Firms are central economic agents that play an important role in systems of innovation as they take responsibility for generating and diffusing knowledge in both organizational and societal context. They must be considered as learning organizations wh...
Firms are central economic agents that play an important role in systems of innovation as they take responsibility for generating and diffusing knowledge in both organizational and societal context. They must be considered as learning organizations which interact with other firms and institutions that share their environment. The systems of innovation literature accentuates institutional conditions that influence innovation in sectoral, regional or national levels. Meanwhile, it tends to ignore the complex dimensions of firm practices in relation to learning and innovation activities. In this context, this paper attempts to examine what firms do for sustaining innovation and how they learn to innovate. This is not just critical to know individual firms innovativeness which depends on interactions with environments within and outside the organizational boundary but also to evaluate the regional innovation system potential. In short, it is important to see that firms would attempt to take advantage of distributed knowledge within and across the boundaries of the firm without sticking to particular regional innovation systems. I argue that the more firms of a cluster attempt not only to combine localized sources of knowledge and external sources of knowledge but also to become a learning organization, the more increased regional innovation system potentials can be.