ABSTRACT
The increasing economic integration of Europe, if not the world, that is 'globalization', clearly results in rising competition between firms and regions. Unlike the 'old' interregional division oflabour, the new rivalry of firms and regions focuses on innovations and access to knowledge resources to gain competitive advantage that is at least temporarily monopolistic. Cities play a crucial role in this process, not only because they spatially concentrate people and firms, such as clients, suppliers, and competitors, but also because they are focal points in knowledge production and diffusion. The theoretical approaches to the organization of knowledge, the growth of an urban economy and the changing role of cities in globalization are still unclear. In the debate about cities as centres of the production, or at least of the diffusion of innovations, urban knowledge spillovers are considered the principal motor for economic growth. It is said that knowledge spillovers are a particular form of external (urban) advantages to firms that improve their innovativeness and competitiveness.
