The innovation paradox in regional innovation policy revisited

Robert Hassink, Pedro Marques
Regional innovation polices have developed strongly in Europe since the mid-1980s. This surge is mainly due to the increasing importance of the regional level with regard to diffusion-oriented innovation support policies (Cooke and Morgan, 1998; Asheim et al., 2003; Fritsch and Stephan, 2005). Partly supported by national and supranational support programmes and encouraged by strong institutional set-ups found in successful regional economies such as Baden-Wurttemberg in Germany and Emilia-Romagna in Italy, many regions in Europe have been setting up science parks, technopoles, technological financial aid schemes, innovation support agencies, community colleges and initiatives to support clustering of industries since the second half of the 1980s. The central aim of these policies is to support regional endogenous potential by encouraging the diffusion of new technologies both from universities and public research establishments to small and medium-sized enterprises (SMEs), between SMEs and large enterprises (vertical co-operation) and between SMEs themselves (horizontal co-operation). Over the years these policies have however been the target of strong criticism for a variety of reasons: for example Lovering (1999) claimed that the theory behind them was poorly developed and was in fact being led by a few policy makers’ desire to make claims about inexistent regional economic transformation; Tödtling and Trippl (2005) criticized one-size-fits-all approaches, on the basis that different regions suffer from different shortcomings, and that innovation policy should be designed with that in mind.

In this chapter we will focus on one particular shortcoming of regional innovation policies that has received relatively little attention: the innovation paradox, as defined by Oughton et al. (2002). It refers to the observed fact that lagging regions are often the ones with less capacity to make effective use of the policy instruments created to increase innovation potential. Therefore, innovation policies are likely to reinforce current regional inequalities, by allowing those firms in core regions to develop even further their potential. We will however argue that in line with recent work in Economic Geography we need to avoid looking at the region as a bounded, relatively closed entity (Hassink and Klaerding, 2012). As a way to build on this concept we will suggest a multi-scalar approach that considers not only the regional dimension, but also the organizational (below the region) and the national (above the region) scales. We will suggest that the effectiveness of innovation policy, particularly in poorer regions, results from the interaction between these three scales of activity.