ABSTRACT
This chapter draws on a wide theoretical literature from economic geography, regional development and innovation studies and gives a theoretical background. The theoretical perspective represents an improved platform for policy makers, for formulating and implementing more adequate strategies for promoting economic and social development, by exploiting the potentials of regions in the globalising knowledge economy. In the globalising knowledge economy, imitation and adaptation is no longer a sufficient strategy for creating unique competitive advantages. New research confirms that combining the two modes of innovation seems to be most efficient with regard to improving economic performance and competitiveness, that is firms that have used the Science, Technology, Innovation (STI) mode intensively may benefit from paying more attention to the Doing, Using, Interacting (DUI) mode and vice versa. In a globalising knowledge economy, understanding innovation as interactive learning implies that co-operation is necessary to make firms and regions competitive.
