Regions and Innovation Policy

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Regions and Innovation Policy addresses the needs of national and regional governments for greater clarity on how to strengthen the innovation capacity of regions. The first part of the book examines strategies, policies and governance, explaining why regions matter, what makes smart policy mixes, and multilevel governance.  The second part of the book looks at agencies, instruments and country information, showing how agencis can maximize their impact and what policy instruments work. The final chapter provides country-by-country summaries of what countries are doing.




For many decades now, economists have known that long-term, sustainable economic growth cannot simply be explained by increases in physical capital, natural resources or population. The accumulation of physical capital – investments in machines, buildings, roads – will increase economic output in the short run, but the mere addition of physical capital does not guarantee long-term economic growth, given the emergence of so-called marginal diminishing returns in the process of such capital accumulation. This is even more true in the case of natural resources and population growth or increased employment participation. Ultimately, long-term sustainable growth will depend on knowledge accumulation, either embodied, in smarter capital, a more efficient use of natural resources and a better-educated labour force, or disembodied, for example, as codified in patents, copyrights or trademarks. Knowledge accumulation depends on investment in education, including tertiary education, training and lifelong learning, accumulated scientific knowledge and technological advancement, and on social and institutional development. The general consensus in the literature today is that the driving force behind long-term economic growth is science, technology and innovation in its different forms and facets.


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