RESEARCH / ENTREPRENEURSHIP · MANAGEMENT SCIENCE · 2017
Microgeography and the Direction of Inventive Activity
Summary
Exploits quasi-random co-location of labs at MIT to show that physical proximity shapes not just how much scientists collaborate but the direction of what they invent — with knowledge flows that decay at the scale of meters, not miles.
“Colocated labs engage in research that is 1.36 times more likely to lead to a breakthrough”
In the paper, I exploit a natural experiment to estimate the causal impact of proximity on the probability, quality and type of scientific collaborations, finding effects on both the rate and direction of innovation. After colocation, scientists are 3.5 times more likely to collaborate, an effect that is driven by labs that faced higher search costs ex-ante. Separating labs with past collaborative ties, moreover, does not decrease their collaboration rates, i.e. once a tie exists, individuals can compensate for geographic distance. Knowledge flows instead are more sensitive to changes in proximity: While colocated labs grow increasingly similar in the knowledge they draw on, separated ones grow apart. Proximity also profoundly changes the degree of experimentation and the types of projects being pursued, with colocated labs engaging in higher variance research that is 1.36 times more likely to produce a breakthrough. The paper highlights how by allocating space, organizations deeply influence the degree of exploration versus exploitation that different teams will engage in. It also shows how scientific communities, also as a result of endogenous space assignment, can become an obstacle to high-impact idea recombinations that require collaboration across them.The paper was awarded the “Wiley Blackwell Outstanding Dissertation Award in Business Policy and Strategy”.
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