Knowledge, Innovation and Productivity Gains across European Regions

Abstract

Capello R. and Lenzi C. Knowledge, innovation and productivity gains across European regions, Regional Studies. This paper studies the relationship between knowledge, innovation and productivity in European regions, looking for the sources of spatial heterogeneity across regions in the type of knowledge needed for innovation and in the propensity to innovate, which mostly depend upon specific and systemic context conditions. The conceptual framework of analysis is based on the strong belief that different modes of innovation characterize regions, according to the presence/absence of some context conditions that allow for the creation and/or adoption of knowledge and innovation. Given the differences in knowledge and innovation intensity that characterize each mode/pattern of innovation, expectations are formulated on the achievement of productivity gains in regions characterized by different innovation patterns. Empirical evidence supports the conceptual expectations and shows that in regional innovation patterns based on local scientific knowledge-creation processes there are positive returns to scientific knowledge. However, in less knowledge-intensive patterns considerable productivity gains can also be achieved by local actors exploiting non-scientific knowledge and innovative capacity. Importantly, whereas the benefits accruing from knowledge appear rather selective and concentrated in a relatively small number of regions, the benefits generated by innovation seem more pervasive and beneficial, even in regions with a low endowment of scientific knowledge. These results have considerable implications for the current design of European Union innovation policies at the regional level.

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