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The purpose of this paper is to point out some shortcomings of traditional approaches to the study of "knowledge spillovers" and to suggest an alternative based on how knowledge is actually created and exchanged by individuals. Which regional setting is the best incubator of technological change and economic growth? Is this promoted by regional diversity or specialization of economi activity? This study will include economic analyses of geographically localized "dynamic knowledge externalities, Jacob's externalities, or adding new work to old, industrial classification and technology combination, human creativity, and technology combination through human action and imaginative use of resources. Employees add to, or switch their product line; individuals move from one type of production to another; individuals observe a product/process in another setting and incorporate it; individuals possessing different skills and working for different firms collaborate; and urban diversity and resource collaboration are utilized. It is concluded that problems are solved through the combination of previously unrelated things and that promoting regional specialization at the expense of spontaneously evolved local diversity might be a counter-productive policy. Copyright 2001 Gatton College of Business and Economics, University of Kentucky.

Summary The exchange of wastes, by‐products, and energy among closely situated firms in the Danish city of Kalundborg has become the impetus to and main template for the movement to plan ecoindustrial parks. In recent years, however, similar by‐product exchange patterns have been observed in other regions of Europe and North America. Evidence also indicates that cities have historically played an important role in facilitating the creation of recycling linkages between different industries. If Kalundborg and other newly documented cases of localized interfirm recycling linkages are but contemporary manifestations of much older processes, then what are the policy implications for current attempts to plan eco‐industrial parks? This article explores this issue by looking at the economic incentives that have always led to the formation of cities and interfirm recycling linkages at both the local and interregional levels. A critique of current interpretations and policy prescriptions based on the Kalundborg case is then offered. I argue that current attempts to foster the development of eco‐industrial parks and eco‐industrial networks are too narrow in their geographical scope, that public planning is unlikely to prove more efficient than private initiatives, and that perhaps the most important lesson to be learned from Kalundborg is thevalue of a flexible regulatory framework.

HOW TO CITE TSPACE ITEMS Always cite the published version, so the author(s) will receive recognition through services that track citation counts, e.g. Scopus. If you need to cite the page number of the TSpace version (original manuscript or accepted manuscript) because you cannot access the published version, then cite the TSpace version in addition to the published version using the permanent URI (handle) found on the record page. Opening up the "Jacobs Spillovers" Black Box: Local diversity, creativity and the processes underlying new combinations.

Always cite the published version, so the author(s) will receive recognition through services that track citation counts, e.g. Scopus. If you need to cite the page number of the TSpace version (original manuscript or accepted manuscript) because you cannot access the published version, then cite the TSpace version in addition to the published version using the permanent URI (handle) found on the record page. Summary:Despite the fact that all successful documented cases of industrial symbiosis to this day have been self-organizing, some authors and development officials have suggested that increased public planning might deliver better results in this respect than spontaneously evolved market coordination. This paper takes an historical approach to suggest that comprehensive planning is unlikely to live up to the expectations of its proponents.The essay is structured as follows. The first section provides short case studies of industrial symbiosis in highly different economic and institutional settings, the essentially free-market regime of Victorian England and communist Hungary (1948Hungary ( -1989. The available evidence suggests that market coordination proved much more favorable to the emergence of industrial symbiosis, despite the elaboration of a comprehensive policy to that effect in Hungary. Insights derived from the so-called "Austrian" critique of central planning are then used to explain this paradox. The analysis presented suggests that the Hungarian planners' failure was not so much the result of the bad implementation of sound policies, but the logical outcome of a top-down approach's shortcomings. Policy implications for the public planning of industrial symbiosis in a mixed economy are then derived and the case for self-organization is found more compelling. The creation of more innovative institutions that will force firms to "internalize their externalities" while leaving them the necessary freedom to innovate is viewed as a more promising path towards increased sustainable reuse of industrial by-products.