ABSTRACT
This chapter focuses on theories that seek to explain how the pursuit of novel processes and products occurs and influences the comparative prosperity of different regions. Innovation activity— particularly that associated with technology-intensive industries— is highly uneven geographically implicit or explicit in various models of interactive innovation and evolutionary economic thought are the three core elements of innovation systems: actors, networks, and institutions. Theories of regional innovation systems have their origins in the theory of national innovation systems (NIS), which developed in the 1980s as a way of formulating competitiveness strategies and policies to advance economic and societal learning and innovation and, therefore, economic growth. Territorial innovation models incorporate many of the locational dynamics explored in theories of regional innovation systems and flexible specialization. Traditional economic development practice focuses on the needs of individual firms, in terms of assistance for locating sites, providing worker training, and constructing and maintaining infrastructure.
