Handbook of Regional Innovation and Growth
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Handbook of Regional Innovation and Growth

Edited by Philip Cooke, Bjørn Asheim, Ron Boschma, Ron Martin, Dafna Schwartz and Franz Tödtling

Today, economic growth is widely understood to be conditioned by productivity increases which are, in turn, profoundly affected by innovation. This volume explores these key relationships between innovation and growth, bringing together experts from both fields to compile a unique Handbook.
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Chapter 14: Technological Relatedness, Related Variety and Economic Geography

Ron Boschma and Koen Frenken


Ron Boschma and Koen Frenken INTRODUCTION In economic geography, increasing attention is paid to the relevance of relatedness for learning and regional development. Relatedness between actors is thought to affect the nature and scope of knowledge spillovers. Relatedness may comprise of many dimensions, such as the cognitive, social, organizational, institutional and the geographical dimension (compare with Chapter 20 on proximity by Carrincazeaux and Coris in this Handbook). Being proximate in these dimensions will enhance the probability of agents to interact and exchange knowledge in an effective manner (Boschma, 2005). That is, distances on at least some of these dimensions need to be overcome in order to connect firms, and to enable interactive learning. In this chapter, we will concentrate on the cognitive and the geographical dimension for reasons of simplicity, but also because these two dimensions have attracted most attention in the recent empirical literature in economic geography. We briefly outline the main theoretical ideas behind the regional-economic relevance of technological relatedness, and we will present a body of empirical work in economic geography that has made an attempt to measure technological relatedness in various ways, and to test its importance for firm and regional performance. More precisely, we discuss in the next section how the notion of related variety has contributed to the literature on externalities and regional growth. In the following section, we take a more dynamic perspective on this issue, and discuss how new growth paths in regions emerge (that is, how new industries emerge and develop...

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