Innovation and the Growth of Cities

Innovation and the Growth of Cities

Zoltán J. Ács

This new and original book by Zoltan Acs explores the relationship between industrial innovation and economic growth at the regional level, and reaches conclusions as to why some regions grow but others decline. While the analysis draws on industrial organization, labor economics, regional science, geography and entrepreneurship, the book focuses on innovation and the growth of cities by the use of endogenous growth theory.

Chapter 1: Technology and Entrepreneurship

Zoltán J. Ács

Subjects: economics and finance, economics of innovation, evolutionary economics, geography, cities, innovation and technology, economics of innovation, urban and regional studies, cities


1.1 INTRODUCTION In 1874 James Ritty invented the mechanical cash register in Dayton, Ohio. For most of the twentieth century to Wall Street and the world, Dayton, Ohio was the home of the National Cash Register Company. National Cash Register got rich as it sold its machines all over the world, and it rewarded its workers with high wages and benefits, and its home town with a firm hand of civic guidance. However, Dayton’s dominance in cash registers and numerous other industrial innovations did not last forever. The information revolution led to a shift in the knowledge base, and the mechanical cash register was replaced with optical scanners and computers at the checkout counter in virtually every retail establishment. After a hostile takeover of National Cash Register by ATT in 1991, the financially strapped company was downsized, and finally spun off. Today, Dayton finds itself between two worlds: the old economy of making things and job security and the new economy of services, technology and job insecurity (New York Times, 1996). The experience of Dayton is by no means unique. Early in the twentieth century the great bulk of traditional industrial strength of the United States was concentrated in a relatively small part of the northeast and the eastern part of the American midwest: roughly speaking, within the approximate parallelogram of Green Bay, Wisconsin–St Louis–Baltimore–Portland, Maine. This manufacturing belt took shape in the second half of the nineteenth century and proved remarkably persistent. As late as 1957,...

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