Abstract/Summary

Little is known about innovation in small low-tech clusters in peripheral locations. Moreover, little is known about how tacit knowledge dynamics contribute to the innovative power of clusters. The Faroese seafood cluster is a highly tacit environment, yet despite its small, remote and low-tech nature, it stands out as highly innovative in the seafood industry. This exploratory, process organisational study (Langley and Tsoukas 2016) provides insight into the tacit knowledge dynamics underlying the cluster's innovative capacity by comparing two case studies of major innovators in different parts of the cluster: Salmon farming and one in traditional pelagic sea fishing. Process studies focus on how and why things emerge; the primary aim of this work is to understand how innovation emerges from tacit knowledge dynamics in each of the two subclusters by comparing the interactive knowledge practices in operation. Traditionally, research on industry clusters apply quantitative methods, including economic data seeking explanation at a macro level. This research adopts a social constructionist epistemology within a largely qualitative case study design, given the nature of tacit knowledge dynamics at all levels. It uses the critical incident technique as the primary method for investigating the pattern of tacit knowledge dynamics in each case. 30 semi-structured interviews were conducted with key individuals involved in 35 innovations: 20 in fishing and 15 in salmon farming. Data were triangulated with multiple datasets, including micro-data. Findings show that the tightly know Faroese community supports particularly close trusted ties which contribute strongly to tacit knowledge access in innovations. This is particularly true in fishing, where relationship ties are may be described as intricate and intimate. Ties in salmon farming are strong but supplemented with dialogue in weaker network ties outside the cluster. Both firms in the cluster are part of the same web of knowledge relationships but draw on tacit knowledge to varying degrees, depending on whether the innovation is radical or incremental and where the innovation occurs. In fishing, the innovations arise primarily in operational settings, often generated through practical know-how of life at sea. In contrast, salmon farming is more strategically driven, and scientists and researchers’ technical knowledge is combined with that of people at the operational level. Local Faroese university and R&D institutions provide little input into tacit knowledge dynamics in the fishing sub-cluster. In salmon farming, ties to foreign clusters and R&D institutions add explicit knowledge to combine with local tacit knowledge. This may account for the more significant number of radical innovations in salmon farming. It appears that cluster proximity between fishing and salmon farming is complementary in terms of knowledge movement, but network theory may be more critical in salmon farming. Theoretically, this study contributes primarily to cluster theory by developing a model that evidences how tacit knowledge dynamics allow small and remote clusters to become innovative. The dynamics at macro meso and micro level within two parts of the cluster are complementary but distinct: Tacit knowledge moves in fishing through very close community ties and practical know-how; In salmon farming, the cluster’s proximity is supplemented by explicit technical knowledge drawn from foreign networks.