Spatial Organization of Innovation in the Oil Equipment Manufacturing Industry: Case of Dongying, China

As innovation and technological change have become increasingly important for the competitiveness and sustainable growth of firms, cooperative innovation is now crucial for traditional industries in the context of globalization. This paper proposes a framework for analyzing the spatial pattern of cooperative innovation for traditional industries in developing countries. Based on in-depth interviews with 35 firms in the oil equipment manufacturing industry in Dongying City, China, this study argues that different firms in the innovation pyramid have various innovation activity preferences and spatial patterns. Firms with high innovation abilities tend to cooperate with various partners that are geographically dispersed and continuously expanding, while firms with inferior abilities usually cooperate with nearby fixed partners. Due to the differences in innovation environment and actor locations, firms tend to make different choices regarding innovation types and models, which highlight the importance of personnel training and basic scientific research at the global scale and practical product research and development at the national scale. Additionally, talent flow is the most important way to realize relationships for firm innovation activity.