Economic networks, innovation and proximity

This chapter argues that despite the identification of various forms of proximity impacting on localised innovation and economic growth, claims on certain proximity types dominating over other have to be treated with caution. Besides physical proximity, crucial for face-to-face contact and tacit knowledge exchange, economic network proximity is argued to be important for the distribution and application of novel ideas. Such networks, like research cooperation, trade- and investment related global networks, and labour market related networks of mobility, migration and skill-relatedness, are empirically shown to be complementary to physical proximity. Because of equivalence in network structures and outcomes (many forms of proximity overlap with each other), identifying dominance of proximity types is difficult. It is therefore increasingly advised that place-based development strategies of cities and regions should be complemented with interregional network strategies of various kinds. Yet, given the identified heterogeneity and complexity of direct and indirect relationships between economic networks, innovation and localised and clustered growth, this makes regional policy a much more complex task.