Contemporary Theories and Perspectives on Economic Development
Edited by Robert Huggins and Piers Thompson
Chapter 11: A network theory of regional competitiveness: innovation, entrepreneurship and growth
Notions and theories of regional competitiveness are broadly cognate with theories of endogenous growth, which focuses on the role of knowledge as a key driver of productivity and economic growth, and departs from the traditional emphasis on the accumulation of physical capital. However, despite contemporary theoretical developments in the field of economic growth, there is a need to further widen our conception of the investment resources underpinning economic growth. Indeed, it is suggested that perhaps the most interesting implications of endogenous growth theory relate to the impact of the spatial organization of regions on flows of knowledge. In particular, it is considered that differences in regional growth can potentially be explained by differences in the conditions for creating, accumulating and _ crucially _ transmitting knowledge. The aim of this chapter is to propose that the inter-organizational networks underpinning the flow of knowledge within and across regions are a key capital input within regional growth and competitiveness processes. The chapter proposes that the concept of ‘network capital’ _ in the form of investments in calculative relations through which organizations gain access to knowledge to enhance expected economic returns _ should be incorporated into regional growth models. The chapter outlines the case and potential methods for integrating network perspectives into theories of regional competitiveness and growth, with the particular importance of the network capital built by entrepreneurs and their firms explored. The case of Silicon Valley provides some empirical insights which are then used to draw implications for regional economic development policy and future research.
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