Where Does Knowledge Grow? – Locations within Knowledge Production

The global economy has entered a new stage of development – innovation, knowledge and creativity are now the key criteria for successful economic growth.8 Countries must therefore devise strategies that enable them to move their economies toward a path of knowledge- and innovation-driven development. Those who are unable to make this transition will be left behind in international competition and pushed to the periphery of development, synonymous with a permanently low standard of living. The key protagonists of knowledge- and innovation-driven development are flexible, open and creative small enterprises in the vanguard of product development. Meaningfully improving the business environment of these enterprises has therefore become a priority for governments.

The level of creativity of communities, regions and countries is closely correlated with their economic development. The countries that understand the changes unfolding in the environment and view these changes as opportunities, invest in knowledge and innovation. The countries that are unable to generate knowledge will have no other choice but to buy it. And knowledge is becoming an increasingly expensive asset. Consensus has emerged in the literature regarding the fact that the ideal setting for innovation is a large urban space fostering numerous interactions where a diverse, creative workforce is concentrated, and where creativity can thrive, fostered by different types of activities and businesses with different but complementary and mutually stimulating and inspiring profiles. However, the spread of the knowledge economy have come hand-in-hand with ambiguity in terms of the role of geography.

Figure 2 The Innovation Zones of the 21st Century

Source: Visually

In his book, Triumph of the City, Edward L. Glaeser emphasizes the importance of personal encounters as opposed to just the rise (and often the overvaluation) of the Internet and information technology (IT), citing numerous studies that confirm the fragility of groups that form and communicate solely electronically, as opposed to groups that are strengthened by personal meetings. The role of communication with the help of IT tools is the deepening and improvement of the efficiency of personal meetings rather than being their substitute. Personal relationships are the foundation of deeper trust, greater respect and more efficient cooperation. Geographic proximity is also a major factor in terms of patents, as it has been demonstrated that the number of patents that refer to and cite each other is twice as high within a metropolitan region. In this age of information technology and information society, contrary to earlier predictions, geographic space has not lost its significance and the circumstances allowing new ideas and knowledge to be born are still defined by geography (specifically, the geographic configuration of the agents of development), and geographic space continues to have a major impact on innovation and productivity (Figure 2).9

Only a portion of our knowledge, referred to as digitizable knowledge can flow globally with the help of information technology. However, there is a deeper dimension of knowledge that can only be conveyed – and even created and regenerated – through personal, face-to-face interactions and relationships. This type of knowledge, commonly known as tacit knowledge, a term coined by Mihály Polányi, holds the true secrets of innovation, production technology and successful economic functioning. In an age where the economy is defined by knowledge, knowledge production and innovation arise mainly in metropolises serving as a backdrop for more concentrated human interaction, and specifically their varied urban centers that host numerous activities and diversity. This holds true even if urban concentration and agglomeration also yield negative impacts such as the accumulation of environmental and social tensions or the dramatic rise in production and wage costs.

The appreciation in the value of geography is also apparent in the changes in the European Union’s cohesion policy. Local developments were prioritized for the 2014–2020 programing period as a result of the Barca Report published in 2009. In the Treaty of Lisbon, the European Union’s unified fundamental document since 2012, territorial cohesion was identified as a new objective geared toward a deeper understanding and the shaping of spatial organization, alongside the former priorities of economic and social cohesion. These policies implement geographically harmonized developments that are based on a territorial strategy tailored to every region. The principle of flexible geography introduced by the new programs also attests to the rise of location-based mentality. Space and location have thus become more important in cohesion policy, although they do not necessarily coincide with the territorial units defined by the administrative borders of countries and regions.