Innovation Networks to Cope with the Geographical Distribution of Technological Knowledge. An Empirically Calibrated Spatial Agent-Based Model Study

Over the last decades, research and development of technology has become a collaborative activity of firms creating new by combining existing knowledge. In stimulating technology development, the European Commission pursues ‘smart specialization of regions’ and thus creates a patchwork of regions in which firms collaboratively extend local, technologically specialized knowledge bases. However, creating genuinely path-breaking technological knowledge often requires combining knowledge from different sectors, possibly found in different regions. In this chapter, a fundamental spatial agent-based model is used to study which network structures are conducive to technological knowledge development given a particular geographical distribution and structure of technological knowledge. Unlike the technology discovery models found in literature, which predominantly use a highly simplified technology structure being searched, the model in this chapter is empirically calibrated to the structural features of the OECD patent database. Ultimately, it is concluded that technological knowledge progresses faster and becomes more advanced under regional diversification and does so for a wider variety of network structures. Smart specialization requires a smart or complete network with a high number of ties to attain a similar level of technological knowledge progress.