Geographical proximity and innovation: Evidences from the Campos Basin oil & gas industrial agglomeration—Brazil

This paper analyzes the results of an empirical study involving 10 firms located in the Campos Basin oil & gas industrial agglomeration in Brazil. Within the last 20 years, this region has emerged from limited oil & gas competencies to a leading center for deep and ultra-deep offshore exploration and production capabilities, resulting in Brazilian energy self-sufficiency. Firms operate under intense technological dynamism, providing technologically complex goods and services to major oilfield operators in that region. Firms analyzed included wellhead equipment suppliers (‘wet christmas trees’), well service suppliers (well technology) and the highly influential national oil company, Petrobras. The analysis uses elements from the clusters and innovation systems approaches. The aim of this work is to determine the formation process and the actual characterization of the agglomeration and understand, from the perspective of the knowledge system and firms’ technological approaches, how technological changes are implemented in the Campos Basin agglomeration and the origins of such changes. As a secondary objective, this study attempts to verify whether geographical proximity is a factor that favors innovation by the firms within the agglomeration. Results indicate the existence of a group of firms in which geographical proximity has a positive influence on innovative activities.