The Associational Economy: Firms, Regions, and Innovation

Posted: 4 Nov 2009

See all articles by Kevin Morgan

Kevin Morgan

affiliation not provided to SSRN

Philip Cooke

University of Wales

Date Written: 1998


Proposes a model for economic development, the associational model, as a third way between state planning and market-driven approaches to development. The associational model correlates high capabilities in social interaction and communication, particularly in the forms of high trust, learning capacity, and networking competence, with the economic and social success of a firm. As the process of innovation becomes increasingly collaborative, this social capital can be decisive to the outcome. Because much collaboration involves tacit knowledge, that is, knowledge that has not been put into a tradeable or expressible form, successful collaboration requires personal interaction and shared experiences. Accordingly, the importance of less hierarchical corporate governance forms and local and regional milieux emerge. The consequence of these trends is the ascendancy of the region as the locus of learning and collaboration that drive innovation. Four regional case studies are presented: Baden-Württemberg, Emilia-Romagna, Wales, and the Basque Country. The final chapter traces the intellectual roots of the authors' study - the ideas of Schumpeter, Veblen, Marx, and Hayek - and concludes with a sketch of how an associational approach may be implemented by policy makers. (CAR)

Keywords: Evolutionary economics, Association model, Social networks, Social capital, Learning networks, Institutional alliances, Regional development, Technology innovation, Innovation process, Innovation policies, Communication skills, Cooperation, Tacit knowledge, Interpersonal relations, Firm governance, Economic development

Suggested Citation

Morgan, Kevin and Cooke, Philip, The Associational Economy: Firms, Regions, and Innovation (1998). University of Illinois at Urbana-Champaign's Academy for Entrepreneurial Leadership Historical Research Reference in Entrepreneurship, Available at SSRN:

Kevin Morgan

affiliation not provided to SSRN

Philip Cooke

University of Wales ( email )

King Edward VII Avenue, Cathays Park
Cardiff, CF10 3NS
United Kingdom

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