Interacting knowledge domains in the automotive industry: An innovation/value systems model and policy consequences?

Publication Type:

Conference Paper


Gerpisa colloquium, Berlin (2010)


Over the last two decades the concept of the ‘knowledge-based economy’ has been at the forefront of economic development policy. While all economic activity is based upon knowledge, there are a number of features and changes that are commonly seen to characterise knowledge-based economies. These include the rapid technological change in the last two decades; the digital revolution which has facilitated the global transfer and storage of knowledge; the growth of a business sector (KIBS) based on intellectual services and knowledge trading and new ways of integrating manufacturing and services.

In addition, advances in ICT have accelerated the process of globalisation and the creation of a territorial and intellectual division of economic activities between developed and developing economies. This division has been characterised as a differentiation between innovative, or knowledge, activities and those that are routinised and based upon incremental innovation and cumulative knowledge dynamics. The nature of these value systems, and the relational aspects of knowledge acquisition and use, inside and outside territories have been much discussed within the academic and policy communities. Topics of debate have included the mix of internal (to the firms) and external knowledge inputs and how these different knowledge types can be captured, developed and exploited in economic spaces.

The automotive sector has not been significantly included in these discourses of the ‘knowledge-based economy. It is a mature industry dominated by a small number of vehicle makers with an innovation model that is ‘top down’ and proprietary and, for the most part, incremental and process oriented. This reflects the socio-economic maturity of the market, the need to extract maximum returns under the ‘lean model’ and the companies’ general aversion to risk.

However, the financial crisis has exposed the business model and financial position of most companies as fundamentally weak. Profit margins are low and the need for scale efficiency has led to an over-investment in production capacity which has been exacerbated by the global recession. Even in the ‘auto-boom’ areas of Central and Eastern Europe, India and China the same picture is evident. In addition, political and consumer pressures are forcing a re-assessment of the accepted thinking on vehicle construction, technology and marketing. Thus, there are, potentially at least, a number of major changes in the pipeline that may influence the industry’s development over the next decade. For the policy community such changes present the challenge of maintaining support for production while adopting policies appropriate to a changing economic and political environment.

In this paper we consider the different functional spaces of research and development, manufacture and marketing in which the industry’s value chain is situated. Using case studies we illustrate the relative importance of cognitive, relational and geographical proximities and the importance of different knowledge types and innovation models within the overall value system. The work has general interest in informing territorial authorities seeking to capture and hold the economic ‘high ground’ and stimulate the growth of high value activities in their areas of influence.

The paper draws on research in the EC FP6 funded project, EURODITE. The authors therefore acknowledge the funding of the European Commission (Contract nr° 006187). We also acknowledge the inputs of colleagues in the project including Olivier Crevoisier, Laura James and Chris Collinge.



GIS Gerpisa /
4 Avenue des Sciences, 91190 Gif-sur-Yvette

Copyright© Gerpisa
Concéption Tommaso Pardi
Administration Juan Sebastian Carbonell, Lorenza MonacoGéry Deffontaines

Powered by Drupal, an open source content management system