Innovation, creativity and governance: Social dynamics of economic performance in city-regions

Abstract

The pressure towards a globalizing, knowledge-based economy raises questions about the underlying determinants of economic performance in city regions. The creation and diffusion of new knowledge drives innovation in knowledge-intensive production and service activities, which in turn, drives economic performance and growth. Although these processes are strongly shaped by national institutions and global knowledge flows, recent analyses of innovation and creativity emphasize the continuing relevance of regions in general and urban regions in particular as critical sites for determining economic performance. This work also suggests that the underlying social dynamics of urban regions are particularly significant in shaping economic outcomes. This paper explores some recent evidence on the social nature of innovation dynamics in urban regions, the increasing significance of talent and creativity in urban economies and their implications for the economic performance of city regions. It concludes with a discussion of the need for the strategic management of urban economies to cope with the challenges they face.

Keywords:

• knowledge-based economy
• city/region economic performance
• innovation dynamics
• urban economies
• strategic management

Acknowledgment

Research for this paper has been supported by the Social Sciences and Humanities Research Council of Canada under Grant No. 412-2005-1001. The authors are indebted to Jane Marceau and Michael Storper for comments on an earlier version of the paper. We have also benefited from our collaboration with colleagues in the Innovation Systems Research Network, especially Meric Gertler and Jen Nelles.

Notes

1. Drennan (2002) distinguishes between the traditional manufacturing sector and the information sector. The latter includes financial producer services, producer services and advanced consumer services (16-17). He reports that information sector exports were $133 billion in 1999, accounting for more than two thirds of the $193 billion in high tech exports of computers, semiconductors, aircraft, telecom equipment and scientific instruments.