ABSTRACT
This volume has examined the geographical dimensions of knowledge, learning, and innovation, which are vital to economic development and growth. While it is widely acknowledged that technological change – leading to the generation, diffusion and subsequent market application of valuable economic knowledge – determines the wealth of regions and nations, we still lack a good understanding of how to best organize the multitude of resources to accommodate such innovation and realize positive welfare outcomes. After ongoing filtering and refinements for more than 20 years, there appears to be agreement in the academic literature on some stylized facts about the impact of geography on the rate and direction of knowledge creation, the spatial diffusion of knowledge spillovers, and regional innovation processes (Feldman and Kogler 2010). The underlying notion of much contemporary research is that firms strive to achieve market power through innovation by incorporating new ideas to essentially produce better goods than their competitors. Generating ideas and giving form to knowledge through innovation is best realized in those places that provide a finely tuned system that recognizes the utility of new ideas, is linked to places where such ideas are developed and understands how to augment these ideas. Innovation, in turn, results in the displacement of old goods by new ones, which earn profits for some time, until ultimately being replaced by even more profitable or higher-quality goods, and so on, in the spiral of technological progress. This process, colorfully described by Schumpeter (1942) as “creative destruction,” is an engine of economic growth. Innovation has a pronounced geographical – albeit not necessarily a local or otherwise territorial – basis that produces competitive advantages for some places/localities, their resources and capabilities.
