Virtual Agglomeration of Producer Services and the Changing Geography of Innovation Systems: Implications for Developing Countries

Abstract

The rapid development of new generation of information and communication technology (ICT) has changed the traditional mode of service spatial configuration. A virtual agglomeration mode of producer service via internet platform is forming and reshaping the spatial organization structure of service industry. Producer services usually show the characteristics of high added value, high knowledge talents and high technology content, which can meet the diversified needs of complex innovation process in the manufacturing industries. Therefore, this paper explores the impact of virtual agglomeration of producer services on the manufacturing enterprises’ innovation performance and the changing geography of innovation systems. Compared with the traditional entity agglomeration model, the virtual agglomeration of producer services breaks through the time and space limitations of traditional service provision. It can realize the scale economy effect and knowledge spillover effect in a larger scope, reduce the service input cost, improve the quality of service allocation, and reshape the regional innovation ecosystem. Furthermore, this article conducts a data statistics and a case analysis, and finally puts forward implications for the integration of virtual agglomeration of producer services and manufacturing innovation process especially for enterprises in the developing countries.