ABSTRACT
This chapter reports the results of a study concerned with the effect of extended factors, clustered under the term agglomeration economies, on the rate of industrial innovation. It focuses on the effect of the external variables on the firm’s rate of innovation. These external variables, which in this chapter are subsumed under the term agglomeration economies, create the local innovative milieu or the economic environment conducive to innovation. Agglomeration economies, localization and the economies of scale of the single firm are the principle forces that foster the continuous concentration of people and economic activities in some selected points in space. Data concerning innovation activity, as well as information concerning firm’s characteristics was included in the questionnaires. Regional development, as a location where technological innovation takes place, is usually accompanied by new economic activities, market expansion, and technological adaptation.
