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 10: Regional Innovation Systems

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


10.1 INTRODUCTION In the introductory chapter of Nelson’s National Innovation Systems, a central hypothesis is formulated about ‘a new spirit of what might be called “technonationalism” . . . combining a strong belief that the technological capabilities of a nation’s firms are a key source of their competitive prowess, with a belief that these capabilities are in a sense national, and can be built by national action’ (Nelson 1993: 3). While Richard Nelson and Nathan Rosenberg are careful to explain that one of the central concerns of their 15country study is to establish ‘whether, and if so in what ways, the concept of a “national” system made any sense today’, they also add that de facto ‘national governments act as if it did’ (Nelson 1993: 5). The purpose of this chapter is to raise some questions about this hypothesis and to provide a framework to study ‘local’ systems of innovation as an alternative hypothesis. In Section 10.2, we deal with the process of globalization of economic activities and of its impact on the national production and governance systems. This forces one to confront both what John Naisbitt has called the ‘global paradox’ and what we have called elsewhere the ‘dispersive revolution’ (Naisbitt 1994; de la Mothe and Paquet 1994a). In Section 10.3, we review quickly the main features of network dynamics and the way it is stalled by the phenomenon of centralized mindset: a strong attachment to a tendency to bet on centralized means of problem-solving that almost inevitably lead to compulsive centralization...

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