Foundations of the Knowledge Economy

Foundations of the Knowledge Economy

Innovation, Learning and Clusters

Edited by Knut Ingar Westeren

This book presents new evidence concerning the influential role of context and institutions on the relations between knowledge, innovation, clusters and learning. From a truly international perspective, the expert contributors capture the most interesting and relevant aspects of knowledge economy.

Chapter 7: Not Being There: Why Local Innovation is Not (Always) Related to Local Factors

Richard Shearmur

Subjects: business and management, knowledge management, economics and finance, regional economics, innovation and technology, innovation policy, knowledge management, urban and regional studies, clusters, regional economics


Richard Shearmur Introduction In this chapter I consider the links between territory and innovation, and draw together the implications of a number of recently published papers (Shearmur, 2010a, 2010b; Shearmur and Doloreux, 2009; Doloreux and Shearmur, 2011). Despite the popular notion that firm-level innovation is influenced by the local environment, I will argue that the scale at which the environment influences firm behavior is far from evident. Indeed, while there are many classic examples of successful local innovation systems (Baden Württemberg, Silicon Valley, Route 128, 3rd Italy, etc.), these may in fact be examples of well-located regions benefiting from the external linkages that their location provides. Although the end result is the same – firms in these regions are more successful and innovative than those in other regions – the causal mechanism suggested is one that is not connected with the locality itself. While this is beginning to be recognized by researchers (e.g. McCann, 2007; Andersson and Karlsson, 2004; Lorentzen, 2007), empirical evidence is still sparse. Implications for regional development policy have scarcely been explored. In the particular cases mentioned above there probably is a local effect (due to the presence of urban agglomerations and of the myriad of opportunities and interactions they enable – Duranton and Puga, 2003), but this effect is combined with an accessibility effect (McCann, 2007). Since most studies of innovation systems focus on urban areas (Crevoisier and Camagni, 2001) and only look for local effects, the accessibility effect is usually not noticed. However, in non-metropolitan regions there...

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