Lack of knowledge networking? The role of discontinuity in the post socialist countries

Knowledge generation is considered to be a collective process which requires mobilisation of number of knowledge agents. There is open debate in the literature about the role of spatial proximity for the knowledge interactions. Are proximity or distance interactions crucial for the knowledge generation? At the same time the question of the modes of knowledge governance gains on importance. If the market based knowledge interactions among firms are risky, they will require high level of investments to secure them, transaction costs will be high. In this case, such exchanges take place outside the market in other non-market structures, in principle as hierarchies (e.g. within a firm) or as hybrid contracts (e.g. long-term contracts). Turbulent and uncertain technological, business and regulatory environment in post socialist economies sharply increases the knowledge transaction costs. Due to the discontinuity in the knowledge generation processes, the economic system is characterized by high transaction and interaction costs associated with searching for economically useful knowledge in the region. Collective generation of new technological knowledge based on local intensive network interactions in post-socialist countries is a risky business from this perspective. The lack of trust among people hampers the cooperation activities and indicates potential costs emerging with opportunistic behaviour. According the main principles of transaction cost theory hierarchical organisation dominate in the governance of the knowledge processes as they are more effective to solve potential conflicts. At the same, time closed communities with a certain level of trust engaged in collective knowledge processes, may be expected as well. The empirical part of the paper is based on the case study of territorial knowledge dynamics undertaken in the framework of FP6 Eurodite research project. We are highlighting specific routes of knowledge processes in the IT sector in Bratislava region Slovakia.