The Geography of Intrametropolitan KIBS Innovation: Distinguishing Agglomeration Economies from Innovation Dynamics

Much has been written about innovation, territory, knowledge spill-overs and agglomeration economies, but neighbourhood-level processes of innovation have rarely been studied in a systematic fashion. This article explores whether knowledge-intensive business services (KIBS) are systematically more innovative when they are located in employment clusters. In doing so, it distinguishes between the simple co-location of innovative firms with other activities, and possible dynamic effects (identified by controlling for firm-level innovation factors): most identified geographical patterns are resilient to controls, but the geography of innovation is not straightforward. In Montreal, whilst certain types of innovation occur in employment clusters, others display no spatial patterns. Furthermore, the most intensive KIBS innovators tend to locate away from high-employment and from high-KIBS zones. KIBS innovation does not behave as expected if innovation dynamics were localised in a fashion similar to agglomeration economies: it is therefore important to distinguish between the two.