Evolutionary economics and regional policy

The principal objective of this paper is to formulate some possible links between evolutionary economics and regional policy, a topic that has not (yet) been covered by the literature. We firstly give a brief overview of some issues of regional policy, conceived as a strategy to influence the spatial matrix of economic development. Then, we outline what we take to be the essential arguments and components of evolutionary economics. More in particular, we focus attention on the economic foundation of technology policy from an evolutionary perspective, and how this deviates from the so-called "equilibrium" rationale. Then, we examine in what way evolutionary insights may be helpful for regional policy matters. Our main emphasis is to investigate the degrees fo freedom policy makers may have to determine the future development of regions. When evolutionary mechanisms like chance and increasing returns are mainly involved in the spatial formation of new economic activities, there are several, but quite contradictory, options for policy makers. On the one hand, the importance of early chance events implies that multiple potential outcomes of location are quite thinkable. This is a principal problem for regional policy because new development paths can not be planned or even foreseen. On the other hand, policy makers may have a role to play here. Since space exercises only a minor influence on the location of new economic activities, there is room for policy makers to act and to build-up a favourable local environment. In this respect, urbanisation economies may offer advantages of flexibility secured by a diversity of activities which tends to prevent a process of negative lock-in. When evolutionary mechanisms like selection and path dependency are crucial for the geography of innovation, policy makers are expected to have more influence on the spatial pattern of innovation. In such circumstances, new variety is regarded as strongly embedded in its surrounding environment: the local environment acts as a sort of selection mechanism because it may, or may not, provide conditions favourable to meet the new requirements of new technology. Adaptation to change is largely constrained by the boundaries of the spatial matrix laid down in the past: only minor modifications tend to take place and do not undermine the logic of the spatial system.

Evolutionary economics and regional policy

The principal objective of this paper is to formulate some possible links between evolutionary economics and regional policy, a topic that has not (yet) been covered by the literature. We firstly give a brief overview of some issues of regional policy, conceived as a strategy to influence the spatial matrix of economic development. Then, we outline what we take to be the essential arguments and components of evolutionary economics. More in particular, we focus attention on the economic foundation of technology policy from an evolutionary perspective, and how this deviates from the so-called "equilibrium" rationale. Then, we examine in what way evolutionary insights may be helpful for regional policy matters. Our main emphasis is to investigate the degrees fo freedom policy makers may have to determine the future development of regions. When evolutionary mechanisms like chance and increasing returns are mainly involved in the spatial formation of new economic activities, there are several, but quite contradictory, options for policy makers. On the one hand, the importance of early chance events implies that multiple potential outcomes of location are quite thinkable. This is a principal problem for regional policy because new development paths can not be planned or even foreseen. On the other hand, policy makers may have a role to play here. Since space exercises only a minor influence on the location of new economic activities, there is room for policy makers to act and to build-up a favourable local environment. In this respect, urbanisation economies may offer advantages of flexibility secured by a diversity of activities which tends to prevent a process of negative lock-in. When evolutionary mechanisms like selection and path dependency are crucial for the geography of innovation, policy makers are expected to have more influence on the spatial pattern of innovation. In such circumstances, new variety is regarded as strongly embedded in its surrounding environment: the local environment acts as a sort of selection mechanism because it may, or may not, provide conditions favourable to meet the new requirements of new technology. Adaptation to change is largely constrained by the boundaries of the spatial matrix laid down in the past: only minor modifications tend to take place and do not undermine the logic of the spatial system

La organización económica de las ciudades: una perspectiva institucional

Este artículo presenta una valoración del poder explicativo de las teorías neoinstitucionales de la organización y la desorganización económica de las ciudades y plantea alternativas institucionales a estas teorías. En primer lugar se resumen los principales desarrollos recientes en la organización económica de las ciudades, prestando especial atención al crecimiento de los servicios profesionales, la ciudad informacional, la ciudad transaccional, la ciudad como base de conocimientos para las actividades innovadoras industriales y de servicios, la ciudad red y las redes urbanas. A continuación se examinan las principales teorías y se proponen algunas indicaciones acerca de cómo se puede mejorar el análisis neoinstitucional del sistema económico urbano, concretamente mediante la utilización de la economía evolucionista y de la teoría regulacionista. Los autores concluyen que un análisis más integrado de la economía urbana, basado en una lectura más amplia de las dinámicas institucionales y de los procesos económicos, permitiría establecer unos lazos en la ciudad con dinámicas sociales y políticas no reduccionistas

La organización económica de las ciudades: una perspectiva institucional

Este artículo presenta una valoración del poder explicativo de las teorías neoinstitucionales de la organización y la desorganización económica de las ciudades y plantea alternativas institucionales a estas teorías. En primer lugar se resumen los principales desarrollos recientes en la organización económica de las ciudades, prestando especial atención al crecimiento de los servicios profesionales, la ciudad informacional, la ciudad transaccional, la ciudad como base de conocimientos para las actividades innovadoras industriales y de servicios, la ciudad red y las redes urbanas. A continuación se examinan las principales teorías y se proponen algunas indicaciones acerca de cómo se puede mejorar el análisis neoinstitucional del sistema económico urbano, concretamente mediante la utilización de la economía evolucionista y de la teoría regulacionista. Los autores concluyen que un análisis más integrado de la economía urbana, basado en una lectura más amplia de las dinámicas institucionales y de los procesos económicos, permitiría establecer unos lazos en la ciudad con dinámicas sociales y políticas no reduccionistas

Cities, Knowledge, and Innovation

Based on an overview of historical conceptualizations of knowledge, knowledge diffusion and innovation in cities, we make a plea for conceptual and methodological renewals in research to address current impasses. Firstly, we conclude that analyses using knowledge production functions to capture knowledge flows do not, as of yet, provide full insight into the generation and transfer of different kinds of knowledge. Only recently are various conceptualizations of distance and knowledge transmission channels able to address the heterogeneity of the actors and processes involved in capturing the respective role of cities in knowledge creation. Research should more explicitly focus on the transfer mechanisms of knowledge diffusion. Secondly, our plea for a better embedding of the mechanisms that create and diffuse knowledge is extended to the current discourse on agglomeration externalities in which new conceptual and methodological views appear to be needed as well. In particular, evolutionary economic geographical concepts are promising in explaining the innovative behavior of growing firms and organizations in cities, carefully addressing the heterogeneity of the actors involved, spatial scale, selection and survival as well as time and path dependency. Econometric identification strategies help achieving these goals.</p

Cities, Knowledge, and Innovation

Based on an overview of historical conceptualizations of knowledge, knowledge diffusion and innovation in cities, we make a plea for conceptual and methodological renewals in research to address current impasses. Firstly, we conclude that analyses using knowledge production functions to capture knowledge flows do not, as of yet, provide full insight into the generation and transfer of different kinds of knowledge. Only recently are various conceptualizations of distance and knowledge transmission channels able to address the heterogeneity of the actors and processes involved in capturing the respective role of cities in knowledge creation. Research should more explicitly focus on the transfer mechanisms of knowledge diffusion. Secondly, our plea for a better embedding of the mechanisms that create and diffuse knowledge is extended to the current discourse on agglomeration externalities in which new conceptual and methodological views appear to be needed as well. In particular, evolutionary economic geographical concepts are promising in explaining the innovative behavior of growing firms and organizations in cities, carefully addressing the heterogeneity of the actors involved, spatial scale, selection and survival as well as time and path dependency. Econometric identification strategies help achieving these goals.</p

Evolutionary economics and regional policy

Our principal objective is to formulate some possible links between evolutionary economics and regional policy, a topic that has not (yet) been covered by the literature. To begin with, we outline what we take to be the essential arguments and components of evolutionary economics. More in particular, we focus attention on the economic foundation of technology policy from an evolutionary perspective, and how this deviates from the so-called `equilibrium' rationale. Then, we examine in what way evolutionary insights may be helpful for regional policy matters. Our emphasis is to investigate the degrees of freedom policy makers may have to determine the future development of regions. This is done by distinguishing between two ideal-types of regional development based on evolutionary principles. When evolutionary mechanisms like `chance' and `increasing returns' are involved in the spatial formation of new economic activities, there are several, quite contradictory, options for policy makers. On the one hand, the importance of `chance events' implies that multiple potential outcomes of location are quite thinkable. This is a principal problem for regional policy because new development paths can not be planned or even foreseen. On the other hand, policy makers may have a considerable role to play. Since space exercises only a minor influence on the location of new economic activities, there is room for policy makers to act and to build-up a favourable local environment. In this respect, `urbanisation economies' may offer advantages of flexibility secured by a diversity of activities that may prevent a process of `negative lock-in'. When evolutionary mechanisms like `selection' and `path dependency' largely determine the geography of innovation, the options for policy makers to change fundamentally the course of regional development are expected to be rather limited. Regional policy is likely to fail when local strategies deviate considerably from the local context. In such circumstances, policy makers have to account for the fact that adaptation to change is largely constrained by the boundaries of the spatial system laid down in the past. However, this also implies that the potential impact of regional policy may be quite large when the policy objectives are strongly embedded in the surrounding environment.