To Örebro University

This is a case study that aims to explain how the company Bofors in Karlskoga, Sweden, struggled through three periods of crisis or uncertainty, while remaining innovative. It begins in the late 19th century and ends in the early 21st century after Bofors had been divested. The investigation takes a constructivist approach and focuses on the experiences of individuals. The data consists of archived letters, interviews and secondary sources. The concept of diversification is applied to explain how Bofors, originally an ironworks acquired new technologies and skills over the years, which were combined in a number of ways, resulting in an innovative local knowledge infrastructure. This development took place while the company sought to adapt to a changing institutional environment – societal norms, rules and practices – following two world wars, disarmament and deindustrialisation. The results also show that, during each of the three periods, Bofors was dependent on long-distance partnerships with external actors to gain new knowledge or financial resources, or both. Different dimensions of proximity are applied, revealing that cognitive proximity was most important for the success of the partnerships. Partners collaborating on innovations had to share a knowledge base. And, preferably, partners’ knowledge should be complementary. But if no proximities were high during the early phase of a partnership, if partners were too far apart from cognitive, geographical, social, institutional and organisational perspectives, then geographical proximity was crucial for increasing the other proximities. To meet face-to-face was necessary in order to learn from each other and to bridge gaps in the relationship caused by partners not knowing each other and belonging to different organisations and cultures with different languages and traditions.