THE GEOGRAPHY OF INNOVATION REGIONAL INNOVATION SY

chapter11...................................................................................................................................................THEGEOGRAPHYOFINNOVATIONREGIONALINNOVATIONSYSTEMS...................................................................................................................................................bjØrnt.asheimmerics.gertler11.1Introduction........................................................................................................................................................................................Therearetwoparadoxicalcharacteristicsofthecontemporaryglobaleconomy.First,innovativeactivityisnotuniformlyorrandomlydistributedacrossthegeographicallandscape.Indeed,themoreknowledge-intensivetheeconomicactiv-ity,themoregeographicallyclusteredittendstobe.ThebestexamplesincludeindustriessuchasbiotechnologyorWnancialservices,whichhavebecomeevermoretightlyclusteredinasmallnumberofmajorcenters,despitetheattemptsofmanyotherplacestoattractorgeneratetheirownactivitiesinthesesectors.Second,thistendencytowardspatialconcentrationhasbecomemoremarkedovertime,notless(LeyshonandThrift1997;Feldman2001;CortrightandMayer2002).ThisrealitycontradictslongstandingpredictionsthattheincreasinguseofinformationandcommunicationtechnologieswouldleadtothedispersalofinnovativeactivityoverggppgFagerberg/TheOxfordHandbookofInnovationRevisedProof31.7.20045:38pmpage291time.Giventheseratherstrikingstylizedfacts,itwouldappearthattheprocessofknowledgeproductionexhibitsaverydistinctivegeography.Weargueinthischapterthatthisgeographyisfundamental,notincidental,totheinnovationprocessitself:thatonesimplycannotunderstandinnovationproperlyifonedoesnotappreciatethecentralroleofspatialproximityandconcentrationinthisprocess.Ourgoalistodemonstratewhythisistrue,andtoexaminehowinnovationsystemsatthesubnationalscaleplayakeypartinproducingandreproducingthisunevengeographyovertime.Thischapteraddressesfourkeyissues.First,whydoeslocation‘‘matter’’whenitcomestoinnovativeactivity?Ifoneconsiderstheproductionandcirculationofnewknowledgetobethecoreofinnovation,thenitisimportanttohaveasoundunderstandingofthenatureofthediVerenttypesofknowledgeinvolvedandtheirgeographicaltendencies.Second,whatareregionalinnovationsystems,andwhatroledotheyplayingeneratingandcirculatingnewknowledgeleadingtoinnov-ation?Third,whatistherelationshipbetweenregionalsystemsofinnovationandinstitutionalframeworksatthenationallevel?Finally,whatistherelationshipbetweenlocalandglobalknowledgeXows,andisthereanyevidencethattheglobalnatureoftoday’seconomyhasweakenedoralteredtheinXuenceofproximityonthegeographyofinnovation?11.2TypesofKnowledgeandtheirGeographies........................................................................................................................................................................................Agrowingbodyofthoughtarguesthatinacompetitiveerainwhichsuccessdependsincreasinglyupontheabilitytoproduceneworimprovedproductsandprocesses,tacitknowledgeconstitutesthemostimportantbasisforinnovation-basedvaluecreation(Pavitt2002).AsMaskellandMalmberg(1999:172)haveputit,wheneveryonehasrelativelyeasyaccesstoexplicit/codiWedknowledge,thecreationofuniquecapabilitiesandproductsdependsontheproductionanduseoftacitknowledge:Thoughoftenoverlooked,alogicalandinterestingconsequenceofthepresentdevelopmenttowardsaglobaleconomyisthatthemoreeasilycodiWable(tradable)knowledgecanbeaccessed,themorecrucialdoestacitknowledgebecomeforsustainingorenhancingthecompetitivepositionoftheWrm....Inotherwords,oneeVectoftheongoingglobalisationisthatmanypreviouslylocalisedcapabilitiesandproductionfactorsbecomeubiquities.WhatisnotubiquiWed,however,isthenon-tradable/non-codiWedresultofknowledgecreation—theembeddedtacitknowledgethatatagiventimecanonlybeproducedinpractice.TheggppgFagerberg/TheOxfordHandbookofInnovationRevisedProof31.7.20045:38pmpage292292bjØrnt.asheimandmerics.gertlerfundamentalexchangeinabilityofthistypeofknowledgeincreasesitsimportanceastheinternationalisationofmarketsproceeds.Implicitintheabovequoteisafundamentallyspatialargument:tacitknowledgeisakeydeterminantofthegeographyofinnovativeactivity.Therearetwocloselyrelatedelementstothisargument.First,becauseitdeWeseasyarticulationorcodiWcation(Polanyi1958,1966),tacitknowledgeisdiYculttoexchangeoverlongdistances.Itisheavilyimbuedwithmeaningarisingfromthesocialandinstitutionalcontextinwhichitisproduced,andthiscontext-speciWcnaturemakesitspatiallysticky(Gertler2003).Thesecondrelatestothechangingnatureoftheinnovationprocessitselfand,inparticular,thegrowingimportanceofsociallyorganizedlearningprocesses.TheargumenthereisthatinnovationhascometobebasedincreasinglyontheinteractionsandknowledgeXowsbetweeneconomicentitiessuchasWrms(customers,suppliers,competitors),researchorganizations(univer-sities,otherpublicandprivateresearchinstitutions),andpublicagencies(technol-ogytransfercenters,developmentagencies).ThisisfundamentaltoLundvallandJohnson’s(1994)learningeconomythesis,andise