learning, innovation and regional development

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Progress in Human Geography

DOI: 10.1191/0309132502ph371ra2002; 26; 293Prog Hum Geogr

Danny MacKinnon, Andrew Cumbers and Keith ChapmandebatesLearning, innovation and regional development: a critical appraisal of recent

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Learning, innovation and regionaldevelopment: a critical appraisal of recent debates

Danny MacKinnon,1 Andrew Cumbers2 and

Keith Chapman1

1Department of Geography and Environment, University of Aberdeen, Elphinstone

Road, Aberdeen AB24 3UF, UK2Department of Geography and Topographic Science, University of Glasgow,

Glasgow G12 8QQ, UK

Abstract: A resurgence of interest in the region as a scale of economic organization has beenapparent within economic geography over the past decade or so. In view of the apparent shift

towards a ‘knowledge-driven economy’, the capacity of regions to support processes of learningand innovation has been identified as a key source of competitive advantage. This paper

provides a critical appraisal of recent work on innovation, learning and regional development,situating this within its intellectual context. We argue that, while the focus on knowledge and

learning is highly relevant, much of the literature fails to adequately ground its arguments inempirical enquiry and also tends to underemphasize the importance of wider extra-local

networks and structures. In conclusion, we offer some directions for further research.

Key words: globalization, innovation, knowledge, learning, networks, new regionalism,regional development, regions, scale.

I Introduction

A resurgence of interest in the region as a scale of economic organization and politicalintervention has been apparent within economic geography and regional developmentstudies over the past decade or so (Amin and Thrift, 1994; Cooke and Morgan, 1998;MacLeod and Jones, 1999; Maskell et al., 1998; Morgan, 1997; Scott, 1988; 1996; Storper,1995a; 1997). At first sight, this seems paradoxical, given the prevailing emphasis on

Progress in Human Geography 26,3 (2002) pp. 293–311

© Arnold 2002 10.1191/0309132502ph371ra © 2002 SAGE Publications. All rights reserved. Not for commercial use or unauthorized distribution. at PENNSYLVANIA STATE UNIV on February 12, 2008http://phg.sagepub.comDownloaded from







294 Learning, innovation and regional development

globalization as perhaps the political and economic metanarrative of the 1990s (Heldand McGrew, 2000). In many ways, however, it is precisely this tendency for productionand finance to become increasingly globalized that explains much of the renewedconcern with regions. As a consequence, national economic coherence has beenundermined, reducing states’ control over flows of investment and directly exposingregions to the effects of international competition. This has focused attention on theneed for regional-level intervention if regions are to be able to shape their owndevelopment prospects in a climate of rapid technological change and increased capitalmobility (Amin and Thrift, 1994). In view of the apparent shift towards a ‘knowledge-driven economy’, the capacity of regions to support processes of learning andinnovation has been identified as a key source of competitive advantage (Cooke, 1998;Cooke and Morgan, 1998; Henry and Pinch, 2000; Lundvall and Johnson, 1994; Storper,1997). Economic geographers and regional theorists have advanced a number of overlapping concepts – ‘relational assets’, ‘learning regions’, ‘social capital’, ‘institu-

tional thickness’, ‘associational economies’ – which emphasize the importance of knowledge and learning (Amin and Thrift, 1994; Cooke and Morgan, 1998; Morgan,1997; Putnam, 1993; Raco, 1999; Saxenian, 1994; Storper, 1997).

The proliferation of these concepts reflects a focus on social and institutionalconditions within regions in terms of how they shape processes of economicdevelopment (Hudson, 1999b). This represents a discernible movement away from theearlier concern with material linkages and transaction costs (Scott, 1988). Lovering(1999) presents a powerful critique of this ‘new regionalism’, however, identifying ageneral neglect of exogenous forces such as capital and the state and a tendency toabsorb the ‘boosterist’ rhetoric of regional policy-makers as particular weaknesses.

Other critics have suggested that the theoretical vitality of contemporary work ineconomic geography is matched by a worrying lack of empirical rigour, and anincreasing policy irrelevance (Markusen, 1999; Martin, 1999b).1 Yet, while Lovering hasidentified some important limitations of ‘new regionalist’ work, his arguments alsotend to exaggerate the coherence of regionalist discourses, eliding the differences

between distinct strands of analysis (MacLeod, 2001). By contrast, this paper aims tounpack the ‘new regionalism’ in terms of locating and assessing different approaches,uncovering key arguments and propositions, and identifying some directions forfurther research. The paper argues that, while work on innovation, learning andregional development offers a set of useful insights into contemporary processes, much

of the literature fails to adequately ground its arguments in empirical enquiry and alsotends to underemphasize the importance of wider extra-local networks and structures.

Following this brief introduction, the paper consists of four sections. First, we try toplace the recent interest in learning, knowledge and innovation within its intellectualcontext, particularly in relation to evolving debates about agglomeration and regionalgrowth. This is followed by a detailed review of the literature on innovation andregional development which assesses ideas of ‘innovative milieux’ and industrialdistricts, and considers how they have been deployed in empirical studies. Third, wediscuss recent work on ‘learning regions’, arguing that, while the focus on knowledgeand learning is highly relevant, the literature suffers from serious inadequacies in termsof how these processes are conceptualized. Finally, we try to summarize the strengthsof contemporary theories of innovation and learning, and provide some indications asto possible directions for further research.








II Agglomeration revisited? Situating the ‘new regionalism’

The shifting balance between processes of spatial agglomeration and dispersal is anissue that has attracted much attention within economic geography in recent decades.Following the ‘quantitative revolution’ of the 1960s, insights from an earlier generationof neoclassical location theories were brought together to construct generalized modelsof agglomeration and spatial development (Isard, 1956; Smith, 1966). In the 1970s,however, dissatisfaction with the assumptions and limitations of this ‘spatial science’led to a search for new approaches. In this context, Marxism became the key source of theoretical inspiration for a radical geography that viewed regional differentiation asthe product of the uneven development of capitalism through time and space (Harvey,1982; Massey, 1984). While the decentralization of production to lower-cost locationshad been a key feature of the economic landscape in the 1970s and early 1980s, renewedgrowth in the mid- to late 1980s encouraged a new focus on agglomeration and

‘clustering’ (Scott, 1988). Significantly, this resurgence of interest was not confined toeconomic geographers but included researchers in other social science disciplines (e.g.,Piore and Sabel 1984; Porter, 1990; Krugman, 1991). Three distinct strands of researchcan be identified.

First, a Californian school of economic geographers (Scott, 1988; Storper, 1995a;Storper and Scott, 1989) argued that firms were adopting strategies of vertical disinte-gration in response to changed market conditions. Increased externalization of production was held to encourage agglomeration, since spatial proximity ensured thattransaction costs could be minimized, particularly where transactions were frequent,unpredictable or complex (Scott, 1988). As such, the rise of ‘new industrial spaces’ was

explained mainly through an analysis of changing organizational structures and input-output relations (traded interdependencies). Second, another group of scholars argued,from a somewhat different perspective, that the economic success of certain districts of central and northeastern Italy – which became known as the ‘Third Italy’ – was boundup with an ongoing shift from mass production to ‘flexible specialization’ (Brusco, 1982;Piore and Sabel, 1984). In contrast to Scott’s efforts to produce an economic model of agglomeration based on transaction costs, the flexible specialization school emphasizedthe importance of wider social and institutional supports.

A third strand of work, emanating from mainstream economics (Krugman, 1991;1995; Porter, 1990; 1996; Venables, 1996), seeks to account for the continued and even

enhanced agglomeration of economic activity at regional and national scales in an eraof improved transport and communications technology. This ‘new geographicaleconomics’ (Martin, 1999a) emphasizes the importance of increasing returns to scale (asopposed to constant or diminishing returns) as crucial to the formation of locally orregionally based advantages (Myrdal, 1957; Hirschman, 1958). It also draws attention tothe endogenous character of these advantages which are ‘created’ in a particular place.Although ‘new’ to economists, Martin (1999a: 70) suggests that, ‘the industrial agglom-eration models of the “new economic geography” generate a dull sense of déjà vu’ (togeographers) – a throwback to the formal spatial analysis associated with regionalscience in the 1960s. As such, this approach is at odds with current thinking ingeography (Amin, 1999; Storper, 1997). It has necessarily resulted in a very partial viewof the forces promoting agglomeration, as attention has focused ‘only on those exter-nalities that can be mathematically modelled’ (Martin and Sunley, 1996: 285), notably

Danny MacKinnon et al . 295









market-size effects deriving from the proximity of suppliers and customers (Krugman,1998).

As indicated earlier, the translation of earlier interest in agglomeration and newindustrial spaces into a focus on ‘learning regions’ and ‘innovative milieux’ (Amin,1999; Camagni, 1991; Cooke and Morgan, 1998; Storper, 1997) during the 1990s isindicative of a general shift away from input-output relations and material linkagestowards a broader concern with the social and institutional foundations of growth(Lawson et al., 1998).2 This orientation seems to reflect the increased importance of theseextra-economic relations as sources of competitive advantage in the globalizing,knowledge-driven economy of the 1980s and 1990s (Jessop, 2000). In terms of how suchrelationships are actually represented, two key theoretical influences can be identified.First, there has been a resurgence of interest in ideas from evolutionary and institution-al economics (Arthur, 1994; Nelson and Winter, 1982; Hodgson, 1993) which stress theimportance of path dependency and the role of institutions in shaping economic

development trajectories (Amin, 1999; Cooke and Morgan, 1998; Storper, 1997).Essentially countering the abstract universalism of the neoclassical school, these per-spectives emphasize the importance of temporal and (more implicitly) spatial variation,caused by specific institutional rules and practices that govern economic action. Overtime, particular choices, themselves framed by past decisions, open up new pathwaysof economic development, but preclude others (Arrow, 1962). Thus, the future becomes,in a sense, ‘locked in’ to a fated path which reflects feedback mechanisms based onincreasing returns to scale.3 Second, work in economic sociology on ‘embeddedness’(Granovetter, 1985) has directed attention towards the importance of locally specificsocial and institutional factors in shaping economic development, particularly in terms

of supporting innovation and entrepreneurship through the development of collabora-tion and trust between firms and organizations (Amin and Thrift, 1994; Keeble et al.,1999; Morgan, 1997).

At the same time, the current emphasis on endogenous regional capacities as sourcesof economic success (Hudson, 1999b) represents an important continuity with earlierwork on new industrial districts and spaces. Another key parallel trend concerns thetendency for accounts of learning and innovation to be framed in epochal terms as partof a broad societal shift, exemplified by Lundvall’s oft-cited claim that capitalism hasentered a new stage in which knowledge is the most important resource and learningthe most important process (Lundvall, 1994; cf. Cooke and Morgan, 1998: 17; Florida,

1995a). In this context, Lagendijk and Cornford (2000) highlight the growth of a‘regional development industry’ in recent years, orientated towards the production andcirculation of knowledge in the forms of reports, conferences and seminars. Theconcepts of ‘learning regions’ and ‘clusters’ in particular have attained hegemonicstatus within contemporary regional development discourses.4 This can only beexplained in terms of the broader context within which regional development agencieshave had to operate in recent years. In a climate of increasing globalization, the turntowards neoliberal forms of regulation has exposed regions to increased competitivepressures (Jessop, 1994). This has created a demand for new concepts and models of development which offer guidance on how to increase competitiveness and fosterinnovation, as regional agencies strive to promote and defend the interests of ‘their’areas in the face of increasing competition for investment and resources (Hudson,1999b: 12; Peck and Tickell, 1994).








This section has attempted to track the evolution and development of regionalistthought within economic geography. In broad terms, earlier conceptions of agglomera-tion which emphasized the importance of material linkages between proximate firmshave given way to a focus on endogenous regional capacities in the 1990s (Amin andThrift, 1994; Camagni, 1991; Cooke and Morgan, 1998; Morgan, 1997; Piore and Sable,1984; Storper, 1997). As we have suggested, this latter body of ‘new regionalist’ work(Lovering, 1999) is made up of various diverse strands and influences. One problem,however, concerns the tendency to take the foundational concept of ‘the region’ forgranted (Lovering, 1999; MacLeod, 2002), with much of the work on regional economicdevelopment remaining isolated from broader analyses of the production and transfor-mation of regional space (Harvey, 1982, 1985; Massey, 1991; Paasi, 1991; Pred, 1984). Inthis respect, the work of some prominent ‘new regionalist’ writers carries distinctechoes of earlier claims about the status and meaning of ‘localities’ (Cooke, 1989; Coxand Mair, 1991). In particular, the implicit claim that regions can somehow be regarded

as distinct objects with causal powers of their own can be seen as a form of spatialfetishism that tends to elide intraregional divisions and tensions.

III Innovation and regional development

In the 1990s, a number of influential commentators linked the apparent resurgence of regional economies to the increased importance of collaborative forms of innovationand learning within contemporary capitalism (Cooke and Morgan, 1998; Florida, 1995a;Storper, 1995a; 1997). While debates about ‘learning regions’ are addressed in the next

section, here we focus on the connections between innovation and regionaldevelopment. The concept of ‘innovative milieu’ – which became increasinglyinfluential during the 1990s – retains much of the ‘bottom-up’ perspective associatedwith earlier writings on industrial districts (Piore and Sabel, 1984; Hirst and Zeitlin,1991; Sabel, 1994). Research has generally taken intraregional networks as the primaryobject of analysis before subsequently tracing external connections to the globaleconomy.

1 From industrial districts to innovative milieux?

The work of the GREMI school of economists in continental Europe has played animportant role in advancing our understanding of local and regional developmentprocesses. Researchers associated with the GREMI approach have moved beyond workon industrial districts by emphasizing the importance of dynamic collective learningprocesses in supporting innovation and growth within local milieux (Camagni, 1991;Capello, 1999; Keeble et al., 1999). In his theoretical account of milieu development,Camagni (1991) rejects the assumptions of mainstream economics, emphasizing insteadthe problems of uncertainty confronting firms. In order to enable them to process andutilize imperfect information, firms tend to develop a number of new functions androutines relating to searching, screening, transcoding, selection and control.5 In thiscontext, the local milieu functions as an ‘operator’ situated between markets and orga-nizations (hierarchies) which reduces uncertainty by supporting the organized interde-










pendence of local firms (Camagni, 1991: 132). In addition to the ‘synergy space’ of thelocal milieu, however, firms can also benefit from the ‘cooperation space’ of interfirmnetworking, enabling them to escape some of the limits to the effectiveness of milieux(Camagni, 1991). While this emphasis is suggestive of a tension between maintainingthe milieu and seeking competitive advantage elsewhere through new extra-locallinkages, Camagni argues, somewhat optimistically, that his use of the concepts milieuand networks is in fact complementary, since the former has to periodically receiveexternal inputs to avert the dangers of ‘lock-in’. However, the GREMI school’s accountof innovative milieux is weakened by a general preference for abstract theory overempirical ‘testing’ and a related failure to specify with any degree of precision the keymechanisms by which proximity and cooperation generate innovation within milieux(Asheim, 1996; Storper, 1995a: 203).

The work of Camagni and the GREMI school is underpinned by a distinctiveconception of innovation derived from evolutionary economic theory (Nelson and

Winter, 1982; Hodgson, 1993; Storper, 1997). Whereas orthodox theory has largelytreated technology as an exogenous input to the economic process, heterodoxapproaches view it as a crucial endogenous determinant of economic development andchange (Freeman, 1994; Hodgson, 1993; Nelson and Winter, 1982).6 Recent studies haverejected traditional linear models to argue that innovation is best characterized as aninteractive process that relies on tacit knowledge and skills (Cooke and Morgan, 1998;Freeman, 1994; Lawson and Lorenz, 1999; Nelson and Winter, 1982). A key threadunderpinning this emphasis on interaction is a clear recognition of the importance of incremental forms of innovation involving relatively minor improvements in the designand operation of products as against the radical technological changes that have tradi-

tionally captured the interest of academics and policy-makers (Freeman, 1994).Innovation in this sense refers to a continuous process of technical improvement, akinto the Japanese ‘kaizen’ concept. Using this broader definition, it becomes clear that theactivities of transnational branch plants and SMEs located in peripheral regions can,under certain circumstances, be regarded as innovative (Cooke and Morgan, 1998;Morgan, 1997).

2 Grounding the milieu concept

In terms of empirical research addressing the relationship between innovation andregional development, Saxenian’s work on the contrasting fortunes of Silicon Valleyand the Route 128 district in Massachusetts (Saxenian, 1994) has attracted considerableattention (Gertler, 1995b; Storper, 1995b). Much of the originality and persuasiveness of Saxenian’s account is rooted in two key aspects of her approach. First, a comparativeresearch design, based on the selection of two regions within the same nation state withsimilar sectoral and product mixes, allows her to control for these factors and effectivelyisolate the effects of regional cultures and institutions as the key set of variables(Gertler; 1995b; Storper, 1995b). Second, there is a strong longitudinal dimension toSaxenian’s work involving successive interviews with owners and managers of leadingfirms and organizations over a decade or so. In contrast to other studies offering‘snapshots’ of regional growth, this enables Saxenian to assess how the two regionshave adapted and responded to economic change. Drawing on a rich set of interview








materials, the author explains the contrast between the continuing dynamism of SiliconValley and the relative stagnation of Route 128 as a product of the former’s reliance oncooperative networking arrangements, which promote flexibility and collaborativelearning, and the latter’s experience of mounting organizational rigidities through itscontinuing orientation towards vertical integration and product standardization(Saxenian, 1994). One limitation of Saxenian’s work, however, concerns her failure toconsider the relationship between regional and national scales of regulation, particu-larly in terms of the effects of national policies and programmes in underpinninggrowth at the regional level (Gertler, 1995b; Markusen, 1999).

The work of the ESRC Centre for Business Research at the University of Cambridgeon the networking processes and embeddedness of small firms located in the universitycities of Oxford and Cambridge is also relevant in terms of its efforts to operationalizeideas of ‘untraded interdependencies’ and ‘collective learning’ (next section) (Keeble etal., 1997, 1999; Lawson et al., 1998). This concern with operationalization and

measurement led the researchers to identify three key mechanisms of learning relatingto the extent of local spin-off from existing organizations through the formation of newenterprises, the level of interfirm interaction, and flows of skilled personnel betweenfirms (Keeble et al., 1999: 324–26). The importance of these processes of knowledgecirculation is explored through a detailed interview survey covering 50 firms in eachregion (Keeble et al., 1997; Lawson et al., 1998). The work of the Cambridge teamprovides a careful and balanced account of processes of interfirm networking whichassesses the relative significance of local linkages vis-à-vis global networks. Itovercomes the tendency to assume that local networks are invariably beneficial byasking firms about the significance of geographical proximity and by acknowledging

potential problems of competition and dependency between firms (Lawson et al., 1998).As a consequence, the Cambridge research has much to offer those seeking to conductempirical research on innovation and learning among SMEs, although its specific focuson technology-orientated firms means that the definitions and indicators adopted maynot be transferable to other regional contexts. One issue which is not addressed,however, is that of the long-term sustainability of the Cambridge and Oxfordeconomies in terms of the need for ongoing adjustment to the accelerating pace of change in technology and global markets.

Another prominent research project which addresses issues of innovation andlearning is the work by Henry and Pinch on agglomeration and knowledge circulation

within the British motor-sport industry (Henry et al., 1996; Henry and Pinch, 2000;Pinch and Henry, 1999a; 1999b). Henry and Pinch seek to operationalize Storper’snotion of ‘untraded interdependencies’ (Storper, 1997), conceiving of Motor SportValley (MSV) – the ‘cluster’ of car-producing and supplying firms located inOxfordshire and adjacent counties in southeast England – as a distinctive ‘world of production’ articulated by an underlying set of conventions and practices which framethe actions of constituent firms and individuals (Henry and Pinch, 2000; Pinch andHenry, 1999b). They explain the continuing success of MSV in terms of its capacity forcontinuous learning and innovation (Pinch and Henry, 1999a: 675). In a similar fashionto the Cambridge study discussed above, Henry and Pinch examine the concretemechanisms through which knowledge is disseminated, such as staff turnover, theformation of new firms, the development of career trajectories, and more informalexchanges based on gossip and rumour.










The main contribution of Henry and Pinch is to have provided a convincingempirical demonstration of how processes of knowledge circulation and learningactually operate within a particular local milieu (Henry and Pinch, 2000: 206). Whilethey certainly succeed in identifying and specifying intangible dimensions of theagglomeration process, however, relationships between MSV as a ‘world of production’and broader processes of capitalist development receive far less attention. In thiscontext, Henry and Pinch (2000: 205–206) recognize that the generation and circulationof advanced knowledge within MSV reflects its position as the ‘pioneer district’ withinthe global motor-sport industry. Yet their analysis offers little further indication as tohow this concentration of knowledge might function as part of a broader spatialdivision of labour which effectively locks other regions into subordinate positions. Incommon with most research informed by ideas of learning and the ‘knowledgeeconomy’, this study also raises questions about the relationship between knowledgeand power which can only be addressed, as Henry and Pinch (2000: 207) concede, by

situating analyses of regional agglomerations and ‘clusters’ within a broader politicaleconomy of capitalism.The studies reviewed above share a concern with tracing the mechanisms by which

knowledge is generated and circulated within regional production systems. Yet muchof this work tends, with some notable exceptions (Saxenian, 1994), to provide snapshotsof successful regions. As a consequence, the key issue of adaptation to changingexternal circumstances is rarely addressed in an adequate and sustained way. Whilemuch of the initial success of industrial districts was rooted in their capacity to supportincremental forms of product and process innovation, this is unlikely to be sufficient tosecure sustainable growth in the long term as districts grapple with the problems of

being simultaneously ‘locked in’ to increasingly exhausted technological trajectoriesand ‘pulled out’ into wider globalized networks of investment and exchange (Asheim,1996; Cooke and Morgan, 1998). Prospects for growth are thus strongly dependent ontheir capacity to adapt to change (Amin and Cohendet, 1999; Asheim, 1996; Belussi,1996; Cooke and Morgan, 1998). It is in this sense that debates about learning regions

become pertinent.

IV Learning regions and the knowledge economy

Accounts of learning regions and innovative milieux share a concern with the creationof sustainable localized advantages in the face of increasing global economicintegration. Unlike the industrial districts literature, however, which reflects a ‘bottom-up’ perspective on regional development, the learning region concept has evolved froma set of essentially ‘top-down’ prescriptions of the links between innovation andeconomic success against a background of globalization. More specifically, the notion of learning regions can be seen to have emerged out of a concern to channel insights fromthe broader literature on national systems of innovation (Lundvall, 1992; Nelson, 1995)into a ‘new regional science’ (Cooke, 1998; Cooke et al., 1998). While these ideas initiallyprovided a set of prescriptive tools for assessing regional performance, more recentwork has incorporated them within the development of the learning region as an iden-tifiable theoretical construct (Morgan, 1997). As we argue in this section, one of theproblems associated with the transfer of ideas about learning and innovation from








national to regional levels concerns the failure to recognize the specificity of the‘national’ and the ‘regional’ as distinct scales of political-economic organization.

1 Key propositions

While questions of knowledge creation and regional development have been addressedfrom a range of perspectives (Cooke and Morgan, 1998; Florida, 1995a; Maskell et al.,1998; Porter, 1990; Storper, 1997), it is worth detailing the common propositionsapparent in the literature on learning regions. First, rather than leading to the annihila-tion of place-based advantages, globalization is actually held to be associated with theemergence of new forms of agglomeration based around knowledge creation (Storper,1997). In a world where increasing efforts are made to codify knowledge and render itubiquitous or cosmopolitan (Maskell et al., 1998; Storper, 1997), those places that

become the repositories for tacit, specialized local knowledges can derive considerableadvantages.

Second, there is claimed to be an increasing tendency for these non-materialadvantages, rooted in sets of social relations between firms and institutions, to belocated at the regional rather than the national level (although different authorsemphasize different scales). A key departure from the earlier industrial districts debateis that such ‘relational assets’ or ‘untraded interdependencies’ are seen as key sourcesof learning (Storper, 1995a; 1997) which enable certain regions to respond and adapteffectively to changes in the external market environment.

A third feature is that tendencies towards agglomeration in learning regions are

associated with increased sectoral specialization (Malmberg and Maskell, 1997). Theincreased importance of knowledge as a source of competitive advantage is likely toincrease the tendencies for clusters of specialist and related industries to develop inparticular places. The importance of ‘being there’ (Gertler, 1995a), in the form of geo-graphical proximity to related firms and industries, is likely to be strengthened becauseof the need to access tacit knowledges within everyday production processes. Thisproposition rests upon an important distinction between tacit and codified forms of knowledge (Campagni, 1991; Capello, 1999; Cooke and Morgan, 1998; Keeble et al.,1999; Malmberg and Maskell, 1997; Maskell et al., 1998; Morgan, 1997; Storper, 1997).While codified knowledge can be easily traded or communicated through markets and

hierarchies, and can in principle become ubiquitously available, tacit knowledge ismuch ‘stickier’, being embedded in production practices and the ‘know-how’ of particular firms and workers. The key claim made by advocates of the ‘learning region’is that the increased emphasis on tacit knowledge makes spatial proximity betweenassociated producers more important since this form of non-codified knowledge is besttransmitted and developed through close interpersonal and interfirm relations (Cookeand Morgan, 1998; Morgan, 1997; Storper, 1997).

A fourth point is the emphasis that is placed upon the importance of collectivelearning processes in stimulating agglomeration. The concept of collective learningneeds to be differentiated from simple learning that involves bilateral cooperation(Capello, 1999), referring instead to cumulative learning processes that take place overtime among a community of firms in a locality. These learning processes require adegree of continuity and stability in interfirm relations which is likely to be facilitated










by spatial proximity (Maskell et al., 1998). As collective learning processes develop,information about knowledge creation becomes a ‘public good’ (Capello, 1999) in thesense that innovations become available to the universe of firms within a network andnot just to those who generate the original ideas. Localized forms of collective learningcan only be sustained over time if firms continue to participate in this open exchange of knowledge and ideas. There are strong incentives encouraging such participation, par-ticularly for smaller firms which generally lack the knowledge and scale economies of larger firms. In particular, it is argued that innovation can be seen as a process of collective learning where complementary forms of knowledge are combined. Lawsonand Lorenz (1999) contend that innovation often involves specialists bringing togetherdifferent tacit knowledges to create new forms of knowledge greater than the sum of the constituent parts. Drawing upon the work of the Japanese organization theoristsNonaka and Takeuchi (1995), they emphasize the importance of ‘the key epistemologi-cal moment [when] actors seek to make explicit ideas and notions about new products

and techniques that, until then, had amounted to hunches or rough intuitions. It isimportant to focus upon the collective nature of the process. The open exchange of ideas. . . serves to stimulate thought and . . . generates a level of creative thinking that solitaryreflection rarely achieves’ (Lawson and Lorenz, 1999: 312).

The establishment of trust between actors is considered to be critical to collectivelearning activities (Lorenz, 1996). Such relations of trust extend beyond the dynamics of individual optimization which form the basis of neoclassical conceptions of economicexchange (Maskell et al., 1998: 44–49).7 Firms within high-trust business networks

benefit from the reciprocal exchange of information and knowledge, but at the sametime are bound by ‘strong ties’ of obligation which regulate behaviour and prevent

‘malfeasance’ (Granovetter, 1985). In this way, then, trust is conceptualized as a keyform of ‘glue’ which binds networks together and sustains firms’ involvement inprocesses of collective learning. An important implicit claim in the learning regionliterature is once again that geographical proximity between associated firms andproducers is more likely to generate such high levels of trust than more dispersedrelations. Yet, while this emphasis on trust reflects the growing importance of interfirmnetworks as sources of learning and competitive advantage, it fails to adequatelyconsider the difficulties of participation in such collaborative networks within acapitalist economic system based upon private control of the means of production(Jessop, 2000). In view of this fundamental structural constraint, the literature on

learning regions would seem to underplay the problems of building and sustainingtrust in the face of competitive pressures which might lead firms to seek to appropriatenetwork assets for their own private benefit.

Finally, at the level of policy, it is argued that the learning region concept can beapplied to less favoured regions as well as more advanced ones (Florida, 1995b;Morgan, 1997). Incremental notions of innovation suggest that branch plant and low-technology regions will also be repositories of forms of practical know-how that havethe potential to provide localized competitive advantage (Morgan, 1997; Maskell et al.,1998). The emphasis on knowledge implies that economic under-development is not

just about dependency relations within national and international divisions of labour(Massey, 1984) but also reflects poor learning characteristics that are internal to regionsthemselves. To an extent, traditional regional development arguments have beenturned on their head, so that the debate is less about the longer-term impact of transna-









tional corporations than on the capacities of regions themselves to ‘learn’ from thesecorporations (Florida, 1995b; Morgan, 1997). Developing this theme, it is argued thatthe task for less favoured regions is to develop better learning capabilities, predicatedupon their collective ability to develop more reflexive ‘rationalities of action’ (Amin,1999).

2 Learning regions in question

Critics of the learning region concept have questioned the novelty of links betweeninnovation, learning and economic performance (Hudson, 1999a). As early as the 1960s,as part of a critique of neoclassical location theory, Pred (1966) observed that variationsin the ability to handle and process information and create knowledge might accountfor differential economic performance and rates of regional growth. Making a similarpoint more recently, Hudson (1999a: 68) draws attention to the failure of the UK’s oldindustrial regions to modernize during the twentieth century, referring to the problemsof ‘institutional lock-in’, in terms of an ‘inability to make the change from onedevelopment trajectory to another precisely because the institutional bases of the regionreflected the past dominance of now declining firms and sectors’. Nonetheless, thelearning region literature has helped to advance our understanding of the specific waysin which learning can make a difference, particularly in terms of the crucial distinction

between tacit and codified forms of knowledge. Despite this theoretical contribution,however, ‘new regionalist’ writers, with the notable exception of Saxenian, havegenerally not been able to provide convincing explanations of why some knowledge-

based regions adapt and develop new growth trajectories at critical junctures, whileothers stagnate as the problems of ‘lock-in’ become apparent.The learning region literature also seems to display considerable elasticity in respect

of the spatial scales at which ‘localized’ learning is said to occur. While not wanting toessentialize particular spatial scales (Allen et al., 1998), there is nevertheless a danger of considerable conceptual slippage here in comparing the institutional capacities andaction frameworks of subnational regions with those of national states. In effect whatstarted out as compelling evidence of the continued relevance of national operatingenvironments (Lundvall, 1992) has somehow been turned into a celebration of regionalpotential (Morgan, 1997). For example, Maskell et al. (1998: 11) suggest, rather

cavalierly, that ‘countries have in important respects become more like regions, andregions more like countries’. While national states have certainly become less self-contained as a result of growing international economic integration, it is important torecognize that they retain key powers both over their own territories and in theirrelations with the wider world economy that far surpass even the most devolved of regions (Amin and Tomaney, 1995; Gertler, 1997; Cumbers, 2000). This clearly has impli-cations for learning processes given national states’ continuing role in regulating arange of important policy areas shaping the development of new knowledge-basedsectors such as e-commerce and biotechnology (Jessop, 2000).

As the more thoughtful contributions to the literature concede, external connectionsto the global economy also play an important role in sustaining competitive advantage(Storper, 1997). For branch plant regions in particular, inward investment can provide a

basis for building competitive advantage through the access it offers to wider corporate









knowledges and networks (Florida, 1995b; Morgan, 1997). At the same time, successfulindustrial districts have to guard against the dangers of ‘lock-in’ when the effects of changing economic conditions can result in embedded regional networks being‘insidiously turned from ties that bind into ties that blind’ (Grabher, 1993: 24). Yet theacceptance of the importance of external linkages throws up a whole set of questionsabout the geographies of collective learning that are not really resolved by existing con-tributions. For instance, stress is placed upon the need to protect specialized localizedforms of knowledge, avoiding ‘ubiquitification’ (Maskell et al., 1998: 19–28) bysustaining a close-knit local community of shared trust that operates in the context of alocally bound set of habits and conventions. At the same time, however, these close-knitnetworks must presumably be open enough to engage with external and dispersedknowledge communities on a regular basis to avoid ‘lock-in’. The two imperativeswould seem to be, if not incompatible, then certainly a difficult balancing act. If collective learning at the local level involves reciprocal exchange and trust relations,

then surely the same applies to external learning relationships. Yet the regular andpresumably reciprocal exchange of information through external collective learningmay render a region’s relational assets vulnerable to ubiquitification. In reality, asHudson (1999a), among others, has pointed out, collective learning can be organizedacross a series of geographical scales and along a range of different dimensions. And theeffects of proximity in nurturing collective learning can be generated through organi-zational and relational networks as well as locally bounded ones (Amin and Cohendet,1999). This implies that the learning region school’s key argument regarding therenewed importance of localized learning – relative to these other sources of learning –as a source of competitive advantage remains unsubstantiated.

Of the empirical evidence that is marshalled to support the theoretical claims of thelearning region proponents, two approaches can be identified. The first takes the regionas the object of analysis, and empirical material is derived from interviews with keyinformants and readings of policy documents (Cooke, 1995; Cooke and Morgan, 1998;Morgan, 1997). These accounts consequently rely upon self-reporting by ‘boosterist’agents (Lovering, 1999) who have a vested interest in verifying the theoretical proposi-tions being advanced. In view of our earlier observation regarding the tendency toassume that regions exist as internally coherent objects of study (MacLeod, 2001), thereis a danger that ‘new regionalist’ approaches might ultimately support and legitimizeélite groups’ efforts to construct and promote ‘regional’ agendas which mask the

unequal power relations between particular interests. Such processes are, for instance,evident in the ways in which peripheral UK regions like Scotland and northeastEngland have been discursively constructed as ‘problem’ regions requiring stateassistance over the course of the twentieth century (Hudson, 1989; MacLeod, 1998).From this perspective, the politics of regional development becomes an important focusfor research (Lovering, 1999; MacKinnon and Phelps, 2001).

A second set of studies has been undertaken in which claims are made about theimportance of clustering and localized learning largely upon the basis of secondarydata sources, either in the form of official censuses or other large-scale surveys (Asheimand Isaksen, 1997; Maskell et al., 1998; Rosenfeld, 1997). Taking the work of Maskell etal. (1998) as an example, their aim is to explore how high-cost countries such as theScandinavian states are able to compete in relatively low-tech industries. A major partof their explanation is related to the creation and utilization of specialized tacit









knowledges through alliances and partnerships between firms at the local (in this casenational) level. Their argument is founded upon the observation that patterns of regional specialization remain remarkably durable over time, despite processes of inter-nationalization. This leads to the proposition that increased agglomeration, and thesuccessful ability of Scandinavian countries to remain competitive in certain specializedareas, can be explained in large part by the existence of localized networks of collectivelearning, founded upon relations of shared trust.

While the arguments of Maskell et al. are highly plausible at a theoretical level,their claims concerning the relationships between agglomeration, learning and trustare not adequately substantiated through empirical research. The second half of theirstudy is based on three industry case studies offering accounts of the evolution of industries in different Scandinavian countries with distinct ‘environment-regulatory’conditions. While these case studies point to particular relationships between localizedcapabilities and competitive advantage, there is no attempt to provide a more

systematic examination of key theoretical propositions. To be fair, the authors doconcede this point, noting in conclusion that ‘the weak point, in our analyses as well asgenerally in contemporary research in economic geography and neighbouringdisciplines, is empirical validation’ (Maskell et al., 1998: 193).8 Indeed, the only chapterthat really addresses the issues at the heart of the study is the one on furniture manu-facturing based on Maskell’s own work (Maskell, 1998). While this draws on secondarydata on production, employment and location, there is no detailed investigation of thelinks between localized capabilities and learning. This reliance on official statistics canprove problematic, since these are collected and compiled by government agencies fordistinct purposes related to planning and policy evaluation. As a consequence, research

relying on official data often lacks the necessary specification and focus to assess therelational assets that are thought to underpin localized learning processes (Storper,1997). In this context, there is a need to employ a range of research methods – includingcorporate interviews, surveys and ethnographic approaches – that involve directcontact with the individuals, firms and organizations engaged in processes of learningand innovation within various regional and industry contexts. This can be seen as anecessary, if insufficient, condition for research to proceed beyond ‘vague theory andthin empirics’ (Martin and Sunley, 2001: 153) towards a firmer understanding of the keyprocesses that underpin economic development at local and regional levels (Sunley,2000).

In summary, while the learning region literature advances some interesting proposi-tions about the changing relationships between regions, knowledge creation andcompetitive advantage, the precise nature of these relationships is not clear from thelimited empirical research that has been undertaken. Despite this, the argument thatlearning and knowledge creation are imperatives for all firms and regions (Lundvalland Johnson, 1994) is widely accepted, and strong claims are made about the relevanceof learning concepts for less favoured regions (Morgan, 1997). With this in mind, it isworth speculating that the links between agglomeration, collective learning andeconomic performance are best demonstrated through some form of comparativeanalysis across different regional and industry settings. Additionally, a longitudinalapproach would also offer advantages, given that some of the questions raised can only

be answered through an investigation of cyclical dynamics through time. Whatever theprecise combination of research methods employed, however, the importance of









localized collective learning in certain celebrated cases is perhaps best demonstrated bydocumenting its absence in others.

V Conclusions

In this paper, we have sought to critically evaluate recent debates on innovation,learning and regional development, identifying key arguments and propositions andassessing how these have been pursued through empirical research. In response torecent critiques (Lovering, 1999; Markusen, 1999), we contend that the focus on learningand innovation has drawn attention to a number of important aspects of contemporaryregional development processes. These relate to the identification of the mechanismsthrough which knowledge and information are generated and circulated within regions(Henry and Pinch, 2000; Keeble et al., 1999; Saxenian, 1994); the notion of innovation as

an interactive process which helps to open up questions about the learning capacity of less favoured regions (Amin, 1999; Cooke and Morgan, 1998; Morgan, 1997); and theevolutionary emphasis on divergent pathways of economic development (Cooke andMorgan, 1998; Storper, 1997). At the same time, however, we have identified a numberof inadequacies in terms of how the relationships between learning and innovation, onthe one hand, and regional development, on the other, are conceptualized (Pratt, 1997).First, many writers seem to take regions for granted as objects of analysis by failing toconsider how they have been historically institutionalized as spaces of political-economic intervention and action (Allen et al., 1998; MacLeod, 1998; MacLeod and

Jones, 1999; Paasi, 1991). Second, while the focus on the endogenous capacities of

regions has identified certain preconditions for development, it has also encouraged aneglect of external networks and institutions, such as those associated with TNCs andnation states. Third, the tendency to provide snapshots of successful regions means thatmuch recent research in economic geography fails to address questions of adaptationand renewal in terms of how regions can sustain growth in the face of rapid changes intechnologies and markets which may threaten the basis of such growth.

Our final task in this paper is to identify some directions for further research. One setof questions concerns the changing politics of regional development as the prevailingemphasis on knowledge and innovation as key sources of competitive advantage isused to mobilize and support certain agendas and interests (Lagendijk and Cornford,

2000). In methodological terms, considering the position of different regionally basedgroups in relation to these emerging agendas would provide some necessary ‘triangu-lation’ by accessing a range of perspectives. This could also help to challenge the ‘newregionalist’ tendency to take regions for granted by reinforcing the notion that regionsare materially and discursively constructed from conflicting and overlapping socialrelations and networks (Allen et al., 1998). Second, in order to identify more preciselythe ways in which proximity fosters competitive advantage, research needs to addressthe role of extra-regional networks as mechanisms of knowledge generation andcirculation in addition to processes within regions. This would require comparativestudy of the role of organizational and technological networks in connecting emergentprocesses of knowledge creation across a range of geographical scales (Amin andCohendet, 1999).

Third, the literature on learning regions raises questions of regional adjustment and









renewal in terms of the localized capabilities and assets that underpin particular formsof specialization (Maskell et al., 1998; Storper, 1997). In what circumstances can thesecapabilities serve as a basis for successful adjustment rather than acting as an obstacleto the creation of new rounds of regional growth? This would focus attention on key‘branching points’ where regional agencies and firms confront problems of ‘lock-in’. Inthis context, there is a need to identify the conditions which enable some regions toadapt successfully while others fail. One possible line of enquiry might centre onstrategies for resolving the tension between the need to sustain key assets and infra-structures within the region and the pressure to engage with extra-regional networkswhich potentially offer a source of external inputs for regeneration (Camagni, 1991). Asthis review has suggested, these are issues which are best addressed throughcomparative studies of specific industries and regions. While contemporary theories of learning and innovation have generated an interesting series of propositions about thechanging nature of regional development, further progress requires a new phase of

empirically grounded research as a means of both improving our understanding of the conditions which shape regional economic development and assessing the value of influential constructs such as ‘learning regions’, ‘innovative milieux’ and ‘knowledge-

based economies’.

Acknowledgements

The authors are grateful to the ESRC for funding the research from which this paper isderived under grant number R000223025. Thanks also go to Peter Dicken and two

anonymous referees for comments on an earlier draft of this paper.

Notes

1. This notion of policy irrelevance, or policy distance in Markusen’s terms, is clearly at odds withLovering’s claim of ‘theory led by policy’ which implies that the problem is one of policy closeness(Lovering, 1999). As such, these must be viewed as separate critiques, with Lovering suggesting that‘new regionalist’ approaches tend to legitimize certain forms of policy intervention, whereasMarkusen and Martin are more concerned with the need to uphold standards of evidence that enableeconomic geographers to contribute to policy debates. While our review is informed by these

arguments, we do not pursue the broader issues of method and policy engagement in the presentpaper (MacKinnon et al., 2000).

2. Although this is partly informed by the work of the flexible specialization school in the 1980s.3. While ‘lock-in’ suggests an impending economic cul-de-sac in which development is

constrained within a progressively narrower range of possibilities, this is too narrow an interpretation,since evolutionary metaphors do not exclude the influence of human agency in identifying andselecting new directions at critical points along an established path.

4. The interest in ‘clusters’ stems, of course, from the work of Michael Porter, the Americaneconomist and management consultant who argued that nations and regions could maximize theircompetitive advantage by developing specialized complexes of interrelated industries (Porter, 1990).

5. Transcoding is the most important of these, since it enables firms to translate external

information into a language that they understand (Camagni, 1991: 127).6. In this context, it is worth noting that Marxist accounts of capital accumulation also recognize

the importance of technical change (Braverman, 1974; Webber et al., 1992). In contrast to the relativeopen-endedness of heterodox conceptions, however, conventional Marxist approaches tend to assume









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