The Knowledge Spiral and Innovation: a Case Study

Many theories exist to explain how knowledge is transferred and spreads within an industrial district and how this creates new knowledge and innovation. Despite this, a strong theory able to explain how knowledge is created and spread and particularly how innovation takes place within a modern industrial district does not exist. In this paper, we propose to overcome this gap through the empirical application of the Nonaka and Takeuchi model to a case study. This model, in fact, for us, is the best developed in the literature because it stresses knowledge creation and explains how innovation takes place in a firm and, for us, within a modern industrial district. This said however, the model presents various shortcomings when used in this way. Considering the limits of NTM, this paper aims to analyze whether the NTM integrated with the other mechanisms of knowledge conversion, creation and diffusion that we have identified with the help of the knowledge based theory, could be empirically applied to a modern industrial district and if innovation takes place. The empirical aspect is based on the results of surveys carried out on a sample of clothing-fashion district firms located in SE Italy (Apulia) and we present our empirical analysis using Newey’s (1987) two step estimator.