ABSTRACT
Over the past two decades or so the emphasis in regional economic development theory shifted from exogenous to endogenous factors. Traditional regional economic development approaches were erected on neo-classical economic growth theory, based largely on the Solow growth model (1956, 2000). New approaches while recognizing that development is framed by exogenous factors recognizes a much more significant role for endogenous forces. In this context, a suite of models and arguments that broadly convey the new growth theory are directed towards endogenous factors and processes (see, for example, Johansson, Karlsson and Stough, 2001). Those factors are seen as fundamental drivers of regional economic development arising from the resource endowments and knowledge base of a region. Endogenous factors include entrepreneurship, innovation, the adoption of new technologies, leadership, institutional capacity and capability, and learning.
