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The knowledge economy and Dutch cities


  • Frank Van Oort


  • Otto Raspe



How can cities and metropolitan regions remain prosperous and competitive in a rapidly changing economy? In our paper we argue that ‘the knowledge economy’ offers perspectives for growth and added value creation. The paper clarifies what elements the knowledge economy actually consists of, how it can be measured in statistical indicators, in which regions and cities in the Netherlands the knowledge economy has its most significant imprints and what statistical association there is between these regions and cities and relatively good economic performance of firms. We test two contrasting hypotheses often heard in the international literature. The current embedding of knowledge externalities in endogenous economic growth theory have led to important contributions that stress the urban character knowledge transmission in particular. The reasoning is that if knowledge spillovers and –externalities are important to growth and innovation, they should be more easily identified in cities where many people are concentrated into a relatively small geographic space so that knowledge can be transmitted between them more easily. Much recent research indeed finds a limited extent of spatial spillovers and a large degree of local clustering. Alternatively, a large body of literature on Western spatial configurations of innovation and high-technology firms predominantly stresses the supposed ‘urban field’ character of firm performance: location and agglomeration aspects do not seem to have a systematic impact on the distribution of innovative and growth inducing activities over space. We test the urban hypothesis using spatial econometric modeling techniques. On the one hand, the fact that a distance squared distance weight matrix in spatial lag estimations fits the performance data best in relation to knowledge economy factors indicates that spatial relations are limited and urban fixed. On the other hand, the significance of several spatial regimes though (especially those of the Randstad core region, the so-called intermediate zone and medium-sized cities) indicates that the urban structure related to the knowledge economy and economic performance is not straightforward hierarchical (largest cities are not the relatively most attached to the knowledge economy). Both hypotheses (urban and non-urban) are too extreme to fit the Dutch situation. We also conclude that the locational attributes of the factor ‘knowledge workers’ are much more significantly related to economic growth and added value (in practically all specifications over regimes and spatial lag estimations) than the R&D-based innovation input factor. This questions Dutch policy initiatives that mainly focus on R&D as stimulator of the ‘knowledge economy’.

Suggested Citation

  • Frank Van Oort & Otto Raspe, 2005. "The knowledge economy and Dutch cities," ERSA conference papers ersa05p165, European Regional Science Association.
  • Handle: RePEc:wiw:wiwrsa:ersa05p165

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    References listed on IDEAS

    1. Egbert Wever & Erik Stam, 1999. "Clusters of High Technology SMEs: The Dutch Case," Regional Studies, Taylor & Francis Journals, vol. 33(4), pages 391-400.
    2. Adam B. Jaffe & Manuel Trajtenberg & Rebecca Henderson, 1993. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," The Quarterly Journal of Economics, Oxford University Press, vol. 108(3), pages 577-598.
    3. Adam B. Jaffe & Manuel Trajtenberg, 2005. "Patents, Citations, and Innovations: A Window on the Knowledge Economy," MIT Press Books, The MIT Press, edition 1, volume 1, number 026260065x, January.
    4. Audretsch, David B & Feldman, Maryann P, 1996. "R&D Spillovers and the Geography of Innovation and Production," American Economic Review, American Economic Association, vol. 86(3), pages 630-640, June.
    5. Wallsten, Scott J., 2001. "An empirical test of geographic knowledge spillovers using geographic information systems and firm-level data," Regional Science and Urban Economics, Elsevier, vol. 31(5), pages 571-599, September.
    6. Frank van Oort & Anet Weterings & Heleen Verlinde, 2003. "Residential amenities of knowledge workers and the location of ICT-FIrms in the Netherlands," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 94(4), pages 516-523, September.
    7. Godin, Benoit, 2004. "The New Economy: what the concept owes to the OECD," Research Policy, Elsevier, vol. 33(5), pages 679-690, July.
    8. Dominique Foray, 2006. "The Economics of Knowledge," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262562235, January.
    9. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
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    Cited by:

    1. Sood, Suresh C. & Pattinson, Hugh M., 2006. "Urban renewal in Asia-Pacific: A comparative analysis of brainports for Sydney and Kuala Lumpur," Journal of Business Research, Elsevier, vol. 59(6), pages 701-708, June.

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