The Regional Economics of Knowledge and Talent

The Regional Economics of Knowledge and Talent

Local Advantage in a Global Context

New Horizons in Regional Science series

Edited by Charlie Karlsson, Börje Johansson and Roger R. Stough

The distinguished contributors advance the current research frontier in three novel directions which focus on: the role of human capital and talent for creativity, entrepreneurship and regional development; the role of institutions for the behaviour of firms and entrepreneurs; and the influence of the global context on the location, export and innovation behaviour of firms in a knowledge economy.

Chapter 6: Endogenous Factors in Regional Performance: A Review of Research in Australia

Robert J. Stimson

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


Robert J. Stimson There is an increasing interest in the role of endogenous factors in regional development. The literature places emphasis on factors such as regional industrial structure and diversification/specialization, human capital, population size and growth, leadership and institutional arrangements, in addition to the traditional concerns with regional resource endowments. The chapter reviews evidence from research in Australia on the role some endogenous factors play in differentiating regional performance in mainly non-metro settings. 6.1 EVOLVING APPROACHES TO REGIONAL ECONOMIC GROWTH Understanding the nature and potential causes of spatial variation in regional economic performance is important in the context of developing and implementing regional policy. There has been an evolution in regional economic development literature from neoclassical theory based on the Solow (1956) model through to the ‘new growth theory’ (see Romer, 1986, 1990; Barro, 1990; Arthur, 1994), and a shift in emphasis from the importance of regional comparative advantage to regional competitive advantage and – more recently – collaborative advantage as regional economic development analysts have focused more and more on endogenous factors and processes in regional development and growth (see Johansson et al., 2001; Stimson, Stough and Roberts, 2006). Neoclassical economic theory argued that there was a tendency for different units to converge over time because of assumed long-run diminishing returns to capital. However, the extent to which convergence occurs is important as it provides an indication of how different groups of people or 159 KARLSSON (9781848443280) PRINT.indd 159 20/07/2012 12:18 160 The regional economics of knowledge and talent regions...

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