Knowledge, capabilities and manufacturing innovation: a US-Europe comparison

In this paper we report a comparative analysis of the factors which contribute to the innovation performance of manufacturing firms in the US state of Georgia, and three European regions, the UK regions of Wales and the West Midlands, and the Spanish region of Catalonia. We consider the factors which shape firms’ ability to generate new products and processes and undertake various forms of organisational and structural change. We are particularly concerned with how firms collect the knowledge on which they base their innovation and their effectiveness in translating that knowledge into new innovations. Three main empirical conclusions result. First, US firms have more widespread links to external knowledge sources than those in Europe and notably the universities make a greater contribution to innovation in the US than in Europe. Second, UK firms prove more effective at capturing synergies between their innovation activities than US and Catalan firms. Third, firms’ operating environment proves more conducive to innovation in the US than in either the UK regions or Catalonia. Our results suggest the potential for mutual learning. For the UK there are lessons in terms of the way in which the universities in Georgia are supporting innovation. For firms in Georgia and in Catalonia the potential lessons are more strategic or organisational and relate to how they can better capture potential synergies between their innovation activities.