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Are innovative regions more unequal? Evidence from Europe


  • Neil Lee


Studies of the United States have suggested that the most innovative areas are also the most unequal. There are a number of potential processes that might lead to this. Innovation may raise the return of human capital in ways which can lead to localised inequality. Innovative industries may be subject to greater wage polarisation or offer more erratic returns than other industries. Moreover, the affluent may hire others to work in poorly paid personal service employment nearby. However, while there is some evidence for these processes in the US, whether this applies in the European case is less certain. I use the European Community Household Panel and the Eurostat Regio database to test the link between innovation and wage inequality in a panel of European regions for the period 1996 – 2001. Two measures of innovation are used: employment in knowledge-based industries and the level of patenting in a region. The results are indicative of a positive link between regional innovation, as measured by patenting, and inequality. In contrast, there is little evidence of a link between knowledge-based industries and inequality, with the exception of a positive relationship between employment in knowledge-intensive financial services and inequality.

Suggested Citation

  • Neil Lee, 2011. "Are innovative regions more unequal? Evidence from Europe," Environment and Planning C: Government and Policy, Pion Ltd, London, vol. 29(1), pages 2-23, February.
  • Handle: RePEc:pio:envirc:v:29:y:2011:i:1:p:2-23

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    Cited by:

    1. Argentino Pessoa, 2014. "Smart Specialisation in the EU: Is it a Bridge between Innovation and Cohesion?," ERSA conference papers ersa14p989, European Regional Science Association.
    2. Neil Lee & Andrés Rodríguez-Pose, 2016. "Is there trickle-down from tech? Poverty, employment and the high-technology multiplier in US cities," Papers in Evolutionary Economic Geography (PEEG) 1618, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Aug 2016.
    3. Argentino Pessoa, 2016. "Rectracted: Smart specialization in the EU: RIS3 conditionality, innovation and cohesion," Papers in Regional Science, Wiley Blackwell, vol. 95(2), pages 439-439, June.

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