«Relations at Work» in a Modern Industrial District: A Pathway to Innovation

In this paper, we focus on how firms’ propensity to innovate in industrial districts is related to the knowledge dynamics entailed by their relational assets. We integrate the well-established knowledge-based theory and the open innovation literature with consideration of the so-called «knowledge relations spiral». How knowledge is created, transferred and diffused in an industrial district and how new knowledge and innovations are generated in the process are widely explored issues, we propose however an operational approach to the key concepts in the relevant literature and we test them on a case district: the Apulian Clothing Industrial District for the year 2012. To this end, we consider a multi-stage econometric model, based on a system of simultaneous equations spanning across 1) the influence of firms’ relational choices on district innovative performance and 2) the influence of district firms’ innovative effort and structural characteristics on their relational choices. Data are derived by administering a questionnaire to a selected sample of district firms. The results support the presence of a «knowledge relations spiral» at work within the district, generating a continuous exchange of tacit and codified knowledge both within and outside it. In this way an innovation process is created. Finally, the analysis suggests a more proactive role of the institutions to favor the reproduction of the industrial district over time