The Successful Transition to a Knowledge‐Based Development Path of a Less‐Developed Region

This paper presents the case of a less‐developed EU region—the Pomeranian region of Poland—that is, an example of the successful transformation from a command to market economy and the creation of a new knowledge‐based development path thanks to the upgrading of its innovation model. This successful transformation was based, in part, on the region's specific innovation policy and the activities of pro‐innovative institutions; however, other factors were also important such as the diversified structure of the region's economy. New knowledge‐based industries have developed in the region, while the potential of traditional industries that have gone through a restructuring, has been maintained. The factors that existed prior to the innovation model's transformation included such aspects as the high quality of human and social capital, a strong academic center, a high quality of life, and an open economy and society. Supply factors in the form of qualified personnel were crucial for the growth of employment in new industries and R&D that determined the improvement of the regional GDP per capita. Moreover, the transition to a knowledge‐based economy stimulated an increase in the concentration of population in the metropolitan area of Tri‐City.     

The geographically variegated connections of the Jakarta metropolitan area as produced by manufacturing firms

Connectivity in urban networks is often deemed to be an important feature of economically vibrant cities. Under conditions of contemporary globalization, the importance and geographies of these connections are increasingly variegated. Accordingly, various attempts have been made to analyse the external relations of cities and metropolitan regions, often through the lens of multilocational firms. Our purpose in this paper is to address the to‐date limited empirical knowledge about whether firms originating from different regions (i.e., firms with different headquarter [HQ] locations) create different patterns of inter‐urban relations. Drawing on the interlocking network model and using the Jakarta metropolitan area (JMA) as a case study, this paper explores how manufacturing firms with HQs either inside (further differentiating between the JMA and other cities) or outside (further differentiating between East Asian and non‐East Asian countries) Indonesia produce different patterns of external relations. Our findings indicate that each category of firms generates unique configurations of interurban relations for the JMA at the global and national scales. We argue that these variegated networks patterns not only reflect different locational strategies of firms, but also Indonesia's evolving policy orientations which have complex relations with evolving patterns of economic globalization.     

Behind the Pan‐European Convergence Path: The Role of Innovation,Specialisation and Socio‐economic Factors

The paper analyses the determinants of regional disparities in per capita gross domestic product (GDP) and their evolution over time in the enlarged European Union (EU). With reference to the literature it groups EU regions on the basis of three different factors—specialisation, socio‐economic features, and innovation. It then analyses regional disparities in per capita GDP (EU‐relative and country‐relative) across groups over 2004–2011 using both non‐parametric tools and traditional regression analysis with spatial effects. The paper finds that EU‐wide convergence actually conceals growing divergence across old member regions and within new members. Coming to the factors that lie at the heart of regional disparities, country factors lose importance for newcomers but become more important for older members, notwithstanding longstanding integration. Socio‐economic factors and innovation instead become increasingly important for all areas, socio‐economic factors lying at the heart of within‐country differences and innovation more of those between regions. Finally, specialisation appears to have a lower explanatory power.     

Knowledge Networks in an Uncompetitive Region: SME Innovation and Growth

Knowledge networks are now recognised as a crucial element underlying the economic success and competitiveness of geographic locations, in particular regions. The aim of this paper is to assess the types of knowledge networks utilised and formed by knowledge‐based small‐ and medium‐sized enterprises (SMEs) in the relatively uncompetitive regional setting of Yorkshire and Humberside in the UK. It explores the relationship between knowledge networking activity and the levels of innovation and growth achieved by these SMEs. It is found that SMEs tend to utilise and value more knowledge networks with actors outside the region. However, more innovative SMEs possess a balance of inside and outside the region knowledge networks. Knowledge networking activity is sometimes negatively associated with growth, suggesting that networks with certain actors, such as public sector support agencies, may be formed by SMEs when they are facing competitive pressures. In terms of policy implications, the paper recommends a shift from the cluster policies implemented by many regional authorities to a regional innovation systems approach, focusing equally on the regional and more global dimensions of knowledge networks. It is concluded that regional public policy makers need to renew their efforts to support SMEs in creating and sustaining their knowledge networks.     

Innovating in less developed regions: What drives patenting in the lagging regions of Europe and North America

Not all economically disadvantaged—“less developed” or “lagging”—regions are the same. They are, however, often bundled together for the purposes of innovation policy design and implementation. This paper attempts to determine whether such bundling is warranted by conducting a regional level investigation for Canada, the United States, on the one hand, and Europe, on the other, to (a) identify the structural and socioeconomic factors that drive patenting in the less developed regions of North America and Europe, respectively; and (b) explore how these factors differ between the two contexts. The empirical analysis, estimated using a mixed‐model approach, reveals that, while there are similarities between the drivers of innovation in North America's and Europe's lagging regions, a number of important differences between the two continents prevail. The analysis also indicates that the territorial processes of innovation in North America's and Europe's less developed regions are more similar to those of their more developed counterparts than to one another.     

Revisiting the Roles of the University in Regional Economic Development: A Triangulation of Data

There is a general understanding that university plays a crucial role in regional development under the current age of knowledge economy. At the same time, we have observed a fair number of counter‐evidentiary studies, demonstrating several regions that do not thrive despite strong research universities or other patterns of development in the absence of research universities. However, they are based on case studies of individual universities or regions, and the findings currently cannot be generalized. Another set of studies that have challenged the effect of universities at the nationwide scale and demonstrated its disproportionately small impact of universities, but their scope is limited to spin‐offs, patents, and license activities. In this article, we propose to investigate this subject more systematically by triangulating three methods: 1) national‐scale regression models with Business Dynamics Statistics and National Establishment Time Series data, 2) a regional survey of IT and life science firms in four so‐called “second tier regions,” and 3) a microeconomic firm‐level analysis based on interviews with founders of technology intensive firms. Furthermore, we test the roles of university beyond those explicit, direct measures of spin‐offs and patents by analyzing the firm formation rate and firm growth rate at the regional level, as well as the sources of growth at the company level. All results point in the same direction: The research function of the university has been overstated, and the teaching function of the university has been underappreciated. These findings provide profound implications for the policy of regional development.     

Design,National Imaginaries,and the Home Furnishings Commodity Chain

ABSTRACT This paper introduces the concept of national imaginaries as a means of foregrounding the continuing influence of ideas about the nation on understandings of commodity production and circulation. National imaginaries are of crucial importance to the home furnishings commodity network, flowing across sites of consumption, retailing, design, and production. Drawing upon the findings of a larger cross‐national research project, the paper discusses three cases in which the characterisation of distinctive national design identities was particularly prominent. These include the representation of designers in the UK and Canada as “national heroes,” and the tendency to measure British and Canadian design against a third national imaginary: that of Italy. A final case considers discursive constructions of national economic trajectories—of “success” or “failure”—within accounts of the British and Canadian furniture industries. It is argued that future work on the differentiating advantages, which may accrue to creative or cultural industries in particular localities, also should be attentive to the ways in which the place of the nation is used to construct imaginative geographies.     

European Regional Convergence Revisited: A Weighted Least Squares Approach

A plethora of past studies have concluded that unconditional β‐convergence is present in a broad sample of regions, implying that poor regions grow faster than rich ones. All these econometric studies tend to overlook the relative importance or size of each region in the national setting, treating all regional observations as equal. However, this assumption might lead to unrealistic or misleading results. Convergence analysis could be more meaningful if it included a weighting mechanism taking into account the size of regions. The aim of this paper is to investigate whether the inclusion of a weighting mechanism in β‐convergence analysis, giving more weight to larger regions and less to smaller ones, can result in sharply different implications for the regional convergence‐divergence process. For this reason, both unweighted ordinary least squares (OLS) and weighted least squares estimators are used in the analysis of regional (intra‐national) convergence within 10 European Union (EU) countries over the period 1990–2000. The comparison between the two methods reveals that when regions are appropriately weighted for their size, intra‐national divergence, rather than convergence found with the OLS approach, seems to be the dominant experience in the EU.     

Institutional context and place-based policy: The case of Coventry & Warwickshire

A key problem of downscaling or transferring policies across regions is embedding these policies into a place for them to unleash the full potential of regional economies. This paper elaborates on the analytical framework of “institutional context” to bridge the gap between rich theorizations and poor empirical capture of institutions in studies of regional development. The institutional context is constituted by three pillars—regulations, organizations, and institutions—as well as by the interrelations between these pillars. Applied to the British region of Coventry and Warwickshire, a qualitative analysis of expert interviews finds institutional patterns of short-termism, moderate levels of social capital and an embryonic relational infrastructure to constrain the place-based strategy for industrial diversification. This regional case illustrates the more general challenge for regional policy in the UK of devising place-based strategies under conditions of continuous rescaling of regional governance and the implementation of a new National Industrial Strategy. In conclusion, the analysis suggests a shift from “nodal” to “linking” policies that support cross-network connections and help grow a regional field for collective action to cross-fertilize knowledge and foster innovation and entrepreneurship in emerging industries.     

Mapping Regional and Sectoral Characteristics of Knowledge‐Intensive Business Services: Evidence from the Province of Quebec (Canada)

ABSTRACT The study presents original evidence on the characteristic features and innovation activities of knowledge‐intensive business services (KIBS). Based on a wide‐scale survey of 1,124 KIBS firms in Quebec (Canada), we explore empirically the extent to which KIBS from various sectors and regions differ in their characteristics and their uses of innovation practices. The results from the sectoral analysis reveal that KIBS display different characteristic features and innovation behaviours across sectors, thus suggesting that inter‐sectoral differences are important when explaining innovation activities in KIBS. The comparison between KIBS in large, medium, central, and resource regions shows that the characteristic features and the innovativeness of KIBS are rather similar, and little or no significant statistical differences were found between the different regions in the province of Quebec. Thus, overall, the results of our study seem to suggest that a location does not tend to make a difference in respect to characteristic features and innovation performance of KIBS.     

Innovative and Competitive Structure of Regional Economies in Turkey

Regional development theories have experienced a transition from Keynesian state‐led economic development models to development based on public–private partnerships, innovation, industrial districts, etc. With the increasing concern for innovative milieu, products, process, organizational, and institutional innovations have assumed an important place in regional development policies. All these regional development paradigms have formed the basis of the initiation of a new process in regional development called the new regionalism, which includes cumulative efforts to revitalize local economic growth. In this paper, we identify technological levels of 26 NUTS 2‐level regions according to the Organisation for Economic Co‐operation and Development (OECD)'s classification. Then, we develop an innovation and competitiveness index for Turkey by employing principal component analysis. In conclusion, we formulate some workable policy solutions and suggestions for regional economies in Turkey. According to the results, Istanbul is the most innovative and competitive region in Turkey. Ankara is becoming a regional knowledge cluster, thanks to its strong R&D infrastructure and highly qualified researchers.     

Firm Networks and Korean Subsidiaries in the United States

ABSTRACT This article examines the role of intra‐, inter‐, and extra‐firm networks in influencing the location and investment of Korean firms and their subsidiaries in the U.S. Based on a survey of Korean subsidiaries in the U.S. in 2004, this article finds that inter‐firm relations with customers and suppliers, as well as intra‐firm relations in the form of parent firms’ knowledge of the U.S. play an important role in locational decision. Korean subsidiaries’ relationships with U.S. places are strongly influenced by home‐based practices that favor hierarchical intra‐firm organization and embedded sociopolitical extra‐firm relationships that emphasize blood, school, and regional ties. Location in U.S. industrial clusters does not increase Korean subsidiaries’ level of autonomy from parent firm's control that could help facilitate the sourcing of local knowledge and resources. Only improved intra‐firm network positionality positively contributes to increased subsidiary autonomy. Overall, the findings indicate that while inter‐firm relations may be important in locational selection among Korean firms, network norms are largely maintained through intra‐firm and, to a lesser extent, extra‐firm relations.     

Who leads regional industrial dynamics? “New industry creators” in Chinese regions

Recent evolutionary economic geography studies have argued that regional diversification emerges as a path‐dependent process, as regions often branch into industries that are related to its industrial structure. However, it is less clear who are creating new industries and under what regional conditions. This research seeks to fill this gap and identify “new industry creators” in regional industrial diversification. We differentiate two types of new industry formation—path‐breaking and path‐dependent—and examine whether some new industry creators are more path‐breaking than others, by incorporating two factors that have been largely overlooked in recent literature on technological relatedness—firm heterogeneity and regional institutions. Based on a firm‐level data set of China’s manufacturing industries, this paper shows that path‐breaking and path‐dependence coexist. Empirical results confirm that firm heterogeneity and regional institutions not only affect the firms’ capabilities in creating new industries, but also encourage/discourage firms to be adventurous and path‐breaking. This research implies that lagging regions can catch up with developed regions by coordinating regional resources and adjusting local institutional arrangements to attract more path‐breaking firms.     

Innovation Prone and Innovation Averse Societies: Economic Performance in Europe

Although it is commonly accepted that investing in technology and research and development (R&D) is a basic catalyst for the genesis of economic activity, there is less consensus on the spatial significance and returns of the R&D effort for regional and local economies. It is often argued that innovation resulting from allocating local resources to R&D is likely to spill over to other areas, especially in the framework of open national economies. Hence, the incentive to free-ride increases at the subnational level. This paper shows, however, that in the Western European regional context, regions with higher resources devoted to R&D tend to grow at a greater pace than the remaining spaces. Nevertheless, the passage from R&D to innovation and growth is not achieved in a similar way across Europe. Local social conditions play an important role in the formation of what can be defined as ‘innovation prone’ and ‘innovation averse’ societies. Innovation prone regions are those featured by a weak social filter, which facilitates the transformation of innovation into growth. Conversely, regions burdened by rigid labor markets, shortage of skills, outward migration of able individuals, and an aging of the workforce are less prone to assimilate innovation and to transform it into economic activity. They make up the innovation averse societies in Europe.     

The role of national settings in the economic resilience of regions—Evidence from recessionary shocks in Europe from 1990 to 2014

This paper focuses on the particular role of the national setting for the economic resilience of regions during the resistance and recovery phase. Our empirical set-up introduces a spatial hierarchy of 249 NUTS-2 regions nested in 22 European countries while it includes numerous recessionary shocks from 1990 to 2014. Our results suggest that the impact of the national setting is strongest during the resistance phase when the national level accounts for up to 44.9% of the variance in regional GDP development. During recovery, however, the national share decreases but still amounts to no less than 22.0%. Apart from the direct effects that originate from, for example, regulatory density and fiscal policy measures, the national impact takes the form of cross-level moderation effects. These indirect effects indicate that the regional patterns of resilience are additionally shaped by the inter-linkages of country-specific institutional factors and regional determinants. Taking all this into account, regional economic resilience is anything but just a matter of regional capacities.     

Innovation and Regional Growth in the Enlarged Europe: The Role of Local Innovative Capabilities,Peripherality, and Education

ABSTRACT In this paper, a formal model for the relationship between innovation and growth in European Union regions is developed drawing upon the theoretical contribution of the systems of innovation approach. The model combines the analytical approach of the regional growth models with the insights of the systemic approach. The cross‐sectional analysis, covering all the Enlarged Europe (EU‐25) regions (for which data are available), shows that regional innovative activities (for which a specific measure is developed) play a significant role in determining differential regional growth patterns. Furthermore, the model sheds light on how geographical accessibility and human capital accumulation, by shaping the regional system of innovation, interact (in a statistically significant way) with local innovative activities, thus allowing them to be more (or less) effectively translated into economic growth. The paper shows that an increase in innovative effort is not necessarily likely to produce the same effect in all EU‐25 regions. Indeed, the empirical analysis suggests that in order to allow innovative efforts in peripheral regions to be as productive as in core areas, they need to be complemented by huge investments in human capital.     

Innovation Ideas and Regional Characteristics: Product Innovations and Export Entrepreneurship by Firms in Swedish Regions

ABSTRACT This paper focuses upon the ways in which characteristics of regions in regards to knowledge sources, communication opportunities, and absorptive capacity influence the development of innovation ideas among existing and potential entrepreneurs. We formulate a model where entrepreneurs or innovating firms introduce new products in a quasi‐temporal setting. Market conditions are characterised by monopolistic competition between varieties belonging to the same product group, in which there is entry and exit of varieties. A stochastic process is assumed to generate new innovation ideas as time goes by, and a firm (entrepreneur) who receives such an idea has to transform the idea to an innovation, which in the model is specified as a particular variety combined with a specific destination market. The theoretical model is used as a reference when formulating two regression models, with which we estimate how a set of regional characteristics are associated with the likelihood of innovation ideas across Swedish local labour market regions. In one model, we examine the emergence of new export varieties, and in the second model, we investigate the appearance of new export firms. Results are consistent with the assumption that knowledge and information flows have a positive influence on the frequency of arrival of innovation ideas to firms.     

Creative Industries and Regional Productivity Growth in the Developing Economy: Evidence from Indonesia

This paper examines the degree to which creative industries stimulate regional productivity growth in a developing country, Indonesia. The Indonesian government promotes long‐established “traditional” craft businesses as creative industries, but they pay less attention to new knowledge creation and focus on highlighting heritage values as selling points. Our findings show that the “real” creative industries are still scarce and found mostly in fairly advanced urban regions. These industries are more likely to be an indicator than a driver of regional economic development. Meanwhile, those traditional businesses are much larger than creative industries and potentially contribute to regional productivity through consumption activities, thereby requiring different policy strategies.     

Emerging geography of technological innovation in China's ICT industry: Region,inter‐firm linkages and innovative performance in a transitional economy

This study critically evaluates the relevance of the existing theory of technological innovation to the case of China's information and communications technology industry. Based on a large‐scale questionnaire survey conducted in China's three most important city‐regions, namely, Beijing, Shanghai and Shenzhen, where the core of China's information and communications technology industry is located, this study reveals a significant regional variation in technological innovation in a political economy undergoing marketisation and globalisation. This research has found no significant relationship between the innovative performance of firms and the extent of production linkages; nor was there a significant knowledge exchange among firms. A further analysis has identified the significant role played by government purchases, research and development capital input and export propensity in the process of technological innovation. The findings of this research cast doubts over the prevailing theory of ‘new economic geography’ in which soft and unbounded relational assets have been overemphasised at the expense of some solid and bounded actors and agents that are pivotal to technological innovation in a developing economy.     

Regional Innovation Clusters: A Critical Review

In this paper, we present a critical assessment of recent economic development policy directions centered on the concept of regional innovation clusters. We begin by investigating the rationale underlying the Obama administration's promotion of regional innovation clusters (RICs) and their introduction to the policy arena in its Strategy for American Innovation. The connections among RICs and existing research and policies in industry and occupational clusters, regional innovation systems and regional economic development are identified and analyzed to highlight those most critical challenges to conceptualizing and theorizing RICs. While we applaud the long overdue focus of economic development policies on sub‐national regions, we identify several major conceptual shortcomings and programmatic difficulties associated with RICs as a centerpiece for economic development strategies.