This monthly selection of articles has been carried out by Philippe Gugler and Damiano Lepori, the Center for Competitiveness, University of Fribourg. The entire selection, carried out since 2013, can be consulted on the academic articles page of our web.

A shot in the dark? Policy influence on cluster networks

By: H. Graf, T. Broekel. Research Policy, Vol. 49, Iss. 3, 2020.

Abstract: “Cluster policies are often intended and designed to promote interaction in R&D among co-located organisations, as local knowledge interactions are perceived to be underdeveloped. In contrast to the popularity of the policy measure little is known about its impact on knowledge networks, because most scientific evaluations focus on impacts at the firm level. Using the example of the BioRegio contest, we explore cluster policy effects on local patent co-application and co-invention networks observed from 1985 to 2013, in 17 German regions. We find that the initiative increases network size and innovation activities during the funding period but not afterwards. The impact of the BioRegio contest on network cohesion is moderate. In contrast, general project-based R&D subsidisation is found to support cohesion more robustly.” [ABSTRACT FROM AUTHORS]

Understanding heterogeneous spatial production externalities as a  missing link between land-use planning and urban economic futures

By: H. Pan, T. Yang, Y. Jin, S. Dall'Erba, G. Hewings. Regional Studies, DOI: 10.1080/00343404.2019.1701186, 2020.

Abstract: “Land-use planning influences economic performance as it can intervene with location-specific and heterogeneous production externalities. This paper examines the impacts of heterogeneous externalities on local employment growth using a panel model framework with block-level land-use data inventory for Chicago. Cross-industry spillovers provide positive impacts on growth, but the mechanisms behind them differ across sectors and spatial scales. Improved understanding of heterogeneity in agglomeration economies can better support plan-making and urban economic performance. The results show significant and positive influence of cross-industry spillovers, a missing consideration in existing planning processes.” [ABSTRACT FROM AUTHORS]

On the concentration of innovation in top cities in the digital age

By: C. Paunov, D. Guellec, N. El-Mallakh, S. Planes-Satorra, L. Nüse. OECD Science, Technology and Innovation, Policy Papers, No. 85, 2019.

Abstract: “This paper investigates how digital technologies have shaped the concentration of inventive activity in cities across 30 OECD countries. It finds that patenting is highly concentrated: from 2010 to 2014, 10% of cities accounted for 64% of patent applications to the European Patent Office, with the top five (Tokyo, Seoul, San Francisco, Higashiosaka and Paris) representing 21.8% of applications. The share of the top cities in total patenting increased modestly from 1995 to 2014. Digital technology patent applications are more concentrated in top cities than applications in other technology fields. In the United States, which has led digital technology deployment, the concentration of patent applications in top cities increased more than in Japan and Europe over the two decades. Econometric results confirm that digital technology relates positively to patenting activities in cities and that it benefits top cities, in particular, thereby strengthening the concentration of innovation in these cities.” [ABSTRACT FROM AUTHORS]

Tied in: the Global Network of Local Innovation

By: E. Miguelez, J. Raffo, C. Chacua, M. Coda-Zabetta, D. Yin, F. Lissoni, G. Tarasconi. Cahiers du GREThA, No. 2019-16, 2019.

Abstract: “In this paper we exploit a unique and rich dataset of patent applications and scientific publications in order to answer several questions concerned with two current phenomena on the way knowledge is produced and shared worldwide: its geographical spread at the international level and its spatial concentration in few worldwide geographical hotspots. We find that the production of patents and scientific publications has spread geographically to several countries, and has not kept within the traditional knowledge producing economies (Western Europe, Japan and the U.S.). We observe that part of this partial geographical spread of knowledge activities is due to the setting up of Global Innovation Networks, first toward more traditional innovative countries, and then towards emerging economies too. Yet, despite the increasing worldwide spread of knowledge production, we do not see the same spreading process within countries, and even we see some increased concentration in some of them. This may have, of course, important distributional consequences within countries. Moreover, these selected areas also concentrate a large and increasing connectivity, within their own country to other hotspots, and across countries through Global Innovation Networks.” [ABSTRACT FROM AUTHORS]

Tales of the city: what do agglomeration cases tell us about  agglomeration in general?

By: G. Faggio, O. Silva, W. C. Strange. LSE, Centre for Economic Performance, CEP Discussion Paper No. 1619, 2019.

Abstract: “This paper considers the heterogeneous microfoundations of agglomeration economies. It studies the co-location of industries to look for evidence of labor pooling, input sharing, and knowledge spillovers. The novel contribution of the paper is that it estimates single-industry models using a common empirical framework that exploits the cross-sectional variation in how one industry co-locates with the other industries in the economy. This unified approach yields evidence on the relative importance of the Marshallian microfoundations at the single-industry level, allowing for like-for-like cross-industry comparisons on the determinants of agglomeration. Using UK data, we estimate such microfoundations models for 97 manufacturing sectors, including the classic agglomeration cases of automobiles, computers, cutlery, and textiles. These four cases – as with all of the individual industry models we estimate – clearly show the importance of the Marshallian forces. However, they also highlight how the importance of these forces varies across industries – implying that extrapolation from cases should be viewed with caution. The paper concludes with an investigation of the pattern of heterogeneity. The degree of an industry’s clustering (localization), dynamism, incumbent firm size, and worker education are shown to contribute to the pattern of heterogeneous microfoundations.” [ABSTRACT FROM AUTHORS]

The unintended consequences of increasing returns to scale in  geographical economics

By: S. Bond-Smith. Bankwest Curtin Economics Centre Working Paper Series No. 19/04, ISSN: 2202-2791, 2019.

Abstract: “Increasing returns to scale is now fundamental to both economics and economic geography. But first generation theories of endogenous growth imply an empirically-refuted scale effect. This scale effect and assumptions to negate the scale effect both imply unintentional spatial consequences. A review of the broad economic geography literature reveals the wide- spread use and misuse of first generation and semi-endogenous growth techniques despite these distortions. Techniques are suggested for avoiding these unintended spatial consequences. Crucially, the scale-neutral Schumpeterian branch of endogenous growth theory enables research in economic geography to focus on the distinctly spatial mechanisms that define the spatial economy.” [ABSTRACT FROM AUTHOR]

Global networks, local specialization and regional patterns of  innovation

By: A. Ascani, L. Bettarelli, L. Resmini, P.-A. Balland. Utrecht University, Papers in Evolutionary Economic Geography No. 20.02, 2020.

Abstract: “A large academic consensus exists on the idea that successful innovative processes are geographically bounded within regions. Nevertheless, the ability of regions to capture and re-use external knowledge is also regarded as a fundamental element to sustain and refine the local profile of specialisation and competitiveness. The present article combines these views to investigate the sources of the regional innovation process, by analysing data on Italian regions over the period 2007-2012. We define regional external networks based on all the foreign subsidiaries of local multinational enterprises identifiable as global ultimate owners. Our main results suggest that both the internal specialisation and the outward networks can generate indigenous innovation, but the role of the networks varies substantially according to its density, its degree of complementarity with the specialisation profile, its geographical spread and the specific location of the foreign subsidiaries. Our results, then, support a view of the regional innovation as an interactive process whereby valuable knowledge resources are not only generated within the reach of the local economy, but they are also integrated with external inputs. This contrasts with recent anti-globalisation views according to which the increase in the foreign operations of national companies impoverishes the local economy.” [ABSTRACT FROM AUTHORS]

A multi-sector model of relatedness, growth and industry clustering

By: S. Bond-Smith, P. McCann. Bankwest Curtin Economics Centre Working Paper Series No. 19/03, ISSN: 2202-2791, 2019.

Abstract: “This article builds an understanding of regional innovation specialization by developing a multi-sector model with endogenous growth through quality improving innovations and spillovers from related technologies. The model provides an approach to incorporate the relatedness literature within the mainstream theoretical frameworks of endogenous growth and economic geography. Each firm’s technology sector and the location of other firms play a role in each firm’s ability to improve its own technology. As a result, firms prefer to co-locate in technologically compatible clusters. Without relying on scale assumptions, the model for the first time coherently links related variety knowledge spillovers to mainstream urban economic frameworks and demonstrates that clustering is possible in both core and peripheral areas.” [ABSTRACT FROM AUTHORS]

Recovery or stagnation?: Britain’s older industrial towns since the  recession

By: C. Beatty. Regional Studies, DOI: 10.1080/00343404.2019.1699651, 2020.

Abstract: “Britain’s older industrial towns have long been known to face economic problems. However, in the aftermath of the recession triggered by the 2008 financial crisis, recorded unemployment in the towns has fallen to relatively low levels. This paper deploys labour market accounts to measure the contributions of changing levels of employment, population, national and international migration, commuting, and labour market participation to the pattern of change in the towns in the period 2010–16. It also places older industrial towns in their regional context by comparing recent trends in the towns with those in the main regional cities, London and the UK as a whole. The paper concludes that the reduction in recorded unemployment since 2010 paints an overly positive picture of labour market trends in Britain’s older industrial towns.” [ABSTRACT FROM AUTHOR]

Place marketing, policy integration and governance complexity: an  analytical framework for FDI promotion

By: C. Pasquinelli, R. Vuignier. European Planning Studies, DOI: 10.1080/09654313.2019.1701295, 2020.

Abstract: “This paper focuses on the marketing of regions and cities within the global market for foreign direct investments (FDIs). In a context in which place marketing and place branding are employed as tools for local and regional development, this paper aims to discuss, within the broader place marketing and branding discourse, the extent to which FDI promotion has evolved in pursuit of the relative economic prosperity of local communities. In so doing, this paper investigates the evolution of FDI promotion and its degree of integration with diverse local policy domains. The cases of Ontario (Canada), Tuscany (Italy) and Western Switzerland are taken as illustrative examples of the intertwining of the three dimensions that this paper identifies as fundamental to the analysis of FDI promotion, namely (a) FDI policy generation, (b) the relationship of place branding and place marketing and (c) governance complexity. In light of the results, the relation between FDI promotion and strategic planning is discussed, by drawing attention to critical aspects of policy integration.” [ABSTRACT FROM AUTHORS]

Favourable social innovation ecosystem(s)? – An explorative approach

By: J. Terstriep, D. Rehfeld, M. Kleverbeck. European Planning Studies, DOI: 10.1080/09654313.2019.1708868, 2020.

Abstract: “Questioning the purely business-orientated, technology-centred use of the term ‘innovation’, research on social innovation has gained momentum in recent years. While significant progress has been made as regards the theoretical foundation of social innovation, the ‘ecosystem’ facilitating respective innovative activities remains rather vague and ambiguous. Most research informing our understanding draws on related but distinct concepts, such as Regional Innovation Systems (RIS). Following on from this debate, this article reflects on common features and differences between social innovation and other forms of innovation, and the resulting requirements for a Social Innovation Ecosystem (SIES). Drawing on data from the two European research projects, SIMPACT and SI-DRIVE, the article reflects on SIES from the perspective of RIS as an analytical framework, and strategic and management concept. It is argued that, due to a multiplicity of social innovation activities and their local embeddedness, no best solution for SIES exists. We posit that establishing a SIES necessitates (1) a mode of governance that integrates actors from civil society, and the social, economic and academic field; (2) social innovation hubs, labs and transfer centres as intermediaries that accelerate social innovation activities; and (3) the integration of different modes of innovation in transformational innovation strategies.” [ABSTRACT FROM AUTHORS]