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 8: Regional learning and trust formation

Tsuyoshi Hatori, Hayeong Jeong and Kiyoshi Kobayashi

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


Policy-makers responsible for entrepreneurial challenges often face a range of diverse issues that typically involve environments with high uncertainty and ambiguity, making it difficult to find clear solutions. Such situations require an integrated and coordinated process involving an interactive search for solutions by regional agents including policy-makers (Kobayashi and Hatori, 2006). Indeed, interrelations among regional actors developing new and innovative ideas are crucial for regional growth. Schumpeter (1961) suggested that regional growth is the result of a combination of new ideas, processes, organizations, and institutions. An important role for policy-makers is to stimulate interaction among regional agents. Among the various social system typologies proposed in the literature, one prominent element is the degree of control that distinguishes rigidly controlled systems from open and relaxed systems (Johnson, 2001). Innovative systems are usually considered the latter type. This does not necessarily mean that regional innovation takes place without requirements on the interaction among the regional agents. The performance of innovative systems depends on institutions to guide perceptions and activities, including ‘the rule of game’ (Rametsteiner and Weiss, 2006). This study focuses on two conditions upon which the principal potential of an interrelated regime in a region relies: common language and trust.

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