Innovation policy has become a mainstay of local and regional development policy because it is believed that innovative local firms will lead to local employment and income growth. Whilst it is unlikely that a locality and region will develop without local firms being innovative, the reverse does not hold: it is possible, and indeed feasible, that many smaller localities and regions harbour innovative firms without benefiting from the growth that they induce. In the chapter the author explores the reasons why it is believed that local innovation will lead to local growth, and then outlines why this belief is erroneous: innovation in local firms can lead to employment decline (in specialized regions where labour-saving technologies are developed), and local innovators are often being bought-up or compelled to open offices and production facilities in larger and more central places if their localities do not provide the resources necessary for expansion and growth.
Innovation is assumed by many analysts to be intimately connected with cities and with clusters of economic activity. The geography of innovation – as an area of study – does not seriously examine innovation by isolated firms or in remote areas, which it considers atypical. In this chapter I argue that the evidence upon which this assumption is based is biased towards identifying innovation in clusters and urban areas, and that innovation theory contributes to this bias. I outline a theory that accounts for innovation both in urban and in remote areas, and which also accounts for the decline of many remote regions. This theory rests upon distinguishing initial firm-level innovation (that occurs similarly in urban and remote areas, as an increasing body of evidence shows) from subsequent growth and innovation diffusion (that often requires the market access and resources that cities provide). Evidence is presented that corroborates certain aspects of this theory. The chapter’s central argument is that once urban bias is overcome the geography of innovation can abandon some of its inhibiting assumptions and move in new directions.
Richard Shearmur, Christophe Carrincazeaux and David Doloreux
Many key ideas and concepts that underpin our understanding of the geography of innovation were developed in the 1980s and early 1990s. They have in common their reference to a world of limited mobility and expensive communications. Furthermore, they were developed without fully theorizing geography: it is the innovation process and firm behaviour that have been theorized, leaving geographical concepts relatively unexplored. In the chapter the authors outline some of the limits of the current way that the geography of innovation is understood. First, they argue that geography should not be approached as a canvas upon which innovation occurs, but needs to be problematized and theorized. Second, we argue that there are ambiguities – or confusions – in the object and purpose of research: if the reasons for studying the geography of innovation were better articulated, and if the type of innovative process being examined were clarified, many apparently irreconcilable observations and ideas would be found to be complementary. Finally, the authors highlight the contextuality of geographic thought and concepts: each researcher brings to the table his or her own cultural biases and beliefs, and these colour the emphasis put on particular aspects of the interconnection between space and innovation.