Change in the Innovation Process: New Knowledge Production and Competitive Cities--The Case of Stuttgart

The global integration of economic activities is bringing with it major changes in innovation processes. New kinds of innovation, such as service and organizational innovations, became increasingly important in the 1990s. The shift to new forms of knowledge creation reflects the emerging knowledge based economy. This has effects on the existing comparative advantages of metropolitan innovation systems and is a major challenge to the ability of cities to adjust, especially those in mature industrial sectors whose competitiveness is based on innovations in industrial technology and scientific and technological knowledge production. Stuttgart is one of these cities. Much of the comparative innovative strength of the Stuttgart region derives from the generation of synergy effects of its technological and institutional development paths. The high levels of industrial exports and the competitiveness of the global players in the Stuttgart region indicates how advantageous the technology based knowledge production and diffusion in the region has been for the innovativeness of the core industrial branches. The crisis at the start of the 1990s showed that the economic success of particular firms does not mean that the metropolitan region as a whole is innovative and competitive. The institutional structures used to establish and maintain the comparative innovative advantages of the industrial sector have hindered adjustment to new forms of knowledge production and diffusion. The paper examines the adjustment processes in the Stuttgart region which are changing the organization of innovation and learning in a way that makes it receptive to new forms of knowledge production and diffusion.