Geography of Innovation

The geography of innovation refers to the spatial clustering of innovative activity and the advantages conferred by co-location. Economic actors realize gains when located to places with abundant resources, well-developed social networks and the chance for serendipitous encounters: all factors that increase the probability of recognizing opportunity and easily solving problems. Location can lower search costs through localized knowledge spillovers and provide access to external scale and scope economies. Firms are one mechanism for organizing economic activity and social networks are another; geography provides an alternative platform that easily brings together resources external to firm and augments social networks through face-to-face interaction.