Regional systems of innovation an evolutionary per

EnvironmentandPlanningA1998,volume30,pages1563-1584Regionalsystemsofinnovation:anevolutionaryperspectivePCookeCentreforAdvancedStudies,UniversityofWales,Cardiff,33CorbettRoad,CardiffCF13EB,Wales;e-mail:[e-mail],GEtxebarriaDepartmentofAppliedEconomics,UniversityoftheBasqueCountry,AvenidaLehendakariAguirre83,48015Bilbao,Spain;e-mail:[e-mail]3January1997;inrevisedform31May1997Abstract.Theauthorsdeveloptheconceptofregionalsystemsofinnovationandrelateittopreexistingresearchonnationalsystemsofinnovation.Theyarguethatworkconductedinthe'newregionalscience'fieldiscomplementarytosystemsofinnovationapproaches.Theyseektolinknewregionalworktoevolutionaryeconomics,andargueforthedevelopmentofevolutionaryregionalscience.Commonelementsofinteresttoevolutionaryinnovationresearchandnewregionalscienceareimportantinunderstandingprocessesofagglomeration,trustbuilding,innovation,institutions,andlearninginregionalsystems.Theauthorsdevelopanalyticalframeworksfordesignatingregionalsystemsofinnovationintermsofdistinctionbetweeninstitutionsandorganisations,hardandsoftinfrastructures,andtheculturalsuperstructure.Theyconcludethatanevolutionaryapproachassistsunderstandingofregionalpotentialfordevelopingsystemicinnovation.IntroductionInthispaperweexplorethecaseforregionalsystemsofinnovation(RSIs).Weaimtounifyimportantelementsofrecentresearchinwhatmaybetermed'thenewregionalscience'(forexample,seeAminandThrift,1994;Asheim,1996;Cooke,1995;1997;CookeandMorgan,1993;Florida,1995;Gertler,1995;Grabher,1993;Herrigel,1996;Maillat,1995;MalmbergandMaskell,1997;Morgan,1997;Sabel,1995;Saxenian,1994;Scott,1996;StorperandScott,1995).Althoughthisworkcontainsconsiderablevariety,italsosharesnumerouscomplementarities.Amongstthemoreprominentoftheseare:astressupontherecentriseinimportanceofregionsasfociforglobaleconomiccompetitivenessonthepartoffirms;anemphasisupontheimportanceoftheinstitutionalsettingofnorms,routines,andconventionsconcerningtheorganisa­tional-supportinfrastructureforregionaleconomiccompetitiveness;arecognitionofinformalnetworksaswellasmoreformalorganisationsasmechanismsforsustaininghigh-trustrelationshipswhichcanbeusedtominimisetransactioncostsamongstfirms:areevaluationoftheimportanceofgeographicalproximityoragglomerationcharac­teristics,forfacilitatinginnovativetacit-knowledgeexchangeandotherexternalities;andarecognitionoftheimportanceofaninstitutionalandorganisationallearningpropensitytoregionaleconomicperformance.Thisversionofaculturalturnineconomicgeographyresonateswellwithtwootherstrongtheoreticalandprogrammatictrendsbeyondthepresentconfinesofregionalscience.Thefirstconcernsthecoalescenceofneoinstitutionalandneo-Schumpeterianeconomictheorytoformadistinctiveevolutionaryeconomictheory.BringingtogetherworkfromsuchdiverseproponentsofneoinstitutionalismasNorth(1993)andHodgson(1988)—onewithastrongneoclassicaleconomicheritage,theotherjourneyingfromMarxismtowardsevolutionism—andneo-SchumpeterianssuchasNelsonandWinter(1982),Freeman(1987),andRosenberg(1976)—anewheterodoxyhasbeenestablished.1564PCooke,MGUranga,GEtxebarriaThisisatitsstrongestandmostcoherentwhendeployedasacritiqueofneoclassicaleconomics.Aflavourofthequalityofthisissuppliedinthefollowingquotation:Ifallindividualplans,whichhavebeenmaximisedonthebasisofmarketprices,productionfunctionsandinitialendowments,aremutuallycompatibleinequilib­riumasrequiredbydefinition,thenthereis,byvirtueofsimultaneousoptimisationunderperfectinformation,nofurtherincentivetodeviatefromthechosenindividualplans....Importantaspectsofthechangeswhichcanbeobservedinmodern,rapidlyalteringeconomies,changeswhichdistinguishthemfrompre-moderneconomies,wouldsimplybeinaccessibletoeconomictheory.Thiswould,forexample,bethecaseforentrepreneurialactivities,technologicalprogress,changingpreferencesandnewlyemerginginstitutions(Witt,1991,page87).Inotherwords,neoclassicaleconomictheorycannotbeusedtotackleitscentralobjectsofinterest.Ofcourse,theneoclassicalschoolhasnottakenthislyingdown.Thenewneo-classicistssuchasLucas(1988),Romer(1990)andKrugman(1995)haverespondedwith'newgrowththeory',ostensiblyrelaxingmostoftheassumptionsnotedabove.ThusLucasdevelopedamodelinwhichthesourceofendogenousgrowthishumancapitalaccumulatedthroughlearningbydoing;Romerhasdevelopedamodelinwhichintentionalinvestmentintechnologyisconductedunderconditionsofimperfectcompe­titionandwithincreasingreturnstoscale(thatis,monopoly);andKrugmanhasfurtherdeployedtheserelaxedassumptionstodevelopamodelofthegrowthofagglomeration(mainlycities)intermsofdisequilibrium,cumulativecausation,andmonopolypracticesofeconomicagents.However,asFreeman(1994)notes,thesemodelscannotaccountfororganisationalchangeortherelationshipsbetweeninstitutional,technical,andinvestmentchange,andtothatextenttheysufferfromthesameproblemsasdoesoldneoclassicalgrowththeory.Onelargeandveryimportantareaofagreementbetweenthenewneoclassicistsandtheevolutionistsisthatinnovation,intheSchumpeterian(1975)senseofproduct,process,andorganisationalinnovation,accountsforaverylargeamount,p