A Network-based view of regional growth

Abstract

The need to better understand the mechanisms underlying regional growth patterns is widely recognised. This paper argues that regional growth is partly a function of the value created through inter-organisational flows of knowledge within and across regions. It is proposed that investment in calculative networks by organisations to access knowledge is a form of capital, termed network capital, which should be incorporated into regional growth models. The paper seeks to develop a framework to capture the value of network capital within these models based on the spatial configuration and the nature of the knowledge flowing through networks.

Entrepreneurship, innovation and regional growth: a network theory

“…It has been proposed that the investment in calculative relations through which organizations gain access to knowledge to enhance expected economic returns is itself a form of capital, which can be termed network capital (Huggins 2010;Huggins and Johnston 2010;Kramera and Revilla Diez 2012;Kramera et al 2011;Lawton Smith et al 2012;Huggins et al 2012;Huggins and Thompson 2014;Fitjar and Huber 2014;Sleuwaegen and Boiardi 2014). Some scholars have pointed to networks endowed with social capital -in the form of interpersonal relationships -as a key lubricator of knowledge spillovers (Iyer et al 2005;Tura and Harmaakorpi 2005;Hauser et al 2007;Lorenzen 2007;Walter et al 2007;Tappeiner et al 2008;Cantner et al 2010;Vorley et al 2012).…”

“…Furthermore, whilst others have sought to integrate networks into a growth model, they do not explicitly incorporate entrepreneurship (Huggins and Thompson 2014). As a means of integrating both networks and entrepreneurship, Ha and Howitt' s (2007) general model of output can be used as starting base, which is given by:…”

“…As before, σR and σE represent the efficiency or productivity of incumbent firms and entrepreneurs in generating new knowledge. Huggins and Thompson (2014) suggest that R&D inputs in region (X) are a combination of the labour employed in research (LR) and the network capital of incumbent firms (W). In other words, network capital plays a similar role to entrepreneurial inputs alongside the entrepreneurial labour (LE).…”

“…The notion of network capital has been increasingly discussed and developed in the literature in recent years (e.g. Huggins 2010; Huggins and Johnston 2010;Kramera et al 2011;Kramera and Revilla Diez 2012;Lawton Smith et al 2012;Huggins et al 2012;Fitjar and Huber 2014;Sleuwaegen and Boiardi 2014;Huggins and Thompson 2014) and provides a useful means for accounting for the nature and value of the interactions and relationships required for knowledge to both 'spillover' and be captured. As has been suggested by others, networks concern investments in 'interaction capability', and as intangible capital structures should be analyzed as capital objects (Westlund 1999).…”

The Spatio-Relational Nature of Urban Innovation Systems: Universities, Knowledge Intensive Business Service Firms, and Collaborative Networks

“…According to Storper (1997: 44), 'the status of the region is now not merely as a locus of true externalities, but -for the lucky regions -as a site of important stocks of relational assets'. These relational assets in the form of the network capital of firms and other organizations (Storper 1997;Huggins 2010;Huggins & Thompson 2013;Huggins et al 2012;Huggins & Johnston 2010) and the social capital of individuals (Tura & Harmaakorpi 2005;Hauser et al 2007;Lorenzen 2007;Walter et al 2007;Tappeiner et al 2008) distinguish Storper's (1997) 'lucky' from 'unlucky' cities and regions, as well as forming part of the territorial capital of places, which includes not only relational assets but the wider set of natural, human, and organizational assets underpinning economic competitiveness (Camagni & Capello 2013;Camagni & Capello 2010;Capello et al 2011). At the urban and city level the notions of 'knowledge cities' (Carrillo 2004;Carrillo 2006;Yigitcanlar & Velibeyoglu 2008) and 'knowledge-based urban development' (Knight 1995;Knight 2008;Kunzmann 2008;Yigitcanlar & Lönnqvist 2013;Yigitcanlar 2009) have emerged as a means of examining in a systematic manner the role of knowledge and networks as key components of urban economic evolution.…”