Knowledge base complexity and technological catch-up: The shifting geography of innovation in the upstream petroleum industry

 

This article investigates the relationship between the dynamics of knowledge base complexity and shifts in the international geography of innovation, with important implications for the process of technological catch-up. Empirical evidence from the upstream petroleum industry is used to explain why some catching-up countries are taking advantage of emerging technological opportunities, whereas others cannot close the technological gap. Building on the work of Maleki et al. (2015), we propose that the dynamics of knowledge base complexity contribute to explain shifting geographical patterns of innovation and catching-up processes, provided that a crucial distinction is made between breadth and systemic complexity. Breadth complexity creates opportunities for catching-up countries and favours geographical dispersion, while increasing systemic complexity has opposite effects. Consistent with Cantwell's (1995) theory of globalisation of technological development, our results suggest that in dealing with systemic complexity, the cognitive and organizational proximity available within the internal networks of big multinational companies may be more important than geographical proximity.