Beyond Regional Clusters: On the Importance of Geographical Proximity for R&D Collaborations in a Global Economy-the Case of the Flemish Biotech Sector

When internal knowledge bases are insufficient for developing innovations, companies tend to collaborate with external R&D partners. According to a long-standing literature on "clusters", "industrial districts", "local production systems" and "regional innovation systems", geographical proximity between innovation partners is considered a precondition for inter-organizational collaborations: proximity is said to facilitate trust, the transfer of tacit knowledge and the intensity of interactions. This article investigates the importance of geographical proximity for R&D collaborations between biotech firms and their innovation partners. Are geographically close innovation partners likely to collaborate more intensely? Studies of the Flemish biotech industry shed light on this question. Regression analyses combined with qualitative interview data reveal that geographical proximity has become less important for inter-organizational collaborations. Owing to lower communication and transportation costs, innovation partners can easily collaborate even when they are not situated close to each other. This leads us to conclude that globalization transforms inter-organizational collaborations.