Capabilities in knowledge-based regional development – towards a dynamic framework

Abstract

Fund of South Ostrobothnia. We would like to acknowledge the support of professor Markku Sotarauta for his comments on the earlier drafts of this article. CAPABILITIES IN KNOWLEDGE-BASED REGIONAL DEVELOPMENT -TOWARDS A DYNAMIC FRAMEWORKThere are only a few studies dealing with capabilities in the knowledge-based regional development and especially in the implementation of contemporary innovation policy. Drawing upon the resource-based view, the capability perspective identifies combinations of regional resources and capabilities that generate competitive advantage. In light of theoretical and empirical advancement, this paper introduces a capability framework to reveal the multi-layered and dynamic nature of capabilities in knowledge-based regional development. The paper argues that in the regional context, it is important to consider and analyse 1) the organizational level resource and knowledge base and 2) ways in which the regional networks of organizations, engaged in knowledge-based development activities, exploit and renew regional resources and capabilities. The empirical analysis is based on personal in-depth interviews and document analysis. The findings indicate that studies on knowledge-based regional development should pay more attention to the capabilities of the actors involved in development processes.Innovation policy should be viewed as a means to mobilize, renew, build and acquire new resources and capabilities in a region and should aim to build and stimulate regional networklevel capabilities for economic renewal.

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