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Original innovation, learnt innovation and cities: Evidence from UK SMEs

  • Neil Lee
  • Andrés Rodríguez-Pose

    ()

One of the key benefits of cities is that they allow the exchange of knowledge and information between economic actors. This may have two effects: it may create the conditions for entirely new innovations to emerge, and it may allow firms to learn innovations from those nearby. Yet few studies have considered the impact of an urban location on whether innovations are original or learnt. This paper tests these hypotheses using large-scale survey evidence for over 1,600 UK SMEs. We show that while urban firms tend to be both product and process innovators, urban firms are disproportionately likely to introduce process innovations which are only new to the firm, rather than entirely original. Instead, the urban advantage in product innovation appears to come from a combination of the effects. The results highlight a need for a nuanced view of the link between cities and innovation.

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File URL: http://econ.geo.uu.nl/peeg/peeg1223.pdf
File Function: Version November 2012
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Paper provided by Utrecht University, Section of Economic Geography in its series Papers in Evolutionary Economic Geography (PEEG) with number 1223.

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Length: 28 pages
Date of creation: Nov 2012
Date of revision: Nov 2012
Handle: RePEc:egu:wpaper:1223
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