The Handbook of Global Science, Technology, and Innovation

Chapter 13Harnessing the Geography of Innovation: Toward Evidence-Based Economic Development Policy

Maryann P. Feldman and Jongmin Choi

Introduction

Policies to promote entrepreneurship and innovation within geographically defined industrial concentrations have become a dominant economic development strategy. A myriad of initiatives attempt to capture the higher than average wages and productivity associated with agglomeration economies. The Obama Administration, the European Union, and the Chinese government all have national policy initiatives with specific territorial objectives (Dühr, Colomb, and Nadin 2010; Kostka and Mol 2013; Yu and Jackson 2011). More local levels of government, recognizing that the locus of innovative activity is decidedly smaller scale, also attempt to create technology-based economic development to secure their community’s economic future (Feldman, Lanahan, and Lendel 2013). Despite good intentions and the investment of large sums of public funds, empirical evidence on the impact of government cluster-based initiatives is disappointing (cf. Lerner 2009). There is an urgent need to clarify the underlying nature of agglomeration economies, the logic of economic development, and the role of government investment. The counterintuitive policy implication is that rather than specific targeted initiatives, broad investment gives rise to agglomeration economies and creates the conditions that allow industries and innovation to flourish.

This chapter will ...