Innovation and urban regions as national and international nodes for the transfer and sharing of knowledge

This paper examines the transfer and sharing of knowledge within and between regions in the context of the development of the international economy. It is argued that knowledge is a key resource for innovation which, in turn, is one of the major drivers of economic growth. The firms producing the most novel product innovations in the most significant regional concentrations of innovation are very adept at working across the interface of local and global knowledge transfers. Using data from previous studies combined with the latest regional data from the Community Innovation Survey 3, comparisons are made between the ways in which the most innovative firms in the Greater South East transfer and share knowledge from the local to the international level. The most innovative firms are shown to access international sources of knowledge. This raises questions over the relative importance of local versus international knowledge spillovers for the most innovative firms. Innovative firms tend to concentrate in a minority of key metropolitan regions. These are shown to combine a strong local knowledge capital base with high levels of connectivity to similar regions in the international economy. In this way they are able to combine and decode both codified and tacit knowledge originating from multiple regional, national and international sources. As a result they are able to generate virtuous circles of knowledge, innovation, competitiveness and exports.