KNOWLEDGE PROXIMITY AND TECHNOLOGICAL DIVERSIFICATION. The role of stability and the alternatives

This paper examines the processes of generating new technical knowledge, aim- ing to contribute to an understanding of how less developed economies can diversify their knowledge base to support economic development. We study the structure of relatedness of required knowledge between technologies at a global level, conceived as a network where technologies are connected according to the intensity with which they co-occur in the inventors’ portfolios. Based on this, topological characteristics of the network are studied using node-level metrics to propose diversification strate- gies that alleviate the lock-in effects suffered by less developed economies. The paper contributes to the literature by proposing two indicators that can be used to analyse relevant dimensions of the innovation system of cities in less developed regions. One of the indicators enables us to compare the levels of stability of the technologies that comprise the knowledge base of the cities. The second provides a measure of the level of alternatives available to the city for each diversification decision. The results, based on the analysis of Latin American cities, show that the stability of the technologies present in a city, as well as the alternatives available to choose its diversification path, are relevant to designing diversification strategies that could contribute to overcoming the constraints generated by the characteristics of the knowledge base of those cities.