Chapter 2: The Regional Determinants of Firms’ Innovation: The Role of Social Capital and Regional Creativity
It is recognized that firms’ innovation is highly dependent on geographical location (Boschma, 2005; Fritsch and Franke, 2004; Morgan, 1997) and considerable scholarly attention has been paid to the regional dimension of innovative activities (Acs et al., 1992; Evangelista et al., 2002). The framework generally employed is a geographical application of the concept of embeddedness (Granovetter, 1985; Polanyi, 1944), which, unlike the neoclassical conception of a self-determining interaction between actors governed by pure economic logic, supports the idea that the social system exerts a strong influence on economic activity. Several contributions explore dimensions of the geographical context that promote knowledge creation and innovation. Saxenian’s (1994) analysis of the different economic performance of California’s Silicon Valley and Boston’s Route 128 was a seminal contribution that demonstrates the crucial importance of local context in determining firm competitiveness. Saxenian (1994) argues that the success of Silicon Valley – compared to other regions such as Route 128 – is based on the more robust exchange of ideas among firms and other local institutions, such as universities, through a system of collaboration and learning. Literature on geographically localized knowledge creation highlights the role of regional creativity and social capital and recognizes that these aspects of the regional context are crucial for maintaining firm competitiveness and promoting local growth (Florida, 2002; Putnam et al., 1993). Some studies approach the concept of regional creativity primarily by examining regional capability to attract skilled and talented individuals (Florida, 2002; Mokyr, 1990; Romer, 1990). This chapter builds on these works and explores...
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