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Robert Huggins and Hiro Izushi

This chapter provides an introduction to some of the contemporary theoretical perspectives on innovation and productivity growth, and highlights a range of knowledge gaps relating to theories concerning endogenous growth processes, institutions, as well as behavioural theories relating to both cultural and psychological explanations. It is suggested that both behavioural and institutional-based conceptual frameworks can usefully complement existing theories of innovation and productivity growth. The chapter illustrates that to fully explore differences in innovation and productivity growth there is a need to understand how these differences stem from the behaviour of a range of human agents, and the extent to which this behaviour emerges from particular socio-spatial cultural traits and psychological traits. The chapter outlines the knowledge gaps relating to the role of cultural and psychological aspects in helping us understand why particular agents may possess a proclivity towards fostering innovation, as well as how the interactions between cultural and psychology factors result in behavioural systems with a higher or lower tendency to sustain long-term productivity growth.