Innovation and firm’s interaction behaviour: Is innovation associated with local or non-local interactions? An investigation of clustered micro and small technology-based firms in Brazil

The changes in the nature of the global economy in the last 30 years have increased the focus on the role of innovation directly affecting competitiveness of organizations and countries. These changes have provoked the need for new strategies to enable companies to compete with each other in a dynamic and globalized market. Academics from different disciplines such as economic geography, business management and sociology have attempted to explain the gains in competitiveness through innovation. The great majority seem to agree that innovation depends on many factors that include location and network-based environments. From the spatial perspective, previous research shows that innovation seems to be influenced by locational factors which in essence, due to geographic proximity, tend to facilitate local relational linkages impacting the firm’s innovation activities. In this context, this thesis focuses on Brazilian clustered micro and small technology-based firms and investigates the extent to which innovation is associated with local or non-local interactions. The results of this study reveal that innovation is not a solitary phenomenon restricted to the firm itself. Innovation seems to be an interactive phenomenon where geographic distance does not seem to be a problem but both local and non-local interactions are important to the development of innovation activities. In fact, the empirical evidence suggests that innovation arises in many contexts involving both local and non-local interactions. According to this study, the general level of interactivity does not seem to be determined by the geographic scope of the relational linkages, but by the quality and perception of gains or benefits of the innovation sources.