Innovation and knowledge sourcing of modern sectors in old industrial regions: comparing software firms in Moravia-Silesia and Upper Austria

Abstract

Old industrial regions in many cases suffer from a predominance of basic and traditional industries as well as a lack of modern sectors and of innovation. Often we find this type of region oriented to traditional sectors and technology paths. The development of new sectors such as software might help to overcome such problems and contribute to diversification and a better innovation performance of such regions. In this context, we examine to what extent the different socioeconomic and institutional background of old industrial regions has an impact on firms’ innovation performance and knowledge sourcing in the new sector. For this purpose we compare software companies in the Czech region of Moravia-Silesia and in the Austrian region of Upper Austria. Both are regions with a considerable industrial tradition but with a quite different historical and institutional background. Whereas Moravia-Silesia region is a part of Czechia – a transformed country with a state socialism and central planning background – Upper Austria is a relatively wealthy region within an advanced market economy with a social partnership background. In this paper we investigate to what extent software firms in these two regions differ in their innovation activities and knowledge-sourcing patterns and how this is related to the institutional background and characteristics of their respective regional innovation systems.