KEROSINE (Knowledge Economy and Regional Strategies for Organisational and Sustainable Innovation) is a four-year’s project that started on the 1st of July 2006. It is a Strategic Basic Research project financed by the Institute for the Promotion of Innovation by Science and Technology in Flanders.

This project is about the question of economic restructuring and organisational innovation in Flanders from the perspective of the globalised (knowledge-based) economy and taking into account the regional institutional environment. The strategic research questions focus on the broad field of economic globalisation, evolving institutional contexts and regional sustainable development. Globalisation refers to the actual tendencies with respect to the international level on which social division of labour is (re)organised within economic value chains and the growing networking and integration of communication-, production- and market processes. The theoretically underpinned assumption is that globalisation is manageable by well-informed and strategically oriented decision makers. In view of this, three major innovative perspectives of the project are:

1. Whilst the power of purely macro-economic and statistical approaches of globalisation of transaction chain events is limited, empirical micro- and meso-level research have a major and innovative contribution to a better understanding.
2. The systematic investigation of the correlation between the Flemish economic tissue - as the result of strategic organisational decision making – and the institutional context is a major characteristic of the different workpackages and of the final outcome.
3. Therefore, the project‘s focus includes investigation of the process and drivers of economic restructuring.

The scientific work of the project is organised around five major empirical streams, each of them addressing different dimensions of economic and organisational globalisation and with a complementary approach, thus contributing to integrated, coherent and broad knowledge. In order to address the research question, the project is divided into five workpackages, including four parallel streams that consist of complementary approaches to the basic research questions, and a general synthetic workpackage designed to integrate the outcome of the four streams and that will contribute to the output that is most directly aiming at the target audiences of the project.

WP1: Transfer of business practices

Research objectives: the formulation of an empirically driven organisation-theoretical explanation of delocalisation of economic activities.The workpackage’s aim is to empirically contribute to, on the one hand, the relation between the transaction cost approach, the organisational logic of outsourcing and delocalisation deriving from transaction costs arguments, location theory embedded in the analysis of high tech regions and the approaches of institutional embeddedness, and on the other hand also to clarify the implications of the embeddedness of organisations in their institutional environment.

Methodology: this approach requires a research design, which allows assessing the impact of interorganisational factors, as well as the interinstitutional variation in the context of organisational decisions. Therefore, a qualitative comparative research design with case-studies in multinational companies is adopted.

WP2: Job loss and job growth analysis

Research objectives: this workpackage aims at investigating the dynamic character of organisational restructuring in the perspective of globalised value chains and the impact on the regional economy and labour market. Data gathering in this workpackage will yield a comprehensive overview and in-depth analyses of collective job loss and job growth events in the Belgian regions (Flemish and Walloon region, and Brussels-Capital district) that can be assumed to be related to a change in firms’ strategies or capabilities with regard to the organisation of transactions of organisations, in particular concerning outsourcing and/or relocation of activities, or, particularly in case of job growth, the establishment of new enterprises, or branches of new enterprises. From the regional perspective both collective job losses, collective dismissals, and considerable job growth are relevant in this respect.
The ‘comprehensive overview’ aims to explain job loss and job growth, and to explore how these events vary in correlation with the regional specificities of the Flemish, Brussels, and Walloon regional economy. The ‘in-depth analysis’ will focus on the processes, including decision making, antecedents and causes, and effects on the regional labour market and economy. In this phase, considerable attention will be paid at the institutional, political and social aspects of both job loss and job growth events.

Methodology: analysis of job loss and job growth based on administrative data sources, i.c. data of the Belgian Social Security. These data, after being analysed, will serve as a sample framework to select those establishments which will be examined in a more profound way through a survey research. Other data, such as the Labour Force Survey and OECD data, will be used to assess the shift in employment in Belgium’s neighbouring countries.

WP3: Start up companies – Monitoring and analysis of context sensitivity in relation to the institutional environment

Research objectives: This workpackage is designed to detect and evaluate the European-wide emergence of rapidly developing start up companies. The aim of this workpackage is to assess whether or not, and under which conditions, these newly emerging forms of economic activity offer perspectives for innovative and sustainable economic development. The innovative character of the current contribution in this line of research is, firstly, its empirical focus on sustainable start up companies that offer opportunities for sustainable employment creation in the future. Secondly, by expanding this perspective on evolutionary organisational models with an institutionally comparative component in the design, the impact of variation in institutional structures and policy practices on sustainable employment creation can be assessed.

Methodology: the research design is built on intended European-wide monitoring of start up companies, allowing for analytical cross-tabulation of nationally specific variables with, the features specific to the concerned organisations. A web-survey will be conducted in a well founded selection of European countries.

WP4: Restructured value chains

Research objectives: mapping the location of generic business functions of Flemish for-profit companies and the characteristics of transactions for these business functions. To identify motives, the rationality, the criteria used in loca¬tional choice and the effects of the implementation. To describe enabling technologies at the level of the value chain and its respective components, and the characteristics of the workforce involved.

Methodology: large-scale survey in Flemish establishments

WP5: MATRIKS – Mapping and assessing transaction relocations in interconnected knowledge societies

Research objectives: the integration of the data collected in this fourfold empirical strategy in a coherent, centralised and con¬tinuously updated generic open-end database on transaction-chains. On this basis, applied sectoral and subregional investigations targeting at stakeholders in view of employment, innovation and regional devel¬opment strategies can be developed in follow-up projects.