Power in Firm Networks: What it Means for Regional Innovation Systems

Abstract

The role of power within regional firm networks is noted in empirical studies but insufficiently theorized. We suggest that network functioning is conflictual and that more powerful network members, particularly transnational corporations (TNCs), leverage regional resources to advance their sustainable competitive advantage. The agendas and power exercised by TNCs within regionalized firm networks have significant implications for regional policy and the uneven allocation of resources and capacities within and among regions. Our findings indicate that transnational firm access to resources critical to innovation, including university research and skilled labor, negatively affects the potential for innovation by small and medium-size firms.