Knowledge intensive Industrial Clustering around Océ; Embedding a vertical disintegrating

This case study provides insight into how a particular transformation of the innovation process affects individual companies and the regional Mechatronics system as a whole in the Eindhoven-Venlo region (The Netherlands). The transformation involves out-sourcing engineering activities by Océ, one of the major high-tech companies in the region. Océ wanted to upgrade regional suppliers from jobbers into main-suppliers so that most of the engineering could be done by suppliers while Océ played the role of system integrator. Local suppliers saw an opportunity to reduce the extent of (production) cost competition by increasing their own innovative competences. Under the Knowledge-intensive Industrial Clustering (KIC) policy programme the collective goal is to build up internal knowledge resources and increase the use of external knowledge resources in the local area. The case study shows that the change in allocation between internal and external knowledge resources is not an easy (costless) change. The restructuring of a codification process requires intensive communicative interaction between heterogeneous knowledge resources and this is favoured by proximity.