Higher Education Institutions and Regional Development

Growth theories generally acknowledge that innovation and knowledge generating activities play a crucial role in determining the growth dynamics and their trajectories in national and regional economies (Solow 1956; Temple 1999; Romer 1990). Innovation—the development of new processes, products, and organizational structures, which are both technologically feasible and commercially successful—is created through the continuous interaction between firms, research institutes, government agencies, financing organizations, and, what is particularly important here, higher education organizations. The exchange of knowledge, human and financial capital, and other resources while enabling innovation embeds the actors in a dense network of interactions at the national, local, and, most of all, at the regional level. This is because regions serve to accumulate and diffuse information and knowledge more intensively through social network formation and labor market mobility, than what is the case at national and international levels (Agrawal et al. 2006; Malmberg and Power 2005; Maurseth and Verspagen 2002). It has been shown that the variety of actors within a region is a strong determinant of innovativeness. This variety is fostered by entrepreneurship.