ABSTRACT
This chapter focuses on agglomeration in economic and geographical science, as well as policy initiatives, is still far from unanimous accepted theory fruitful for policy and planning. It argues that the frameworks of new trade and new growth theory are in concordance with dynamic externalities and endogenous growth theory in many ways, leading to common applicable and testable hypotheses of economic growth performance of firms and industries in relation to agglomeration economies. The chapter discusses the relation between spatial development, technology and innovation. It describes from a more interdisciplinary perspective, applications within the 'new industrial geography' discipline, towards institutional, social and organizational theories. The chapter summarizes the notions of localization and urbanization economies respectively. It also focuses on dynamic interpretations of the concepts as being adopted in economic theory. Urbanization economies reflect external economies passed to enterprises as a result of savings from the large-scale operation of the agglomeration or city as a whole, independent from industry structure.
