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:t _80 Part I Regional economics _

Regional growth disparities: neoclassical perspectives 81

benef~t from th~ existing stock of technological knowledge by utilizing it more rabie 3.4 The regional dístríbution of ínnovatíons in the USA, 1940-94
effectively. During the catch-up phase, their growth will consequently be faster
~han t~ose economies which are already utilizing existing technical knowledge % of newly patented inventions
Decade
íntensively. Growth rates are therefore likely to be faster in economies which are Midwest USA
Sunbelt Northeast
catching up in their use of existing knowledge.
Second, the i~centives lo inv:st and ta use existing tecbnjca1 knawledge will
:1 vary b~tween dlfferent econOIIues Ibis may barren far example, because some
countnes bave more favourable ecanoroic and social infrastructJ1re tban others. or
1940-9
1950-9
1960-9
18.8
21.6
27.5
32.8
4B..5
462
4L6
1M
32.7
31.7
30.9
28.6
100
100
100
100
beca use the legal and ~litical institutions are more faVOllrable to lbe accumula- 1970-9
25.9 100
36.3
tion of. capit~l. Countries in which there is social unrest, for example, willi;Iess 1980-9 37.8
33.4 23.9 100
1990-4 112
attr~ctIve to mvestors than countries in which there is a stable social and political
envíronment, Source: Suarez-Villa (1999)
. Eropirical l?\TOrk.on the spatial diffJ1sioo oí techoology suggests tbal such diffu-
Slon .between reglons is far {roro being instantaoeoJ]S as predicted by tbe neo-
known about the spatial diffusion of technical progress, fue possjbiHty tba t rp-
dass1Cal model (see chapter 10). Sorne regions appear to be innovation leaders.
gional gxÜlNtb patteros are determined at least in part by regional differences in
!hey ~re th~ sources of the basic inventions and take the lead in applying these
technjca 1 progress cannot be ulled out.
In:e~tIons In the forro of new products or more efficient ways of producing
If the diffusion of technology between regions is an important determinant of
~XIstin? ~ro~ucts. An example of the high geographical concentration of innovat-
productivity growth, we should expect those regions with 'low' technology to
ive actI~Ity.IS provided by Guerrero and Seré (1997) for Spain. Using the number
gain productivity improvements by exploiting the technology gap between them-
of ap~hcations for a patent as a measure of innovative activity, they show that
selves and the 'high'-technology regions. This suggests a positive reJatioDsbjp
~adrI~ ~nd Barcelona together accounted for over SO per cent of Spain's innovat-
between productivity growth and the technology gap: the bigger the technology
rve activity during 1989-92 while their share of national GDP was only 31 per
gap, the faster the productivity growth. l\jcCombje (1-982) has attempted to test
~ent. The only other very high concentration among Spain's 50 provinces was
this hypothesis using cross-section elata for tbe T15 .states. After allowing for other
In Val~ncia ~ith ~ ~er .ce~t of the country's innovations. A statistical analysis
possible influences on the growth of labour productivity, he found no eszidence
of regIona~ dISp~rIti~s In innovation in Spain reveals that government policy
that each state's technology gap had any effect on its productivity growth. He
to:vards stImulating innovation has been highly biased in favour of the regions
concludes that the diffusion of innovations has not been influential in determin-
with the greatest innovation potential.
ing inter-state differences in productivity growth in the United States. This result
lt Sb?JJ]d als~ recognized that the geograpby oi innovatjon can change
must, however, be regarded as onIy tentative since it is based upon highly aggreg-
dr~matIcally over time, as has occurred in the USA (Suarez-Villa 1993; 1999).
ated data. More detailed empirical research is needed at the micro-level if the
USIng th~ number of registered patents as an indicator of innovative activity,
process of technological diffusion is to be more clearly understood.
~uarez-VIlla shows that the Sunbelt states, particularly California and Texas,
increased their share of total innovations in the USA from under 20 per cent in the
1940s to 50 per cent in 1995 (see table 3.4). The reasons for the increasing irriport-
3.6 The convergence of regional
ance of the Sunbelt states as innovation leaders are varied and contain a mixture
of market force s and government intervention. The new high-tech industries have per capita incomes in practice
clearly ~ad. a preference for the Sunbelt states and this has been backed up by
substantial mward migration from the mid-western and north-eastern states. But Que oí tbe key predictions of tbe neoclassica 1 grow tb model is that spatia l dis-
federa~ and state govemments have also had sorne influence on the rapid growth parities in per capita incomes sbo]]ld cop"~rg€ o"er fue long runo This will occur
of the Innov~tion capacity in the Sunbelt states through government expenditure because capital will flow from high-wage to low-wage regions and labour will
on defence, infrastructure, higher education and research institutions. flow in the opposite direction until returns to capital and labour are equalized. In
AI~hough technical knowledge diffuses outwards troro source regions, the pro- addition, poor regions can benefit frorn technology catch-up. To what extent has
c~s 1S comp1ex and is far trom perfecto Informatioo 00 oew productjon procesgs, this catching-up process occurred? Sorne indication is provided by studies of the
f?r exampl~, appears to spread more rapidly 10 alher regions tban does informa- convergence of income per capita between regions.
t~on 00 entirely oew products, which are often jealously guarded by innovating
T1 is importan! to distinguish between two differen! types of convergence Tbere
firms. lnformatioD also teods to diffuse along well-defineJi rOl1tes, from cities to iS-beta-convergence (or B-convergence) and sigma-coovergence (or a-convergence).
small towns and frorn main plants to branch plants within firms. Until more is These two types of convergence are defined as follows: