When are recruited competences supportive of innovation? Inter-industry differences in the importance of similarity and diversity

Building on recent evolutionary thinking, this paper links the present innovation performance of Norwegian firms to their past aggregate inflows of experienced employees through the labor market. In the upper part of OECDs technology intensity classification, firms strengthen their capacity to generate novelty sales by recruiting from within their own sector domains. By contrast, this form of recruitment is negatively associated with performance in low-tech industries. Aggregate inflows from related industries is generally supportive of performance, while inflows from prior employment in the research system is not. This underscores the dependence of industrial innovation on specialized competences and work practices that originate in the domain of industry itself; and, thus, the interdependencies between firms and larger industrial agglomerations.