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This contribution focuses on the relationship between the urban milieu and high creativity firms, focusing on the videogames sector in Montreal. It reveals an organizational frame of a lack of large R&D departments and a lack of global networks of subsidiaries or partners through which firms access creative knowledge. None of these classical ways to enhance creativity is present. Instead, creativity relies on distributed and independent communities of knowing which generate, exploit, and develop a ‘creative slack’ as a source of growth for the firm. These communities find their source of inspiration and innovation in the fertile soil of a creative city.

This chapter discusses the case of Thailand and argues that technological learning by firms has been slow and passive owing to three factors: the failure of the educational system to create a strong cadre of technically trained people, the inability of government to develop and enforce policies to enhance Thai firms to develop technological and innovative capabilities, and little pressure on multinationals to build and upgrade their technological and innovative capabilities locally. Thai intellectual property regime was, until the early 1990s, characterized by weak protection and yet it was not pro‐diffusion either. That is, it was not particularly favorable to catch‐up and the lack of preconditions did not help either, for instance, the absence of sufficient indigenous absorptive capacity of firms, the lack of mechanisms or coordinated policy for knowledge diffusion and utilization, and the environment in general not being favorable to innovation.

In this chapter we examine whether absorptive capacity can constitute sufficient justification for rejecting the proposal of a large aid increase to support the ‘big push’. We argue that the probability of a poverty trap exists for many countries, in particular the least developed countries (LDCs) and that an increase in aid is relevant for them. Moreover we show that the decrease in marginal aid returns is slower in vulnerable countries, which supports the rationale to include vulnerability as one of the aid allocation criteria. We examine the main obstacles to absorptive capacity, such as disbursement constraints and short-term bottlenecks, macroeconomic problems, including loss in competitiveness and macroeconomic volatility, as well as the weakening of institutions. The general conclusion that we draw for reconciling the two approaches is that absorptive capacity strongly influenced by aid itself or by its modalities. The big push and absorptive capacity approaches cannot be reconciled without aid reform supported by an aid increase. First, what is needed is to balance the utilization of aid between activities that are directly productive and those that are social in nature in order to avoid transitory loss of competitiveness. Second, schemes that facilitate the use of aid as insurance against exogenous shocks are to be enhanced because they lower the risk of Dutch disease, and contribute to faster and more equitable growth over the long term. Finally a performance-based conditionality should replace the traditional policy-based one in order to cope with several absorptive capacity limitations, particularly the sociopolitical one. An aid-supported big push will not be effective without new ownership of policy by the recipient countries.

This chapter analyses the role of technical-industrial research institutes for industrial innovation in Norway. Using statistical data and a survey among firms, it is shown that there are many different types of interaction between institutes and firms. In addition to R&D and technical services, the institutes are a significant source of skilled manpower for firms. Three central roles for the institutes are highlighted: they are a learning partner for industry, they help increase absorptive capacity, and they constitute a flexible repository in the innovation system by helping firms in peak periods and by reducing the pressure on universities through assisting in teaching and supervision.

This chapter explores the implications of Common Ownership for duties resulting from climate change. It explains what we can learn from the standpoint of collective ownership of the earth about how to distribute burdens from mitigation and adaptation specifically among states. To this end, the chapter considers the ownership status of the atmosphere and ways of thinking about a fair division of burdens. It shows that, as an obligation of justice, regulating access to the absorptive capacity of the atmosphere is required to make sure the basic climate conditions of the earth are preserved. It argues that access to the absorptive capacity of the earth ought to be regulated by a fair-division scheme. It is an obligation of justice that access to that capacity be regulated, and it is a demand of reasonable conduct that such regulation be done by a fair-division scheme.

This chapter describes five things leaders must do to support strategic thinking about knowledge retention. This includes: (1) always linking organizational strategy to knowledge management initiatives; (2) coping with the uncertainty created by changing workforce capabilities; (3) taking a systemic approach when addressing knowledge retention problems and seeking solutions integration; (4) recognizing that knowledge loss can seriously hurt organizational learning capabilities by undermining a firm's absorptive capacity; and (5) using a strategic planning framework to take a long-term perspective on challenges posed by changing workforce demographics and the resulting threats of knowledge loss.

Industrial firms experience a strong tension between high demands to outsource manufacturing to low-cost regions and the need to integrate and co-locate key competencies in product development chains. The chapter explains this tension as a dynamic balance between knowledge integration (KI) requirements and capabilities. Three themes are discussed, illustrated by survey data and case studies. First, the chapter argues that parallel investments in manufacturing capability are valuable for meeting KI requirements derived from outsourcing manufacturing. Second, the analysis demonstrates how different kinds of outsourcing strategies shape the KI challenges. Third, the chapter shows how KI challenges turn up as hidden costs, performance trade-offs, or deteriorated cost reduction capability. The chapter claims that the lack of analysis of KI challenges is one explanation why previous studies on outsourcing effects have shown contradictory results. The chapter ends by suggesting the notion of manufacturing absorptive capacity for understanding KI challenges when outsourcing manufacturing.

This chapter further develops and clarifies the notions of absorptive capacity and cognitive distance discussed in Chapter 3. It considers issues of governance: how to deal with relational risk in learning, which builds on a theory of exchange developed in an earlier work, and includes elements from transaction-cost economics and a perspective of social exchange. The chapter also discusses how the need for interorganizational learning has intensified because of the emergence of radical product differentiation, and rapid change of technology and products.

Absorptive capacity and knowledge integration are key concepts in knowledge-based analyses of firms. Knowledge integration focuses on knowledge scope and integration of differentiated knowledge; absorptive capacity refers to knowledge evolution in path-dependent processes and how a firm’s prior knowledge supports and constrains future search. The chapter discusses the problems of boundaries and change in these concepts, relating them to the literature on organizational path-dependence and dynamic capabilities. Three agency options are suggested: boundary reproduction (path-dependence), boundary crossing (path extension), and new boundary configuration (path creation). The chapter offers a synthesis in which change may originate and involve knowledge-based agencies at different social levels: executive and non-executive levels (internal to the organization) and community of practitioners and organizational field (external to the organization).

This chapter examines the question of how many people can live in the land of Israel. It considers the implications of the present food supply on potential population levels. It begins by addressing the question of how many people lived in Israel during its different historic periods before the advent of global trade that allowed for the meaningful importation of calories. It then reviews the initial deliberations about the land's potential absorptive capacity. Self-sufficiency was the starting point for traditional discussions about carrying capacity levels. A society's ability to provide itself with energy and food was deemed fundamental to its long-term survival. For a brief period during the first half of the twentieth century, whether the land of Israel could provide food and a decent living for a rapidly growing population was the subject of fierce debate. The argument still casts a shadow on present discussions of carrying capacity.

Stronger states provide aid to weak, failing, or fragile states to help them establish and sustain peace, prevent their slide into civil collapse, and achieve sustainable growth and development over time. This chapter aims to help the reader have a better understanding of the effectiveness of development aid to fragile states and the capacity of these states to absorb aid for development purposes. It develops and applies a new, more comprehensive cross-recipient country measure of the capacity to absorb development aid, and is composed of a combination of three major components of absorptive capacity: capital constraints; governance constraints; and donor practices, including the number of donors present in the country in question and the extent of donor fragmentation.

Following US-led military intervention and regime change, Afghanistan's reconstruction, unlike Iraq's, was largely UN-led. The new government made executive decisions but was highly aid-dependent. By channeling aid outside control of the government, donors failed to strengthen and legitimize it. Efforts to eliminate poppy plantations without a viable economic alternative have increased conflict and strengthened the Taliban, rather than being a peace-supporting strategy. This chapter critically analyzes whether the reconstruction strategy in a country with such limited resources, weak institutions, and low capacity to absorb aid requires the sophisticated legal, institutional, and regulatory framework that the IFIs, USAID, and the US Treasury supported and helped design. Furthermore, with few exceptions, such framework largely ignored national preferences or cultural idiosyncrasies and was inflexible enough to detract from efforts at rehabilitation and social policies. These would have facilitated peace consolidation in the short run by improving the welfare of the population.

Open innovation (OI) has only sporadically been related to existing theoretical frameworks. The chapter starts by connecting OI to business and corporate strategy. Secondly, the relations with external partners can be examined in terms of transaction costs or transaction value. Thirdly, the resource-based view (RBV) (more specifically the knowledge-based view) and OI have resources and knowledge in common, however, the knowledge-based view and RBV are introspective and focus the ownership and control of internal resources. In contrast, the relational view can advance our understanding of open innovation as it introduces the role of knowledge-sharing routines and effective inter-organizational governance as sources of competitive advantage. In the attempt to connect open innovation to existing theories it is found that that: (a) open innovation largely neglected the link with firms’ business and corporate strategy; (b) some theories can be aligned with open innovation but still have to be adapted to grasp a particular dimension of open innovation; (c) open innovation is a complex, multi-dimensional phenomenon which compels us to combine different perspectives into a broader, dynamic framework.

This chapter discusses how capital flight constrains and undermines economic growth and development in Africa because of the resource gap which it exacerbates. It emphasizes that capital flight undermines domestic resource mobilization effort, reduces private domestic investment and the tax base, and thus brings about reduced public investment and social services. The analysis goes beyond economic growth and covers the deeper issues of social development including poverty and inequality. Also addressed in the chapter are issues of the quality of public finance and the absorptive capacity of a country in the event of reduced capital flight or capital flight repatriation.

This chapter examines the adoption of two open source software (OSS) applications at Hibernia Hospital in Ireland: The Star Office desktop suite, whose deployment was ultimately unsuccessful; and an open source email platform, which was ultimately deployed in a successful manner. It describes the different implementation trajectories for both open source applications within Hibernia and considers the issues of trialability and absorptive capacity, factors that facilitated OSS adoption.

This chapter examines the adoption of open source software (OSS) by the Italian Chamber of Deputies. It explains that the motivation for considering OSS was to provide the administration with a fine-grained control of the software it uses which would not be subject to commercial or technical constraints imposed by vendors. The OSS projects by the Chamber include OpenOffice, Zimbra and Alfresco. The chapter suggests that the OpenOffice project at the Chamber was seen as successful because of support and commitment from top management and widespread user acceptance, which reflected absorptive capacity.

Similar to chapter 10, this chapter sets forth another major aspect of the mobility of graduates.Migration as a fundamental mechanism of knowledge diffusion is broadly analysed in the economic literature. Immigration flows are assumed to enrich the local knowledge base, thereby contributing to innovation and economic development in recipient areas. This chapter investigates the link between international inflows of highly skilled migrants and local innovative performance using British data. Results show that skilled inflows, by raising and strengthening local capabilities, are significantly correlated with innovative performance in local labour markets. Besides, the characteristics of recipient regions turn out to play a significant role: theimpact of skilled immigration is larger in areas with greater absorptive capacities and stronger knowledge bases. That result supports the idea that immigration of high-skilled people is an option for innovation policy. However additional initiatives aimed at strengthening local innovation systems are a necessary complementary lever.