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Journal of Economic Geography Advance Access published online on May 10, 2005
Journal of Economic Geography, doi:10.1093/jeg/lbh072
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© The Author (2005). Published by Oxford University Press. All rights reserved. For Permissions, please email: journals.permissions@oupjournals.org
Revised October 27, 2003
Accepted February 7, 2005

Article

Innovation, agglomeration, and regional development

Ian R. Gordon 1* and Philip McCann 2

1 Department of Geography and Environment, London School of Economics, Houghton Street, London WC2A 2AE, UK
2 Department of Economics, The University of Reading, Reading, RG6 6AW, UK

* To whom correspondence should be addressed.
Ian R. Gordon, E-mail: i.r.gordon{at}lse.ac.uk


  Abstract

This paper provides a critical examination of the widely disseminated view that innovation in all or most activities is favoured by certain common characteristics in the local ‘milieu’, involving a cluster of many small firms benefiting from flexible inter-firm alliances, supported by mutual information exchanges of both an informal and formal nature. The general applicability of this model, and the localness of crucial linkages, is questioned initially on the basis of a review of different hypotheses about the geography of innovation. Moreover, examination of new survey evidence from a large number of firms in the London conurbation suggests that the importance of specifically local informal information spillovers for successful innovation is very much more limited than has been suggested, as are the supposed advantages of firm smallness.

Keywords: Innovation; agglomeration; industrial clusters; innovative milieux.
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