Evolutionary Complexity Geography and the Future of Regional Innovation and Growth Policies

This chapter reviews some key conceptual and practical barriers that have hampered territorial economic development prospects in most advanced countries for some time. It is argued in the paper that influential development thinkers and policy organisations, supranational (UNIDO; World Bank; EU) as well as national and regional became wedded in an unholy alliance of neoclassical economic dogma and neoliberal policy ideology during the period from approximately 1980 to the 2008 global financial crash and beyond to the time of writing (2015). In outline, neoclassical dogma stressed the virtues of spatial ‘specialisation’ as an economic development virtue. The heart of this perspective with its claimed inheritance from Marshall to Arrow to Romer coalesced in the nowadays nearly ubiquitous spatial policy image if not always the reality of “clusters”. The neoliberal accompaniment was that “efficient markets” were superior allocation mechanisms to markets shaped by policies to overcome “market failure”, “adverse selection”, and so-called “agency” problems. The great escape from such cognitive and policy “lock-in” involves demonstration in conceptual and many comparative empirical studies that regional knowledge and innovation flows were no longer, if they ever had been, vertical, linear and cumulative but horizontal, variegated and combinative. In this brief review evolutionary economic geography (EEG) is refashioned as evolutionary complexity geography (ECG) which, with acknowledgement to recent resilience issues, is grounded by reference to exemplars of transversality, which is the name for innovation and knowledge flows policy that overcomes the cognitive and policy lock-ins described above.