Why local development and local innovation are not the same thing: the uneven geographic distribution of innovation-related development

Innovation policy has become a mainstay of local and regional development policy because it is believed that innovative local firms will lead to local employment and income growth. Whilst it is unlikely that a locality and region will develop without local firms being innovative, the reverse does not hold: it is possible, and indeed feasible, that many smaller localities and regions harbour innovative firms without benefiting from the growth that they induce. In the chapter the author explores the reasons why it is believed that local innovation will lead to local growth, and then outlines why this belief is erroneous: innovation in local firms can lead to employment decline (in specialized regions where labour-saving technologies are developed), and local innovators are often being bought-up or compelled to open offices and production facilities in larger and more central places if their localities do not provide the resources necessary for expansion and growth.