Arab Open University Jeddah Branch B 300 B

Arab Open University. Jeddah Branch B 300 B Policy Chapter 16 By: WASSIM ALWAN

Towards a Competence Theory of the Region

Lawson extends the notion of the competence theory of the firm to that of a region. Lawson reminds us that in the competence theory of the firm “collective learning” is a key element and that the core competence can support several products and businesses In this chapter, he extends the resources and capabilities analysis from the firm to the region any outlines various reasons why regions maybe considered as repositories of distinctive resources and capabilities

Regions may come to acquire distinctive clusters of capabilities through several mechanisms that include technological and knowledge, inter-firm mobility of personnel and the informal sharing of information and knowledge between economic units through personnel networks. Information also tends to be shared through various formal institutions that may exist in a region, such as employer associations, chambers of commerce and trade unions.

The development of trust can enable superior coordination between economic participants, therefore increasing the efficiency of the regional economic system as a whole. The existence of long term relationships contributes to the willingness of firms to share competences that may complement each other, and thereby develop new capabilities and new sources of competitive advantage. Recurrent interaction also enables the evolution of common language conventions and culture that help to interpret information and facilitate collective learning

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