Knowledge Transfer and Firm Learning in Developing Economy Clusters: Comparing the Role of Private and Public Intermediaries

This paper examines the important role played by intermediaries in encouraging knowledge transfer and firm learning in developing economy clusters. Although such clusters present a challenging learning environment (Bessant et al, 2003) joint action between firms has been identified as a successful route to learning (Schmitz and Nadvi, 1999). Recent work has, moreover, highlighted the crucial role intermediaries can play in encouraging collective learning (Visser and de Langen, 2006) and, in addition, how the skills intermediaries develop help them coordinate joint actions (Clarke and Ramirez, 2014).

A variety of organisations are able to carry out intermediary roles including research bodies, NGOs, private firms, government institutions, consultants, regulatory bodies and universities. This paper argues, however, that the complexity of the roles these organisations play is not fully understood and that the power and decision-making processes involved in collective action need further investigation. More specifically, the paper is interested in to what extent the motivations and behaviour of intermediaries differ as a consequence of their ownership. With this aim, the paper considers how intermediaries contribute to cluster governance, the value of the governance approach lying in its recognition of the complexity of institutional structures, social relations and decision-making processes (Moss, 2009).

Through a more explicit focus on the motivations of intermediaries we, firstly, review the literature on intermediaries and developing economy cluster governance, focusing in particular on the areas of knowledge resources, collective learning and collective action. Secondly, we consider how different intermediary ownership patterns affect their motivations and behaviour, comparing the development of two agricultural clusters, one with a powerful private intermediary and one where public intermediaries predominant. The extent, but also the limits, of the influence of ownership will be discussed.

We find that, firstly, with public intermediaries important knowledge becomes, to a far greater degree, a collective good and is diffused widely as part of the implicit and explicit remit of the intermediary. Conversely, in the case of private intermediaries, knowledge transfer is more restricted and its diffusion more reliant on public policy incentives to encourage firms to share knowledge. Secondly, we find that excessive reliance on both public and private intermediaries presents dangers of small firm dependency, although these dangers are more immediate and serious where private intermediaries predominate.