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11_Lect_New Directions in Economic Geography
This document provides an overview and summary of key topics in economic geography and innovation. It discusses concepts like slow innovation, mission-oriented policies, and examples of smart specialization strategies. The document notes that innovation can occur in non-urban areas through local knowledge and networks. Slow innovators may rely less on interactions and instead focus on long-term, stable environments. Small and medium-sized towns can drive regional growth. Lagging regions still contribute to economic development. Mission-oriented policies address societal challenges through public and private partnerships across sectors.
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11_Lect_New Directions in Economic Geography
- 1. Lecture 1 -Introduction: economic geography and its recent paradigms Evolutionary Economic Geography Summer Semester 2021 Final lecture 01/06/2021
- 2. 8) 20-05: StrategicThinking in Regional Development, Strategic Spatial Planning and Regional Attractiveness 9) 25-05 (Tuesday): Recap > Corporate Spatial Responsibility, and Strategic Coupling 10) 27-05 (Thursday): Strategic Coupling recap > Smart Specialisation Strategies in Today’s Globalized World 11) 01-06 (Tuesday): New Directions in Economic Geography Extra recording: Global Value Chains (google drive for recordings) Lectures, April, May, June 2021 Tuesday, 10:15 – 11:45 | Thursday, 10:15 – 11:45 OLAT
- 3. Where do westand Human impact on Earth's geology and ecosystems OLAT e.g. global warming We have been Discussing this
- 4. Economic geography Production, consumption, distribution Globalvalue chains and their impacts on ecosystems Global production networks (TNCs) Geographies of innovation Geographies of entrepreneurship Investment attraction (FDI) Labour market Socioeconomic transformation Strategic directions Structural change Path-dependencies Path-renewal//path-creation Time-based competition
- 5. Strategic Coupling andTesla? Open innovation OLAT > J_25-05 - Lect. 9 - Corporate... Tesla Motors follows the coupled innovation process by establishing strategic partnerships. Coupled innovation refers to innovation in cooperation with supplemental partners. These partnerships can be formulated as joint ventures and alliances. Tesla Motors applies open innovation and its coupled process by establishing R&D collaborations with major companies
- 6. Contrasting principles ofClosed to Open innovation (Chesbrough 2003) > inter-firm strategic partnerships In comparison to strategic coupling not necessary a win-win situation to/towards local communities
- 7. Tesla Motors Partnerships(Holmberg, 2011). Partnerships: Alliances Joint ventures Loans (US Government) Tesla's Battery Tech Explained
- 8. Three pillars ofa smart specialisation strategy (policy) 1) Entrepreneurial discovery and spillovers > the discovery is the fact that it is possible to move from one product/good/service to another on the basis of a similar set of engineering capabilities and techniques; 2) Entry and agglomeration > of similar and complementary businesses (cluster formation); 3) Structural changes > in the form of the transition from an old business to a new one. With // without a specific policy
- 9. 1) Entrepreneurial discovery Fromideas to > new domains > new business > entering new paths It precedes the innovation stage and consists of the exploration and establishment of a new domain of opportunities (technological and market), potentially rich in numerous innovations that will subsequently occur. It increases innovation probabilities It is the demonstration that something is possible – for example, moving from the manufacture of nails to glasses; developing from traditional silk manufacture to a production of technical fabrics; integrating nanotechnologies into the wood pulp production
- 10. 2) Entry andagglomeration New opportunities because they are useful The social and business value of the discovery is that it informs the whole system that a particular domain of R&D and innovation is likely to create new opportunities for the regional economy. Entry (market/system) constitutes the confirmation that others see this discovery as meaningful. Entry is a key ingredient of smart specialization so that agglomeration externalities (clusters) can be realised.
- 11. 3) Structural changes Newareas of opportunity The potential success of discoveries and new activities that aim to explore and open up a new area of opportunities will ultimately translate into some kind of structural changes within the regional/local economy 3.1) Transition 3.2) Modernisation 3.3) Diversification 3.4) Radical foundation Differences are difficult to grasp
- 12. Structural changes Example The caseof silk/textile firms in Lyon exemplifies such a transition pattern from traditional technologies for old declining markets to new technologies allowing these firms to enter new markets. 3.1) Transition A new domain emerging from an existing industrial system (a collection of R&D, engineering and manufacturing capabilities that sustain innovation). Lyon
- 13. Structural changes Development ofICT applications in tourism and the exploration of biotechnology potentials in the agri- food industry. 3.2) Modernisation When the development of specific applications of a general purpose technology produces a significant impact on the efficiency and quality of an existing (often traditional) sector. Protecting crops Drones in agriculture Irrigation systems Improving nutritional value
- 14. ICT in agriculture(e.g.) 3.2) Modernisation Please keep in the mind potential drawbacks of modernisation
- 15. Structural changes Such synergiesmake the move towards a new, growing market, more attractive and profitable (e.g. banks offering insurance) 3.2) Diversification Concerns potential synergies (economies of scope) that are likely to materialise between an existing activity and a new one. Modernise and Diversify? A challenge ‘regions diversify by branching into industries that are related to their current industries’ (Neffke et al. 2009).
- 16. Structural changes 3.4) Radicalfoundation A new domain is founded with no direct link with existing structures (industrial/services). Government intervention is needed to address underinvestment in entrepreneurial discovery or insufficient capabilities to undertake entrepreneurial discoveries or to move from idea to practice/business. https://www.metromile.com/
- 17. Role of smartspecialisation Let’s assume that the regional economy includes A large agri-food sector characterised by weak to moderate innovation capacities > sleeping giant A high-tech cluster > excited goblins Low-tech SMEs operating as subcontractors for the automotive sector, which is based in other regions. > hungry dwarfs The sleeping giant, as well as the hungry dwarfs, badly need structural changes – modernisation or diversification – and this will happen through a smart specialisation strategy that involves them.
- 18. Role of smartspecialisation Ex ante actions are carried out well to support the formation of entrepreneurial knowledge and capabilities, an inclusive strategy will produce results enabling strong entrepreneurial discovery projects to be developed > in all parts of the economy. (Inclusive) Smart specialisation strategy Winner taking it all Nice projects + funding
- 19. Current examples ofsmart specialisation Examples here Technology Circular bio-economy Energy transition
- 20. Current examples ofsmart specialisation Examples here More participation Cross-sec. policies Foster decision-making
- 21. Current examples ofsmart specialisation Examples Implementing Smart Specialisation: An analysis of practices across Europe Smart Specialisation Platform on Agri-food, the Region of Tuscany (Italy) Participation in the thematic partnership has enabled an organisational change at the level of regional ministries, with an improved communication on Smart Specialisation. It also allowed for a behavioural change among regional officers/stakeholders with more effective collaboration among various operational programmes in the lead region Effective collaboration for organisational change
- 22. Current examples ofsmart specialisation Multi-level governance that fosters innovative market solutions via open data The Six City Strategy, is carried out by the six largest cities in Finland - Helsinki, Espoo, Vantaa, Tampere, Turku and Oulu. Source (Finland)
- 23. Current examples ofsmart specialisation The Six City Strategy The cities have opened their data portals to encourage its commercial use and help companies scale-up their business to the six cities. The project portfolio ranges from smart mobility, clean technologies and agile piloting, to creating development environments for product testing and boosting open data for business. Source Open data for business
- 24. Challenged inregions with less developed research and innovation (R&D) > triggering questions about the universal applicability of its concepts and methods. Challenges: smart specialisation Needs to be more open to incorporating foreign direct investment (FDI) and global value chains (GVCs) into its conceptual discourse and its policy Needs strengthening policy delivery rather than policy design The entrepreneurial discovery process (EDP) implicitly assumes a mature institutional framework, which is hardly realistic in the case of regions with less developed R&I systems Examples Source Source
- 25. State-of-the-art regional developmenttheories highlight the important role of informal institutional factors such as Challenges: smart specialisation Trust Responsibility Professionalism Partnership and Shared leadership (McCann and Ortega-Argile´s 2014) This contrasts with the under-developed institutional framework in lagging-behind regions, which together with risk-averse or “play it safe” mentality > limits the space for experimentation, manoeuvre and flexibility in decision-making and public initiatives Several factors could hinder implementation A potential solution to this problem lies in the improvement of multi-scalar coordination (Asheim et al. 2011; Todtling et al. 2013).
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- 27. Slow innovation (e.g.Mayer; Steen & Dhondt) New Directions in Economic Geography Many innovation policies seem to be based on the idea that speed is good More than speed, society needs room for exploration, reflection and learning, and attention for social processes within innovation projects, in order to make these projects have significant and sustainable impact If we stress speed as the most critical performance element of innovation, then we transform the innovation process into a technocratic approach with the wrong elements at the core. need for speed
- 28. Slow innovation: oneline of reasoning Innovation that is good for the planet and people (Loch et al. 2005). Quick-fixes or one-size-fits- all will not help innovation - we should be thinking in terms of guiding principles which can help us maximize chances for innovations to happen.
- 29. Slow innovation: alternativeline of reasoning (Shearmur 2015). An unspoken assumption (Glaeser 1999; Shearmur 2012) that innovation is essentially an urban phenomenon since interactions and networking are facilitated by the geographic co-mingling of actors. Principle Proximity between actors—a proximity that enables information exchange and collaboration— is crucial (Boschma 2005; Carrincazeaux and Coris 2011)…. Innovation unfolds mainly Innovation takes place in creative cities (Florida 2002) Or in larger metropolitan areas (Glaeser 2011) Patents and new products are more likely to be introduced in large cities (Acs, Anselin, and Varga 2002; Audretsch and Feldman 1996)
- 30. Innovation processes innon-urban geographies also occur Slow innovation: alternative line of reasoning Research that describes innovation in places that are not particularly well connected (Cooke 2011; Fitjar and Rodriguez-Pose 2011; Knox and Mayer 2009). As a result, innovation theories do not sufficiently consider the context of the periphery and how this context may foster or hinder the development of innovative products, technologies and services (Mayer)
- 31. Explanations for thisare varied > exploit local knowledge: These isolated places may replace buzz and geographic proximity by various types of social and network proximity, may rely on local knowledge that is difficult to communicate, may be closely connected with local resources, or may innovate in certain areas Environmental sustainability Agriculture Nature-oriented tourism activities for instance, which are areas often overlooked by large-city protagonists. Slow innovation: alternative line of reasoning
- 32. Slow innovation: lessons Innovationprocesses based on local knowledge and slow principles Small and Medium-Sized Towns (Servillo et al, 2017; Dijkstra, Garcilazo & McCann, 2013; ESPON, 2013) Prosperous or advanced urban-regions (Kemeny & Storper, 2020; Hersperger et al. 2019 ; Fratesi & Wishlade, 2017) Low-growth and low-income regions as in ‘The lagging regions report’ (EU Commission, 2017) Counteract mainstream geography of innovation
- 33. Small and medium-sizedtowns (SMSTs) have long been overlooked in the urban and economic geography literature. However, in recent years, scholars have started to pay attention to these types of urban places. This is in part due to the fact that recent empirical studies have shown that in industrialized countries, smaller cities (and even rural areas) have performed better in terms of population and economic growth than advanced urban regions (Dijkstra, Garcilazo, & McCann, 2013; McCann & Acs, 2011). Slow innovation in peripheral territories
- 34. Lagging regions, SMSTsand local communities within > still matter to secure cohesive regional development patterns (McCann & Ortega-Argilés, 2019). *A number of non anglophone sources concur with this argument Source of economic and social dynamism for many prosperous urban regions (Kemeny and Storper, 2020; Rodríguez-Pose, 2018)* (Torres de Araujo 2020 Rodrigues Carvalho 2018 Pinilla & Sáez 2017) Slow innovation in peripheral territories
- 35. Slow Innovation: how? (Knoxand Mayer 2013) Aligns > territorial governance > evolutionary EG > Local values
- 36. Slow innovation >Fast innovators Slow innovators interact with less frequency and rely on slow- decay information and knowledge, whereas Fast innovators interact with higher frequency and rely on faster decaying information and knowledge. Currid (2007) shows, success in fashion rests on the rapidity with which new trends can be identified, validated, and translated into clothes that can be sold. Designers need to be in the thick of a major metropolis Responding to market(ing); consumers
- 37. Slow innovators areless dependent on intensive outside interactions—which does not imply that they have a lower variety of external contacts, just that their outside interactions are > less frequent and probably > more strategically chosen. Keep in mind that in “fast” environments > the quantity of false information, useless knowledge, and failed collaborations, presumably far higher for fast innovators in interaction-intensive environments. > Metropolitan environments attract innovators who proceed by trial and error, whereas smaller cities attract innovators operating in a more stable; long-lasting environments. Hypothesize that: Slow innovation may be the key to transforming the economy towards a renewed industrial path (neo-industrial development) > adopting sustainability-oriented practices Slow innovation > slow innovators
- 38. Slow innovation >slow innovators Periphery as a space in which creativity can more freely unfold because innovators are positioned at the fringes and are more free to experiment with unconventional ideas (Grabher 2018).
- 39. Slow innovation >slow innovators High-performance sports gear and wear — will not be reacting to short-term market signals Whilst there are fashions in these industries, market signals are fairly constant: safer, tougher, and more appropriate equipment for a harsh environment. Firms that have already developed products based upon this type of knowledge may be better able to do so again. Such innovators have no pressing need to be located in proximity to a cluster or large urban area. (Malerba 2002)
- 40. Norddeutsches Doktorandenkolloquium Wirtschaftsgeographie 25.bis 26. Februar 2 021 Territorial autonomy (endogenous development dynamics) Regional determinism (exogenous development dynamics)
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- 42. Mission-oriented innovation policies Source Beforeadvancing > this discussion aligns with
- 43. Mission-oriented innovation policies Mission-orientedinnovation policy responds to these ‘grand challenges’ by identifying and articulating concrete problems that can galvanise production, distribution, and consumption patterns across various sectors. In doing so it recognises that: Economic growth has not only a rate but also a direction Innovation requires investments and risk taking by private and public actors The State has a role in co-creating and shaping markets Successful innovation policy combines the need to set directions from above with the ability to enable bottom up experimentation and learning Missions may require consensus building in civil society. Source Mazzucato 2018
- 44. Mission-oriented examples German Energiewende Focuseson concrete problems that require system-wide transformation across different types of sectors, and involves partnerships between different actors (private, public, third sector, civil society) Going to the moon required innovation in aeronautics, robotics, textiles, and nutrition etc Mazzucato 2018
- 45. “mission-oriented” policies thatare aimed at achieving specific objectives Mission-oriented innovation policies Must enable bottom-up experimentation and learning so that the innovation process itself is nurtured through dynamic feedback loops and serendipity (Rodrik, 2004) Mission-oriented policies are not just about throwing funds at problems but doing so in specific ways For examples in Germany (Cantner and Pyka 2001) Mazzucato 2018
- 46. The activerole being taken by governments and transnational organizations to develop strategies for a greener economy can be seen through a mission- oriented lens—as can those being developed to create more wellbeing for an ageing population, and better jobs for modern youth (European Commission, 2011) In fact, these challenges—which can be environmental, demographic, economic, or social—have entered innovation policy agendas as key justifications for action, providing strategic direction for funding policies and innovation efforts Mission-oriented policies can be defined as systemic public policies that draw on frontier knowledge to attain specific goals
- 47. A mission-oriented approachhighlights the need to make a precise diagnosis of the technological, sectoral, or national innovation system that an innovation policy wishes to transform Mission-oriented policies as place-based Missions should be well defined. More granular definition of the technological challenge facilitates the establishment of intermediate goals and deliverables, and processes of monitoring and accountability Mazzucato 2018 A mission does not comprise a single R&D or innovation project, but a portfolio of such projects. Because R&D and innovation is highly uncertain, some projects will fail and others will succeed. All concerned should be able to accept failures and use them as learning experiences. Missions should result in investment across different sectors and involve different types of actors. To have highest impact, missions should embrace actors across an entire economy, not just in one sector and not just in the private or public realm. Missions require joined up policy making, whereby the priorities are translated into concrete policy instruments and actions to be carried out by all levels of the public institutions involved. While these missions should involve a range of public institutions, it is crucial that there is a strategic division of labor among them, with well-defined responsibilities for coordination and monitoring.
- 48. Choosing and implementingmission- oriented policies Missions should be broad enough to engage the public and attract cross- sectoral investment and remain focused enough to involve industry and achieve measurable success > Missions stimulate the development of a range of different solutions to achieve the objective Mazzucato (2018) From challenges to missions A culture of experimentation and risk-taking is a crucial element in the philosophy of missions.
- 49. SDG 14 “Conserveand sustainably use the oceans, seas and marine resources for sustainable development” could be broken down into various missions, for example “A plastic-free ocean.” Innovation This could stimulate research and innovation in means to clear plastic waste from oceans or in reducing use of plastics, innovation in new materials, research on health impacts from micro-plastics, behavioral research, and innovation to improve recycling or drive public engagement in cleaning up beaches. Each of these areas can be broken down into particular “projects.” Mazzucato (2018)
- 50. Choosing and implementingmission- oriented policies Societal relevance Ambitious but realistic research and innovation actions This mission could have a clear target to reduce the amount of plastic entering the marine environment by 90%, and of collecting more than half of the plastic currently present in oceans, seas, and coastal areas by 2025. Targeted, measureable, and time- bound Cross- disciplinary, cross-sectoral, and cross-actor innovation Multiple, bottom- up solutions > a combination of various solutions, focusing on different facets of the problem MISSION Bottom-up solutions Mazzucato (2018)
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- 52. Degrowth debate withinEEG ‘Degrowth’ became an interpretative frame for a new (and old) social movement where numerous streams of critical ideas and political actions converge. It is an attempt to re-politicise debates about desired socio-environmental futures and an example of an activist- led science now consolidating into a concept in academic literature. A project of voluntary societal shrinking of production and consumption aimed at social and ecological sustainability. It quickly became a slogan against economic growth (Bernard et al., 2003) Degrowth is a critique of the current development hegemony (Rist 2008).
- 53. Degrowth: Essence >alternatives The idea of ‘socially sustainable degrowth’ (Schneider et al. 2010), or simply degrowth, was born as a proposal for radical change. The contemporary context of neo-liberal capitalism appears as a post-political condition, meaning a political formation that excludes the political and prevents the politicization of particular demands (Swyngedouw 2007). Within this context, degrowth is an attempt to re- politicise the debate on the much needed socio-ecological transformation, affirming disagreement with the current world representations and searching for alternative ones.
- 54. Degrowth: streams asdegrowth Degrowth is therefore a possible path to preserve ecosystems by the reduction of human pressure over ecosystems and nature, and a challenge to the idea that decoupling of ecological impacts from economic growth is possible. Environmental goods are commonly cared Economic growth and development can be reconciled with earth's ecological limits (Hickel & Kallis, 2019; Kenis & Lievens, 2015).
- 55. Degrowth: streams asdegrowth The essence of this source is the emerging need for more meaning in life (and of life) in modern societies. It is a critique of life-styles based on the mantras of working more, earning more, selling more and buying more. Meaning of life and well-being The ‘meaning of life’ source of degrowth also draws on findings in the literature on the economics of happiness
- 56. Degrowth in thecontext of sustainability transitions The sustainability transitions research area studies the transformation of socio-technical systems. They consist of actors (individuals, firms, organizations, government structures), institutions (societal and technical norms, regulations, standards), material artifacts, and knowledge. Alternative value systems Crisis as opportunities Truly structural change beyond economic geography Khmara & Kronenberg 2020
- 57. Degrowth in thecontext of sustainability transitions Common grounds of degrowth and sustainability transitions. Role of technology Localism Bottom-up Politicization of science Scientific findings supporting policy-making Having technology fulfilling societal functions Mission-oriented Khmara & Kronenberg 2020 Grassroots innovation
- 58. (New) Directions inEconomic Geography Degrowth Sustainable development Addressing grand societal challenges Sustainability transitions Postcapitalism Diverse economies Green economy Circular economy Ecological modernization Socioeconomic restructuring Green deal Localism – regionalism of supply chains Postcolonial thinking Urban to rural Lagging places matter
- 59. It is timeto start crafting your topic
- 60. Non-transgression of planetaryboundaries Johan Rockstrom video GDP as an inadequate measure of human prosperity for a number of reasons. Does not reflect: Nonmarket economies The overall quality of social and ecological relations Ignores inequality Benedikt Schmid
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- 62. Lecture 1 -Introduction: economic geography and its recent paradigms Many thanks for attending this module I wish you all a successful semester