Riccardo Crescenzi and Andrés Rodríguez-Pose
An 'integrated' framework for the
comparative analysis of the territorial
innovation dynamics of developed and
emerging countries
Article (Accepted version)
(Refereed)
Original citation:
Crescenzi, Riccardo and Rodríguez-Pose, Andrés (2012) An 'integrated' framework for the
comparative analysis of the territorial innovation dynamics of developed and emerging countries.
Journal of Economic Surveys, 26 (3). pp. 517-533. ISSN 0950-0804
DOI: 10.1111/j.1467-6419.2012.00726.x
© 2012 Blackwell Publishing Ltd
This version available at: http://eprints.lse.ac.uk/44471/
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An ‘integrated’ framework for the comparative analysis
of the territorial innovation dynamics of developed and
emerging countries
Riccardo Crescenzi
a
and Andrés Rodríguez-Pose
a,b
a
London School of Economics, London, UK
b
IMDEA Social Sciences Institute, Madrid, Spain
[FINAL ACCEPTED VERSION]
Please cite as:
Crescenzi R. & Rodríguez-Pose A. “An ‘integrated’ framework for the comparative analysis
of the territorial innovation dynamics of developed and emerging countries”, Journal of
Economic Surveys, 26(3), 517–533, 2012 - DOI: 10.1111/j.1467-6419.2012.00726.x
Abstract
This paper discusses recent developments in the literature on local and regional innovative
performance in order to show how an ‘integrated’ conceptual framework based on the cross-
fertilisation of different theories can serve as a foundation for the comparative analysis of
territorial innovation dynamics in both developed and developing countries. The paper outlines a
conceptual framework to explain the differences between innovation systems and their geography
by drawing on elements of endogenous growth, new economic geography and regional innovation
systems. This framework forms the basis of the subsequent analysis of the differences in innovative
capacity between the European Union, the Unites States – as the leader system to be challenged –
and China and India as emerging competitors for international technological leadership. The
systematic analysis of a large body of empirical literature shows important differences between the
spatial patterning of ‘emerging’ (China and India) and ‘mature’ (EU and US) innovation systems.
Key words: Innovation systems, geography, endogenous growth, new economic geography, Europe,
United States, China, India
Acknowledgements: Financial support by the ESPON 2013 - KIT (European Observation Network
of Territorial Development and Cohesion - Knowledge, Innovation, Territory) Project and by the
European Research Council under the European Union’s Seventh Framework Programme
(FP7/2007- 2013)/ERC grant agreement nº 269868is gratefully acknowledged. The research has
also benefited from the support of a Leverhulme Trust Major Research Fellowship and is also part
of the UK Spatial Economics Research Centre. The authors are solely responsible for any opinions,
views or errors contained in the article.
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1. Introduction
The unprecedented pace of the process of technological change and the progressive
‘globalisation’ of innovation systems are making the territorial dynamics of innovation, on the one
hand, more complex to analyse, and, on the other, progressively more interconnected across
continents, countries and regions. This changing scenario poses a number of challenges for scholars,
practitioners and policy makers alike in order to develop progressively more sophisticated
frameworks of understanding able to capture the complexity of the on-going processes. The
ultimate aim is to develop adequate policy tools in order to spread the benefits of existing processes
and mitigate their potential drawbacks in both developed and developing countries.
In this context, the advancement of both theoretical and empirical literature in a number of
fields of the social sciences – not only in economic geography and geographical economics, but also
in international business studies and technology studies – has suggested that the insights on the
innovation process which that can be produced by a single discipline in isolation are more partial
and inconclusive. There is thus an increasing consensus on the need for ‘integrated’
interdisciplinary eclectic approaches to the genesis of innovation for both positive and normative
purposes. In addition, in light of the increasing degree of interconnectedness between regional
economies, such a framework should provide consistent insights on the experiences of developed
and developing countries, in order to enable mutual learning and policy transfer.
This paper aims to contribute to this debate in two different ways. First, it intends to show
how different streams of literature on the genesis of innovation at the territorial level can be
productively cross-fertilised into an ‘integrated’ and eclectic conceptual framework of
understanding. Second, it makes use of this framework to re-interpret a large body of empirical
literature in a comparative perspective and investigate in a systematic fashion the similarities and
dissimilarities in the territorial innovation dynamics of developed and emerging countries.
The review of the literature in a comparative perspective will show how an integrated
framework can contribute to overcome the existing conceptual and empirical barriers that have
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limited the capacity of developed and developing countries to learn from each other’s experiences,
limiting the transfer of successful policy tools. In addition, making use of both quantitative and
qualitative information within a theory-driven conceptual framework allows to rise above the
limitations of both ‘scoreboard’ approaches – which rely exclusively on the comparison basic
quantitative indicators – and of comparative case studies that remain limited in terms of generality
and conceptual foundations. Finally, an integrated comparative analysis facilitates identifying areas
where more research is needed to support policy-making in different contexts.
In order to show how different strands of literature on the genesis of innovation at the
territorial level can be cross-fertilised into a joint ‘meso-level’ conceptual framework, the paper is
divided into three further sections. Section 2 briefly reviews the existing meso-level innovation
literature with the aim of singling out the components of an ‘integrated’ conceptual framework. The
third section discusses the capability of this framework to account for ‘real world’ regional
developmental dynamics in both developed and developing countries more accurately than
alternative approaches. The fourth section concludes with some considerations on the ‘value added’
and implications of this approach.
2. The conceptual foundations of an ‘integrated framework’ for the comparative analysis of
innovative dynamics
The comparative analysis of innovative performance at the territorial level calls for an
appropriate analytical framework. Such a framework should possess a number of important features
that would make it a suitable foundation for comparative analysis and, eventually, for policy
transfer. It should not only be a tool for the detection of the factors of success in leading
regions/countries, but a full-embracing conceptualisation of the determinants of regional innovation
in both core and peripheral areas, developed and developing countries. Let us briefly review some
key contributions to the literature on the territorial determinants of innovation in order to identify
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the potential ‘building blocks” of an ‘integrated’ framework for comparative territorial analysis of
innovation dynamics.
Link between R&D investments and innovation - By adopting the relationship between innovative
efforts and the generation of new ideas/knowledge as its milestone, this conceptual framework
would be a suitable foundation for both quantitative and qualitative comparative analyses of
regional and local innovative dynamics. The relationship between local innovative efforts and
knowledge output is grounded in endogenous growth theory (Romer 1990; Aghion and Howitt
1992; Cheshire and Magrini 2000), the Knowledge Production Function approach (Griliches 1986;
Audretsch and Feldman, 1996a and b; Audretsch 2003) and the ‘technology-gap theory’ of
technological development (Fagerberg 1988). The latter explicitly assumes the interaction of two
‘conflicting’ forces: innovation (which generates the technology gap) and imitation or diffusion
(which tend to reduce it) as the motors of the process long-term technological development. The
capability of countries and regions to catch-up with the technological leaders depends on their
‘technological congruence’ and on their indigenous ‘social infrastructure’. It is the capacity to
single out these two fundamental forces behind the process of technological development and their
explicit link with internal socio-institutional characteristics that makes Fagerberg’s approach
particularly suitable for our comparative framework. It fundamentally represents the attempt of the
‘formal analytical’ economic literature to incorporate the Schumpeterian legacy into progressively
more sophisticated and comprehensive frameworks that embed innovation into a complex set of
other economic processes.
The ‘systems of innovation approach’, on the one hand, and the literature on localised
knowledge spillovers and the spatial dimension of the process of innovation, on the other, have tried
to move beyond the linear relationship between R&D and innovation by conceptualising the role of
more ‘qualitative’/’intangible’ conditioning factors and offering what their proponents deem to be a
more realistic view of the process of technological development in time (institutions supportive of
