This month's featured article
Making agglomeration ‘metabolised’ for innovation
HAMAGUCHI NobuakiFaculty Fellow, RIETI
KONDO KeisukeFellow, RIETI
Innovation is an important driver of economic growth. In particular, to acquire global competitiveness, the quality of innovation matters more than the quantity. Although innovative outcomes rest on individual efforts in research and development in firms and scientific organisations, economic research has also paid special attention to the agglomeration economy, which is expected to foster innovation through active knowledge spillovers (e.g. Carlino and Kerr 2015).
It is more likely that high-quality innovations are born in cities. The large number of specialised people in cities is not the only reason for such advantage—the greater diversity of knowledge also matters. It is often pointed out that proximity to a greater number of people facilitates face-to-face communication and fosters innovation. However, as analysed by Berliant and Fujita (2012), repeated interactions increase common knowledge and reduce knowledge diversity across workers, which limits opportunities for learning fresh ideas from each other. In fact, Huber (2012) indicates that technological knowledge spillover effects within the Cambridge Information Technology Cluster are very weak. In that sense, the effect of agglomeration on innovation is not sustainable just because an industrial cluster is established.
To read the full text
http://www.rieti.go.jp/en/columns/v01_0054.html
Event Information
Fellow titles and links in the text are as of the date of publication.
For questions or comments regarding RIETI Report, please contact the editor.
*If the "Send by mailer" button does not work, please copy the address into your email "send to" field and connect the prefix and the suffix of the address with an "@", sending it normally.RIETI Report is published bi-weekly.