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Contributions to Economics Małgorzata Runiewicz-Wardyn Knowledge Flows, Technological Change and Regional Growth in the European Union Contributions to Economics For furthervolumes: http://www.springer.com/series/1262 ThiSisaFMBlankPage Małgorzata Runiewicz-Wardyn Knowledge Flows, Technological Change and Regional Growth in the European Union MałgorzataRuniewicz-Wardyn KozminskiUniversity Warsaw Poland ISSN1431-1933 ISBN978-3-319-00341-2 ISBN978-3-319-00342-9(eBook) DOI10.1007/978-3-319-00342-9 SpringerChamHeidelbergNewYorkDordrechtLondon LibraryofCongressControlNumber:2013940614 ©SpringerInternationalPublishingSwitzerland2013 Thisworkissubjecttocopyright.AllrightsarereservedbythePublisher,whetherthewholeorpart of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation,broadcasting,reproductiononmicrofilmsorinanyotherphysicalway,andtransmissionor informationstorageandretrieval,electronicadaptation,computersoftware,orbysimilarordissimilar methodologynowknownorhereafterdeveloped.Exemptedfromthislegalreservationarebriefexcerpts inconnectionwithreviewsorscholarlyanalysisormaterialsuppliedspecificallyforthepurposeofbeing enteredandexecutedonacomputersystem,forexclusiveusebythepurchaserofthework.Duplication ofthispublicationorpartsthereofispermittedonlyundertheprovisionsoftheCopyrightLawofthe Publisher’s location, in its current version, and permission for use must always be obtained from Springer.PermissionsforusemaybeobtainedthroughRightsLinkattheCopyrightClearanceCenter. ViolationsareliabletoprosecutionundertherespectiveCopyrightLaw. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publicationdoesnotimply,evenintheabsenceofaspecificstatement,thatsuchnamesareexempt fromtherelevantprotectivelawsandregulationsandthereforefreeforgeneraluse. While the advice and information in this book are believed to be true and accurate at the date of publication,neithertheauthorsnortheeditorsnorthepublishercanacceptanylegalresponsibilityfor anyerrorsoromissionsthatmaybemade.Thepublishermakesnowarranty,expressorimplied,with respecttothematerialcontainedherein. Printedonacid-freepaper SpringerispartofSpringerScience+BusinessMedia(www.springer.com) Acknowledgments MymostprofoundthankstoProf.GrzegorzW.Kolodko,DirectoroftheTransfor- mation, Integration and Globalization Economic Research Center (TIGER), who gave me the opportunity to pursue my academic career and scientific interests. I would also like to express my gratitude to numerous experts and colleagues from Harvard University, the University of California at Berkeley, Suffolk University, andUniversite´ libredeBruxellesforsharingtheirpreciouscommentsandexperi- ence, and giving their professional advice on my research. For all the interesting comments and valuable feedback my special thanks go to Prof. Philippe Aghion and Prof. Edward L. Glaeser of Harvard University; Prof. David Dowall, Prof. Stephen S. Cohen, and Prof. John Zysman of the University of California at Berkeley; Prof. Zbigniew Bochniarz, the Evans School of Public Affairs, Univer- sityofWashington;andProf.RobertDeFillippiofSuffolkUniversityinBoston.I am also very grateful to Prof. Henry Capron and Prof. Michele Cincera from Universite´ libre de Bruxelles for hosting me for two short-term exchange visits duringwhichIhadtheopportunitytohavelongdiscussionswithpeopleattheroot ofmyinterest.Italsoenabledmetoconductinterviewswithrepresentativesofthe Wallonie and Flanders regions’ technological clusters aswell as policy makers in European institutions. Many thanks also to Dr. Jaan Masso, Dr. Alessandro Vecciato,andDr.LydiaGreunzfortheirtechnicalsupportandfeedback. I would also like to thank my interviewees from different scientific fields for their expert feedback and comments. Finally, I would like to express my deepest and most heartfelt gratitude to my husband, my son, and my parents for their patienceandencouragement.Thankyou. v ThiSisaFMBlankPage Preface Knowledge and learning have always been central driving forces of economic growthandprosperity.Differentspeedsofknowledgeaccumulationanddiffusion, as well as different socio-political environments have hampered the successful absorption of knowledge and transfer into economic resources. Almost a century ago, Alfred Marshall embraced this interlinkage in one of his statements (1920, pp. 270–271): “Nearly all important knowledge has long deep roots stretching downwardstodistanttimes;andsowidelyspread havebeen theseroots,soready tosendupshootsofvigorouslife,thatthereisperhapsnopartoftheoldworldin which theremightnotlong agohave flourished manybeautifulandhighlyskilled industries,iftheirgrowthhadbeenfavoredbythecharacterofthepeople;andby their social and political institutions (...).” In fact, people are inherently creative and innovative and that if only the institutional and political circumstances were right, their knowledge would be used for continued technological progress. The economic utility of knowledge rests on its creation, diffusion, and technological application. Knowledge and technology are like the “heart” and “mind” of every economy. By integrating knowledge factors with technological advancement and inserting them into the aggregate production function, economies can take full advantageofscaleandlong-termprosperity. Today,morethaneverbeforeinhumanhistory,thereisgreaterappreciationfor the importance of knowledge and learning. Accelerating technological advance- ment and globalization puts continuous pressure on learning and constantly upgrading skills. Therefore, it should be every government’s role to provide necessary technological infrastructure, encourage and support business R&D efforts, and promote lifelong learning. Increasing the quality of human resources improves the efficiency of the workforce, raises aggregate productivity, and improvesallocativeefficienciesofeconomicresourcesthatcouldgenerategrowth forfuturegenerations. vii ThiSisaFMBlankPage Contents 1 KnowledgeasaDriverofTechnologicalChangeandRegional Growth. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.1 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.2 TechnologicalChange:ConceptualandMethodologicalRelated Issues.. . . . .. . . . . .. . . . .. . . . .. . . . .. . . . . .. . . . .. . . . .. 2 1.2.1 RoleofKnowledgeasaDriverofTechnological Change. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.2.2 TypesandSourcesofKnowledgeintheInteractiveModel ofInnovations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 1.2.3 KnowledgeAbsorption,Diffusion,and“Technological Proximity”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 1.2.4 RoleofSpaceinKnowledgeSpilloversandDiffusion Processes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 1.3 ScientificCollaborationandKnowledgeNetworks. . . . . . . . . . . 16 1.4 InnovativePotential,Competition,andMeasuresofTechnological Change. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 1.4.1 TechnologicalChangeandGrowthofHigh-Tech Industries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 1.4.2 R&DandPatentsasMeasuresofInnovativePotentialof Regions. . . . . .. . . . . .. . . . . .. . . . .. . . . . .. . . . . .. . 20 1.4.3 ProductivityandEmploymentinHigh-Technology Industries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 1.5 KnowledgeSpilloversandRegionalInnovationSystem(RIS). . . 27 1.5.1 Region’s“InnovationSystem”VersusCluster-Based Approaches. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 1.5.2 KnowledgeAbsorptionandDiffusionwithinRIS. . . . . . 28 1.5.3 InstitutionalStructureofRISandTechnology Transfer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 1.6 LocalProductiveSystemandInnovations. . . . . . . . . . . . . . . . . 34 1.6.1 DynamicExternalitiesandKnowledgeSpillovers. . . . . . 34 1.6.2 DynamicExternalitiesandIndustryLifeCycles. . . . . . . 37 ix

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