The geography of innovation

Abstract

This chapter surveys the topic of the geography of innovation - not the economics of innovation - and asks several questions: What is innovation? Who innovates? Where do they learn to innovate? The research focus has shifted from innovation and technology to the broader issues of knowledge and innovative capability. The empirical literature has been much narrower in scope, previously focusing on research and development (R&D) and now rarely looking beyond patents. The chapter surveys a broader set of innovation indicators - inputs, outputs, and hidden innovation, much of which is uncovered in large-scale surveys. Empirically, there is a global shift in innovative capability toward Asia, primarily in R&D (but less so in basic research) and in process innovation related to manufacturing. The overall pattern is one of persistent spatial concentration. As a result, a thriving business has emerged to craft policies to enhance innovation and to “construct advantage” in an uncertain competitive landscape. Finally, the actors in innovation include not only individual scientists and inventors but also the organizations that employ them, such as universities and firms. It is entrepreneurs who largely determine how innovation is exploited. The fruitful concept of the knowledge filter and the role of entrepreneurship and the geography of entrepreneurship provide clues to the patterns seen.