This workshop focused on diffusion of innovation at the regional and firm levels. While innovation is a key factor of productivity and long-term growth, the ability to innovate varies across regions and organisations and depends on the capacity to absorb external knowledge, the size of a firm, regional knowledge base, and institutional capacity of a region. As a rule, SMEs are not as innovative as ‘frontier’ firms because they are constrained by limited resources, the rigidity of the labour market, and poor connections to other firms and research centres. At the regional level, barriers to innovation diffusion include path-dependence and various lock-ins.
From ACORE’s perspective, research should engage more actively with less developed regions and sectors, instead of focusing on leading regions and frontier firms (and expecting ‘lagging’ regions and firms to catch up and replicate their success). We treat peripherality as a complex condition that involves multiple dependencies between ‘centres’ and ‘peripheries’. To understand the process of novelty creation in less developed regions, ACORE conceptualises innovation as inclusive, socially embedded, and actor-driven. Innovation should not be confined to firms, products, and processes but also include areas of governance, institutional design, and policy. ACORE contribution to the OECD workshop was provided by Nadir Kinossian.