Sticky Knowledge Externality: An Instrument to Access Innovation

Abstract

The present paper aims to focus on: how small firms of an informal localized industry get access to new economic knowledge production, i.e. innovation. It is often observed that several informal localized industries are agglomerated in specific spatial clusters in particular geographical horizon. Several factors determine the location of these informal businesses and industries. The present study is confined to stress a particular factor, namely innovation. The large firms of the industry get access to this innovation through their own R&D. However, small informal firms cannot execute this R&D due to their insufficient fund. The present study is, therefore, confined to explore: how small firms of any informal industry access to this new economic knowledge production thereby ensure their survival and contribute to industrial growth. To reveal this, the present study selects a single industry, the Gems and Jewellery industry in West Bengal. The selection has been based on the simultaneous existence of small, informal and big formal production units in spatial clusters incorporating high growth potential, large employment opportunities, and increasing volume of industrial exports. The micro-level field studies, sampling design and data analysis of the study are based on the standard model approach in order to accept spatial heterogeneity.