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The Regional Innovation Paradox: Innovation Policy and Industrial Policy

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Author Info
 Oughton, Christine
Landabaso, Mikel
Morgan, Kevin
Abstract

This paper explores the regional innovation paradox and its policy implications. The regional innovation paradox refers to the apparent contradiction between the comparatively greater need to spend on innovation in lagging regions and their relatively lower capacity to absorb public funds earmarked for the promotion of innovation and to invest in innovation related activities compared to more advanced regions. Empirical analysis of the nature of the paradox shows that there are strong complementarities between business, education and government spending on R&D and that technology/innovation policy and industrial policies tend to work in opposite directions. Our analysis suggests that resolution of the paradox requires policies that: (i) increase the innovation capacity of regions by working both on the demand and the supply side of the system to increase both private and public sector investment in innovation activity; and (ii) integrate technology policy and industrial policy by encouraging expenditure on innovation activity within mainstream industrial policy programmes. The penultimate section of the paper outlines and assesses policy initiatives/experiments along these lines and suggests how they might be developed in the future. Copyright 2002 by Kluwer Academic Publishers

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Publisher Info
Article provided by Springer in its journal Journal of Technology Transfer.

Volume (Year): 27 (2002)
Issue (Month): 1 (January)
Pages: 97-110
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Handle: RePEc:kap:jtecht:v:27:y:2002:i:1:p:97-110

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  1. Richard Harris, 2008. "Models of Regional Growth: Past, Present and Future," SERC Discussion Papers 0002, Spatial Economics Research Centre, LSE. [Downloadable!]
  2. Richard Harris & Victoria Kravtsova, 2009. "In Search of W," SERC Discussion Papers 0017, Spatial Economics Research Centre, LSE. [Downloadable!]
  3. Mikel Navarro & Juan José Gibaja & Ricardo Aguado & Beñat Bilbao-Osorio, . "Patterns of innovation in the EU-25 regions: a typology and policy recommendations," Working Papers 200804, Basque Institute of Competitiveness. [Downloadable!]
  4. Michaela Trippl, 2006. "Cross-Border Regional Innovation Systems," SRE-Disc sre-disc-2006_05, Department of City and Regional Development, Vienna University of Economics and Business Administration. [Downloadable!]
  5. Knut Koschatzky & Vivien Lo, 2004. "Multi-actor regional governance: regions as new players for innovation in Europe," ERSA conference papers ersa04p140, European Regional Science Association. [Downloadable!]
  6. Franz Tödtling & Michaela Trippl & Lukas Lengauer, 2008. "Towards Regional Knowledge Economies: Routes and Policy Options," SRE-Disc sre-disc-2008_05, Department of City and Regional Development, Vienna University of Economics and Business Administration. [Downloadable!]
  7. Herrera, Liliana & Nieto Antolín, Mariano, 2006. "The Regional Dimension of the Distribution and Effects of Public Incentives Directed towards Innovation of Firms," Documentos de Trabajo "Nuevas Tendencias en Dirección de Empresas". Working Papers "New Trends on Business Administration". 2006-03, Interuniversitary Doctorate Program "New Trends on Business Administration", Universities of Valladolid, Burgos and Salamanca (Spain). Programa de Doctorado Interuniversitario "Nuevas Tendencias en Di. [Downloadable!]
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