The dynamics of proximity in multiple-party innovation processes

Proximity – that is, the closeness of parties – has been increasingly emphasized in studies on innovation networks. The idea of closeness has been discussed in relation to geographic proximity, and has also been referred to as knowledge overlaps and shared understandings between parties. In most of the studies dealing with proximity in relation to innovation networks, a static analysis is pursued. Such an analysis marks how the closeness or distance, often with the conclusion that parties should not be too close or too distant, is measured against innovation outcome at a specific point in time. However, innovation processes would include how parties increasingly converge in their knowledge and understanding, and how they may co-locate their businesses. The purpose of this paper is to discuss proximity in relation to multiple-party innovation processes and their development over time.

The empirical part of this paper consists of a single case study on an innovation community and its development process. The development of the innovation community over time, whether and how geographic, knowledge and cognitive proximity is affected, and the outcome in terms of number of innovations, their newness (incremental or radical innovation), and variety are discussed in the paper.

Findings indicate how geographic proximity leads to more knowledge overlaps, while it is not a prerequisite for it. Rather, it is in the commitment processes partly connected to cognitive proximity that knowledge increasingly converges, indifferent to the co-location of parties. The speed of such processes, however, is higher if parties co-locate. The commitment processes lead to an increased number of innovations, while these innovations become more and more similar. To avoid increased overlaps of knowledge and thereby maintain the production of a variety of innovations, interaction needs to occur through the introduction of new parties and the termination of previous interaction patterns. This, however, occurs at the cost of commitment, and the knowledge thereby becomes less developed and used in its capacities.

The paper contributes to previous research through discussing proximity in innovation networks in a processual manner. The link between various proximities and their effect on innovation outcome sheds light on how proximity, as discussed in various literature streams, often relates to similar issues that converge around the issue of commitment.