization. Change 10, 179–205. Paper Presented at the Druid Conference “Dynamics of Industry and [30] Hobday, M., Davies, A., Prencipe, A., 2005. Systems integration: a core Innovation: Organizations, Networks and Systems”, 27th–29th June. capability of the modern corporation. Industrial and Corporate Change [21] Asheim, B.T., Coenen, L., 2006. The role of regional innovation 14 (6), 1109–1143. systems in a globalizing economy: comparing knowledge bases and [31] Brief Introduction of Shaoxing http://www.sx.gov.cn/20050328000027/ institutional frameworks of Nordic clusters. In: Vertova, G. (Ed.), The [32] David T. Parkes, India's textile wet processing - Quo Vadis? Changing Economic Geography of Globalization. Routledge, New http://www.fibre2fashion.com/industry-article/9/895/indias-textile-wet- York, pp. 148–165. processing6.asp [22] Enright M. Regional cluster and firm strategy. In: Chandler AD, [33] Belussi, F., Gottardi, G., 2000. Model of localised technological change. So¨lvell O¨ , Hagstro¨m P, editors. The dynamic firm: the role of In: Belussi, F., Gottardi, G. (Eds.), Evolutionary Patterns of Local technology strategy, organization and regions. Oxford: Oxford Industrial Systems. Ashgate, Aldershot, pp. 115–129. University Press; 1998. [34] Belussi, F., Sedita, S.R., Pilotti, L., 2008. Learning at the boundaries [23] Porter M. Clusters and the new economics of competition. Harvard Bus for industrial districts between exploitation of local resources and Rev 1998; 77–90. exploration of global knowledge flows. In: Leoncini, R., Montresor, S. [24] Feldmann MP. An examination of the geography of innovation. Ind (Eds.), Dynamic Capabilities between Firm Organization and Local Corp Change 1994; 2: 312–33. Systems of Production. Routledge, London, pp. 181–215. [25] Malmberg A. Industrial geography: location and learning. Prog Hum [35] Boari, C., Lipparini, C., 1999. Networks within industrial districts: Geogr 1997; 21(4): 553–8. organising knowledge creation and transfer by means of moderate [26] Malmberg A, Maskell P. The elusive concept of localization economies: hierarchies. Journal of Management Governance 3, 339–360. towards a knowledge-based theory of spatial clustering. Environ [36] Lipparini, A., Sobrero, M., 1994. The glue and the pieces: Planning 2002; 34: 429–49. entrepreneurship and innovation in small-firm networks. Journal of [27] Baba, Y., Shichijo, N., Sedita, S.R., 2009.Howdo collaborations with Business Venturing 2, 125–140. universities affect firms’ innovative performance? The role of “Pasteur [37] Lorenzoni, G., Lipparini, A., 1999. The leveraging of interfirm Scientists” in the advanced materials field. Research Policy 38 (5), relationships as a distinctive organizational capability: a longitudinal 756–764. study. Strategic Management Journal 20, 317–338. [28] Coombs, R., Metcalfe, J.S., 2000. Organising for innovation: [38] Giuliani, E., 2007. The selective nature of knowledge network in co-ordinating distributed innovation capabilities. In: Foss, N.J., clusters: evidence from the wine industry. Journal of Economic Mahnke, V. (Eds.), Competence, Governance and Entrepreneurship: Geography 7, 139–168. [39] China Statistics Press, Shaoxing Statistical Yearbook 1999-2007

1597