ANALES | ASOCIACION ARGENTINA DE ECONOMIA POLITICA LI Reunión Anual Noviembre de 2016 ISSN 1852-0022 ISBN 978-987-28590-4-6 Local Innovation System: Interactions and Innovation Efforts in the Olive Sector in La Rioja - Argentina. Starobinsky, Gabriela Navarrete, José “Local Innovation System: Interactions and Innovation Efforts in the Olive Sector in La Rioja - Argentina” Starobinsky Gabriela ψ * Navarrete José Luis φ ** ψ National University of Chilecito, Department of Social and Legal Sciences * E-mail address: [email protected] / [email protected] φ National University of Chilecito, Department of Social and Legal Sciences ** E-mail address: [email protected] Abstract The present research studies the role of firms’ interactions within the Local Innovation System (LIS) in relation to their innovation efforts for the olive sector in La Rioja, Argentina. Empirical analysis is based on information gained from a survey conducted by the National University of Chilecito in 2012. Quasi-Poisson and Binomial Logistic regressions are built in order to deal with statistical data. The main findings states that the more interactions firms establish, the more technological efforts they make, as well as the relevance of relationships with S&T organizations. However, heterogeneity amongst firms and LIS weaknesses would limit smaller firms’ performance. Key words: Innovation Efforts, Interactions, Local Innovation System, Olive Sector JEL Classification: D21, O18, O30, R19 Resumen La presente investigación aborda el rol de las interacciones de las firmas en el Sistema Local de Innovación (SLI) sobre sus esfuerzos innovativos para el sector olivícola de La Rioja, Argentina. El análisis empírico se efectúa en base a una encuesta conducida por la Universidad Nacional de Chilecito en 2012, para cuyo procesamiento se construyen regresiones Quasi-Poisson y Logit Binomial. Los resultados muestran que mayor cantidad de interacciones, en particular con organismos de ciencia y tecnología, promueven mayores esfuerzos tecnológicos. Sin embargo, la heterogeneidad entre las firmas y las debilidades del SLI limitan el desempeño de aquellas de menor tamaño. Palabras Clave: Esfuerzos Innovativos, Interacciones, Sistema Local de Innovación, Sector Olivícola Clasifiación JEL: D21, O18, O30, R19 Table of Contents I. Introduction ................................................................................................................. - 3 - II. Background and Theoretical Framework ................................................................ - 4 - a. Systemic Innovation Approach ......................................................................................... - 4 - b. Territorial Dimension of Innovation: Local System & Firm’s Interaction ...................... - 5 - c. Empirical Evidence: the Role of LIS and Interactions over Innovative Performance. - 8 - d. Local Innovation Systems in Latin America and Argentina ........................................... - 9 - III. Case Study ................................................................................................................ - 13 - a. Argentina in the Global Olive Market ............................................................................. - 13 - b. Olive Sector in La Rioja Province ................................................................................... - 14 - IV. Methodological Approach ....................................................................................... - 17 - a. Olive Firms’ Characterization .......................................................................................... - 18 - b. Qualitative Response Models ......................................................................................... - 27 - c. Variables Definition ........................................................................................................... - 30 - d. Econometric Results ........................................................................................................ - 32 - V. Final Discussion ....................................................................................................... - 37 - VI. Conclusion................................................................................................................. - 39 - VII. Bibliographic References ........................................................................................ - 41 - - 2 - I. Introduction Under the new techno-economic paradigm called the “Knowledge Economy”, levels of productivity and competitiveness reached by firms, regions and countries, are strongly related to the technological capacities and efforts needed to achieve innovations. However, less developed regions face specific conditions and obstacles in order to perform those processes. In this sense, the general purpose of the investigation is to contribute to the understanding of local innovation processes in developing regions, where heterogeneous actors coexist and small firms are preponderant. In particular, the present research studies the specificities of innovative processes in the olive sector of La Rioja province, Argentina. According to the evolutionary school of thought, the Local Innovation Systems (LIS) conceptual frame is suitable to inquire about the distinctive features that those processes assume in particular regions. This theoretical approach includes the study of all actors and factors involved in the development, diffusion, use and commercialization of innovations, emphasizing the relations that take place amongst them and their interactive nature. As a consequence, cooperative relationships between firms and other LIS actors are essential to motivate technological behaviours. Thus, the main objective of this research is to analyse the role of firms’ interaction within the Local Innovation System as to their technological behaviour for the olive sector in La Rioja province. Specifically, linkages between firms and scientific institutions allow information and knowledge to flow and technology and know-how to be transferred, stimulate spillovers, and reduce uncertainty. In addition, it is important to identify the intensity of connections, their frequency and number of contacts with the organizations involved and the type of links they maintain. Therefore several background researches present studies of innovative processes in specific regions under a systemic, interactive and territorial approach, such as Camagni and Capello (1997), Asheim and Coenen (2005), Intarakumnerd and Vang (2006), Hassink (2002), Lavía et al. (2011), Fritsch and Franke (2004), Tödtling et al. (2008), amongst others that are presented afterwards. Although developing regions have the possibility to import and imitate available external knowledge and technologies, it is not a trivial process. It requires a set of abilities and competences in order to select, absorb, improve and adapt technologies to local conditions. Therefore, in less developed systems, interactions between firms and science and technology institutions are crucial to develop technological capacity, especially among smaller firms. Also a number of empirical investigations analyse the local dynamic and connections between actors for developing regions as in Jiménez et al. (2011), ALIAS (2011), De Fuentes and Ampudia (2009), and for Argentina’s localities Boscherini et al. (1998), Gennero de Rearte et al. (2006), Yoguel and Boscherini (2000), Yoguel et al. (2006), Robert (2012), Robert (2012), Robert and Yoguel (2013), Yoguel and Erbes (2007), Motta et al. (2010) and Sanchez and Bisang (2011), which have been especially taken into account in this study. Thus, the principal hypotheses that guide the research are “Firms’ interactions within the Local Innovation System motivate them to perform innovative efforts” and “Firms’ interactions within the LIS also increase the probabilities to carry out internal R&D”. The empirical analysis to test these hypotheses is based on statistical information collected through an extensive survey conducted among 91 local olive producers by the National University of Chilecito in 2012. Furthermore, the influence of firms’ characteristics and cooperation linkages on innovative activities is analysed by applying Quasi-Poisson and Binomial Logit regressions. Particularly, Quasi-Poisson regressions are implemented to deal with quantitative variables, such as the number of innovation activities, and Binomial Logistic regressions for dummy variables, whether the firm is making any R&D efforts or not. In both cases, a group of variables representing firms’ characteristics and diversity of interactions (by institutions and types) are taken into account as independent variables. Moreover, the econometric methods are - 3 - complemented with a thorough characterization of the local olive sector grounded on statistical descriptive analysis. The study is organized as follows: Section II outlines the theoretical framework and the empirical background; Section III includes a description of the case study; Section IV refers to the methodology and data sources used to contrast hypotheses; Section V presents and discusses the main results; and finally, section 6 presents the conclusions. II. Background and Theoretical Framework a. Systemic Innovation Approach The new techno-economic paradigm “the Knowledge Economy” presents a number of opportunities and challenges for developing countries. In this context, knowledge creation and its productive application are essential factors to explain different