Innovation without Regional Development? The Complex Interplay of Innovation, Institutions, and Development

abstract

This article argues that the development of regional innovation concepts, drawing primarily on the experiences of advanced regions, has led to inadequate narratives about the experience of less-developed regions (LDRs). Drawing on the extensive experience of the authors doing research in LDRs, the article develops three main arguments: first it examines the limitations of endogenous approaches to regional development, in particular concerning the role of formal dynamics (within organizations and institutions) in innovation systems. It will be argued that understanding the role of formal dynamics is fundamental to avoid culturally deterministic explanations of regional (under)development and to help design more effective policies. Second, this article will explore the literature that demonstrates the complex interplay between innovation, institutions, and regional development. The authors argue that though innovation is fundamental for long-term economic growth, innovation at firm level is not sufficient to generate development. Third, this article distills the policy implications of the foregoing analysis, namely, by highlighting alternatives to current models of innovation-based, export-based development.

Key words:

• Less-developed regions
• innovation
• productivity
• organizational capabilities
• institutions
• regional development

Acknowledgments

Pedro Marques is funded by the Ramon y Cajal fellowship RYC-2017-22872, awarded by the Ministerio de Ciencia e Innovación, with support from the European Social Fund. The authors would like to thank David Waite for his comments on an earlier version of this article. The usual disclaimers apply.

Notes

¹ ESS Round 9: European Social Survey Round 9 Data 2018. Data file edition 1.2. NSD—Norwegian Centre for Research Data, Norway—Data Archive and distributor of ESS data for ESS ERIC. doi:10.21338/NSD-ESS9-2018.