Barriers and Limitations in the Development of Industrial Innovation in the Region

have on production efficiency (Richardson, 1974, Segal, 1976; Henderson, 1986, 1988;
Giersch 1995, Harrison et al., 1996; Matello, 1997).

The concentration of firms in the region and their connection with research institutions create
a source of knowledge and specialization which enhancing the development of new
technology and through it effect the innovative capability of the firm. The local synergies
expressed by the socio-economic interactions among firms in the region and their relation
with research institutes are crucial to the economic growth of the region and shape the
innovative milieu (Camagni, 1995). These synergies facilitate the dissemination of the
knowledge and information which enable the creation of technological innovation. This
component increases the innovativeness in a region through processes of imitation,
interactions among local agencies, cooperation between the private and public sectors in
setting up infrastructure and services, interactions between research centers and the firms
which engage in development and adopt inventions and innovations as well as cooperation
between suppliers and consumers. The creation of these synergies is likely to compensate the
local economy for its inability to create economies of scale, especially in small and lagging
regions. Cooperation with external agencies is also important in places where the processes of
development result from local initiatives, for over time it is not possible to rely only on local
ability, given the competitive limitation of small areas. The contact of industrial plants with
external research centers and institutions is essential for the development of competitive and
innovative skills especially in the peripheral regions (Camangi,1995).

3. Methodology

3.1 Objectives and Hypotheses

This study intends to identify the differences between firms in the importance they attach to
factors that facilitate against those that limit the development of innovation, as a function of
their geographical location and the industrial branch to which the firm belongs. The findings
will help to determine public policy aimed to reduce barriers and risk factors and encourage
the development of facilitative and supportive milieu. Certainly, such a policy will support the
establishment of innovative industry which is likely to exercise a positive affect on the
development and growth of the region.

In general, public policies are more universal than specific oriented in accordance to regions
and branch affiliation. In many cases the government avoid from giving particular treatment
that is hard to identify, and limited themselves to general rules (Frenkel et al., 2000).

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