Issues on the policy to implement innovative networks

In this paper we have examined the conclusions of different approaches about the effects of a policy to subsidize Innovative Networks (NPP policy). The implications of the I-O literature is that, if the objective government function is to subsidize only efficient network structure that the market would not spontaneously realize, in many cases a NPP policy is not appropriate because cooperation will be spontaneously realized. On the other hand the implications of social networks approach is that, if there is perfect information and firms do not behave strategically, a NPP policy could be needed in sectors where codified knowledge is or low or high. Conversely, sectors characterized by an intermediate level of codified knowledge do not need NPP policies because market gives incentives for the creation of a stable network. The same happens if codified knowledge is either very low or very high and an NPP policy could be a waste of resource.