Regional Innovation Transitions

Abstract

As an economy undergoes structural change, the focus of innovation changes to different technologies and different industries. Innovation is uneven over time and over places, leading to a tendency for incomes to diverge between innovative places and less innovative places, and to selectivity or turbulence in the pattern of employment and income change from one period to the next. This is the problem of the “innovation transitions” of regional economies. The author carries out a detailed comparative study of two regions—Greater Los Angeles and the San Francisco Bay Area—from 1970 forward, exploring why one region was more successful in its innovation transition than the other. He argues that the staples of urban and regional economics and economic geography offer only partial explanations, and that the divergent outcomes observed are better accounted for by different institutional factors that he labels the “relational infrastructure” of the two regions.