The Knowledge Base, Innovation and Urban Economic Growth

With the increasing globalisation of the world’s economy the competitiveness of the urban regions of the developed world has increasingly been challenged firstly by the resource base and secondly by low cost labour in the developing world. The patterns of production and trade in manufactured goods have shifted towards a new international division of labour in which multinational enterprises have sought out low wage manual workers. From this industrial base these enterprises have developed new products and facilitated the growth of new indigenous enterprises (Daniels and Lever 1996). More recently, with the growth of the service sector, the new international division of labour has drawn investment in services to the developing world in search of low cost, but increasingly literate and numerate, workers in sectors such as data processing and global tourism (Coffey and Bailly 1992; Howland 1996). More recently still, concentrations of high skill service activities have developed in the Newly Industrialising Countries which threaten these specialisms in the United States and western Europe. An example would be the software writing concentration in Bangalore in India.