Hidden Champions and their integration in rural regional innovation systems: Insights from Germany

Abstract

This article studies the integration of Hidden Champions - little-known highly innovative global market leaders - in rural regional innovation systems (RIS) in Germany. These firms are analyzed in relation to their integration into a RIS framework, which differentiates two subsystems: knowledge generation and diffusion, and knowledge application and exploitation. The relevance of firm-internal and firm-external regional influencing factors on rural RIS integration is examined. The article proposes that Hidden Champions are weakly integrated in RIS due to their international sales focus and high technological specialization. To test this premise, 57 expert interviews with Hidden Champions and regional actors were conducted. It was found that key influences for RIS integration of this firm type are ownership structure, firm size, organizational status, location economies, and urbanization economies. Family businesses are on average more integrated than other firm types, but vary significantly in their integration.