Scandinavian Working Papers in Economics

Working Paper Series in Economics and Institutions of Innovation,
Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies

No 20: Towards a Dynamic Theory for the Spatial Knowledge Economy

Charlie Karlsson () and Börje Johansson ()
Additional contact information
Charlie Karlsson: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology, Postal: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology, SE-100 44 Stockholm, and , Economics, JIBS, Box 1026, 551 11 Jönköping, Sweden
Börje Johansson: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology, Postal: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology, SE-100 44 Stockholm, and, Economics, JIBS, Box 1026, 551 11 Jönköping, Sweden, Sweden

Abstract: In recent decades the world has witnessed the emergence of a global knowledge economy. For example, the evolution in recent decades of the developed economies has been accompanied by a regional shift in economic activity away from traditional industrial regions to new agglomerations of high technology, creating an explosion of entrepreneurial activity and new firm formation. For the OECD countries in particular, we can observe a transfer from an industrial economy to a knowledge economy. The supporting evidences are overwhelming and indicate that the trend is global. The emerging knowledge economy have attracted much interest among economist and generated many important contributions during the last two decades. However, the literature does not provide a comprehensive picture and we are indeed lacking a “general theory” of the knowledge economy. Various aspects of the emerging knowledge economy has been thoroughly analysed both theoretically and empirically but the overall synthesis is not yet present. Something to ask for would be a coherent theoretical framework that can explain how growth-induced investments in knowledge production stimulate localised, entrepreneur-driven innovations, which generate structural change and economic growth in an integrated system of functional regions. An interesting observation is that many of the necessary building blocks already seem to exist but that they are still waiting for someone to integrate them. The current state-of-the-art also includes inconsistent components. The purpose of this paper is to contribute to such an integration of the existing pieces of knowledge.

Keywords: Knowledge; Economic Growth; New Economic Geography; Innovation Systems; Entrepreneurship

JEL-codes: M13; O31; O40; R11

31 pages, December 2, 2004

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