Knowledge-Based Industry for Promoting Growth
This chapter explores the role of knowledge-based industries in promoting regional growth and to derive some directions for regional and industrial policy to promote growth in the new circumstances. It argues that human resources and institutions are of most importance in framing policies to achieve the structural shift. New job creation is predominantly occurring in knowledge-intensive economic activities, which include both the knowledge industry and knowledge-based industry. Knowledge is a crucial and well-recognised factor for advancing economic and social development. The model of national or sector scale knowledge production functions, formalised by Z. Griliches, also supports the positive relationship between knowledge and development. Product life cycle and global commodity chain models suggest that key location factors differ from one stage of the cycle to another as the importance of new knowledge inputs changes. To promote regional growth, in the knowledge-based economy, institutional reform is required.