Growth, development, and innovation: A look backward and forward
This article reviews where we have come from and where we are going in research on regional growth and development. Our object of study is the region, an imprecise term that has been taken to mean areas as large as small countries or as small as urban reg
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London School of Economics, Department of Geography and Environment, Houghton Street, London WC2A 2AE, UK (e-mail: [email protected]) The Ohio State University, Center for Urban and Regional Analysis (CURA) and Department of Geography, 154 North Oval Mall, Columbus, OH 43210, USA (e-mail: [email protected])
Abstract. This article reviews where we have come from and where we are going in research on regional growth and development. Our object of study is the region, an imprecise term that has been taken to mean areas as large as small countries or as small as urban regions, although how regions are defined does itself have implications for both theories and the empirics of regional growth. How growth occurs remains a poorly understood process. Clearly the basic ingredients of the neo-classical cookbook are important - growth in capital and labour stocks with technological change - but they are neither enough nor revealing enough. Why does the stock of capital grow at different rates? Why does the labour supply increase? What drives technical progress? What are the roots of spatial dependence? We are fairly certain that the answers to these questions embrace agglomeration economies but they also embrace much more. Innovation is associated with research and development and has an identifiable spatial pattern in relation to highly skilled labour and institutions such as universities. But innovation is not just the result of R&D but also entrepreneurship applied to investment. Labour supply responds to real wage differentials but also to environmental and other amenities. Labour is far more geographically mobile in the New World, however, than it is in the Old. JEL classification: Rll, R50 Key words: Regional growth, convergence, clusters, mobility, territorial competition 1 Introduction
Research on regional growth has a long tradition stretching back at least 50 years. The early developments were splendidly synthesised in Richardson (1973), a book that still has much to offer. Our understanding of regional economic growth and R. J. G. M. Florax et al. (eds.), Fifty Years of Regional Science © Springer-Verlag Berlin Heidelberg 2004
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P.c. Cheshire, EJ. Malecki
development has progressed since the 1960s, when the Borts and Stein (1964) model prevailed. Theory, however, or at least theory as conceived in a rigorous logically consistent and formal sense, has not kept pace with empirical and policy reality. Perhaps reflecting this somewhat modest theoretical advance, if one were to do a simple title count, the largest number of items would still be within a quite traditional neo-classical framework. The Borts and Stein model was a simple adaptation to a regional context, allowing for factor mobility, of Solow's (1956) initial growth model in which the equilibrium growth rate of an economy was determined by the long-run growth of supply; and the growth of the supply capacity was determined by the combined growth of the capital stock, labour supply and technical progress. Virtually all the multitude of cross-sec
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