Collaboration, Proximity, and Innovation

Collaboration as a means to enabling and nourishing innovation is an important theme in the extant literature, which posits that face-to-face interactions lubricate the knowledge flow between actors, and that clusters of complementary knowledge assets provide the necessary infrastructure for this process. What happens to firms that are located outside of urban agglomerations or in peripheral regions? Are they less innovative, or can information and communication technologies (ICT) serve as a proxy for face-to-face collaboration? Theory is polarized in terms of the role that ICT may play in collaborative transactions. For example, network theory explains that weak ties are important in terms of refreshing a firm's innovation capacity by forcing it to include ideas from the periphery. Others argue that ICT cannot supplant face-to-face interaction since it is not an efficient medium for transferring tacit knowledge. This chapter uses data from the Statistics Canada 2003 Survey of Innovation to investigate empirically the relationship between firm location, innovativeness, and the extent of local and more distant collaboration.