Alternative societal models of learning and innovation in the knowledge economy

Abstract

This article seeks to explain how knowledge, organisational forms, and societal institutions interact to shape the learning and innovative capabilities of firms. It focuses on education and training systems, and types of labour markets as key societal institutions shaping work organisation and the knowledge base of the firm. The paper argues that tacit knowledge, which is difficult to create and transfer in the absence of social interaction and labour mobility, constitutes a most important source of learning and sustainable competitive advantage in the knowledge economy. Institutions that are able to harness tacit knowledge as a source of learning are more likely to produce strong innovative capabilities. The analysis suggests that there are two alternative models of competence building that are favourable to learning and innovation, namely, the 'organisational community' and 'occupational community' model. The paper looks at the cases of Japan, the high-technology clusters in the USA and UK, and Denmark as illustrative examples, It argues that societies with different institutional arrangements will continue to develop a variety of organisational forms and learning strategies that privilege some sectors and discourage others. Institutionalised variation in patterns of learning and innovation therefore reproduce distinctive regional or national patterns of technological specialisation.