The Geography of R&D: Tobit Analysis and a Bayesian Approach to Mapping R&D Activities in the Netherlands

Abstract

IntroductionOne of the key factors in economic development is technological innovation: the introduction of new or improved production techniques, products, and services. This is usually preceded by an intensive process of research and development (R&D). In this paper we address the spatial aspects of R&D activity.One might argue that the spatial aspects of R&D are not so important because R&D is only an input to the innovation process. The location where R&D takes place is not necessarily the place where the new products will be produced or where the new production techniques will be applied. In large firms, one may indeed observe clear distinctions between those locations where R&D and those where actual production takes place (see, for example, Chapman and Walker, 1992). And, in many cases, firms do not carry out the R&D themselves but simply buy improved products which have been developed by other firms. In this case`innovation' just means the adoption of new production techniques, or new products developed and produced at places that may be located anywhere in the world. Thus, the economic benefits of R&D have spatial distribution patterns that are not necessarily connected to the spatial distribution of R&D itself. Yet, the spatial aspects of R&D are important for at least two reasons. First, R&D is important as an economic activity per se. The long-run trend towards a knowledge economy (Malecki, 1991;Suarez-Villa, 1996) means that a substantial part of value added is created in this type of activity. In addition, although in large firms there is often a separation between R&D and production activities, such a separation is not always absolute. In smaller firms R&D and production take place at the same location. Successful R&D may then have a large impact on the development of the area involved.R&D-oriented firms offer well-paid jobs, are generally considered to produce little environmental nuisance, and are expected to have positive growth perspectives. Therefore it is no surprise that many regional and local governments are interested in attracting R&D-oriented firms to their area (see Camagni, 1991;Howells, 1984;Miller

How does industry specialization affect the efficiency of regional innovation systems?

“…There is also some evidence from other European countries. For the Netherlands, van Oort (2002) and Ouwersloot and Rietveld (2000) found positive relationship between regional diversification and innovation in manufacturing industries. Also for the Netherlands, van der Panne (2004) identifies a positive relationship between regional specialization and the probability of firms to announce a new product, while diversification was insignificant.…”

On the Marshall-Jacobs controversy: it takes two to tango

“…This corroborates with Kelly and Hageman (1999): ''the location of Research and Development (R&D) is determined more by the location of other sectors' innovation than by the location of its own production''. Using R&D labour costs data for the Netherlands, Van Oort (2002) also establishes diversification externalities for innovation in manufacturing industries, as do Ouwersloot and Rietveld (2000).…”

Intra and inter: regional knowledge spillovers in European Union

“…Paci and Usai (2000), found a positive relationship between industry specialization and innovative output at NUTS-1 regional level of European Union and Greunz (2004) reached at the same conclusion using data at NUTS-2. On the other hand, Ouwersloot and Rietveld (2000) and Van Oort (2002), using regional data from the Netherlands, recognized the positive correlation between regional diversity and innovative activity. Fritsch and Franke (2004) investigated the role of knowledge spillovers and R&D cooperation on innovation in three German regions.…”