The knowledge economy: a new source of regional divergence?

It is widely recognised that creativity and the capacity to innovate are the drivers of competitiveness, especially where the possibilities for cost-cutting have drastically lessened. Economics have made important efforts to endogenise factors which boost such drivers. The paper deals with two connected issues. First, the obsolescence of the cognitivist approach to which mainstream economics mostly resorts to explain relationships between knowledge and creativity and, conversely, the heuristic power of a hermeneutic approach. Second, the spatial implications of this approach, because of its strongly place-based nature. The paper suggests that major economies of agglomeration and cumulative effects are at work, with important consequences on regional disparities if not divergences. Evidence from the Italian case corroborates this hypothesis, and also suggests that knowledge-based activities are giving rise to new forms of regional disparities.