Knowledge, Innovation and Space

Knowledge, Innovation and Space

New Horizons in Regional Science series

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

The contributions in this volume extend our understanding about the different ways distance impacts the knowledge conversion process. Knowledge itself is a raw input into the innovation process which can then transform it into an economically useful output such as prototypes, patents, licences and new companies. New knowledge is often tacit and thus tends to be highly localized, as indeed is the conversion process. Consequently, as the book demonstrates, space or distance matter significantly in the transformation of raw knowledge into beneficial knowledge.

Chapter 1: Knowledge, innovation and space: introduction

Charlie Karlsson, Börje Johansson, Kiyoshi Kobayashi and Roger R. Stough

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


The contemporary world economy – here referred to as a knowledge economy – is characterized by the ascendance of knowledge as a major factor of production and renewal. This evolution is accompanied by an increased mobility and liquidity of capital and associated regulatory and liberalization reforms of large dynamic international economic sectors such as finance, advanced business services and information industries. Recent technical advances and institutional innovations in transport and communications are not only reducing time distances and eroding the barrier of borders, but are also at the heart of the evolution of the world economy into a knowledge-rich global production system. We can observe the emergence of a new international division of labour, which takes shape through the formation of a global system of metropolitan and large urban regions, where each urban agglomeration offers expertise in various functions and activities and plays specific roles in the globalization process (Sassen, 2006). These cities are increasingly becoming dominating as (i) centres of political power, international trade, and the banking and financial system, (ii) centres that specialize in the creation, appropriation and dissemination of knowledge and innovations, (iii) centres where information is concentrated and transmitted through the media sector, and (iv) centres of creativity where the arts, culture and leisure activities are developed and consumed. They are today the main strategic hubs in the world economy as drivers of creativity, innovation and entrepreneurial activities, and, as a result, are the dominant engines of economic growth.