Knowledge creation and transfer in local and global technology networks: A system dynamics perspective

The innovation process of firms and regions can be conceived as an open system whose success depends on the combination of heterogeneous pieces of information and knowledge owned by actors that may be located anywhere. The literature has stressed the importance of proximity dimensions as communication resources that can be exploited by firms to interact and exchange knowledge, and thus to create international networks. In this paper, a system dynamics model is adopted to describe and formalise the complex dynamics generated by knowledge and proximity inside global networks of economic actors operating in technology industries. The model analyses the evolution of these networks, studying the relationships between knowledge and proximity dimensions. Simulations are provided in order to investigate how the proximity dimensions, namely geographical, organisational and cognitive, affect the networks' evolution. Results show that knowledge creation and transfer processes are more effective for the network evolution when actors exploit all the proximity dimensions. © 2008, Inderscience Publishers