TECHNOLOGICAL INNOVATION AND THEORIES.DOC

TECHNOLOGICAL INNOVATION AND THEORIES ?OF REGIONAL DEVELOPMENT by ?Matthew A. Zook ?March 17, 1997 Inside Field Statement ?Department of City and Regional Planning ?University of California-Berkeley ? Committee: Prof. AnnaLee Saxenian, ChairProf. Manuel CastellsProf. Michael Teitz Table of Contents Introduction and Overview Traditional Theories of Regional Development Location Theory / AgglomerationDisequilibrium / Cumulative CausationGrowth Poles A Brief Review on Theories of Technological Innovation Insights of Schumpeter and SolowCreation and Diffusion of Innovation Integrating Innovation into Theories of Regional Development Structural TheoriesProduct/profit cycleLong Cycles/WavesPath DependencyRestructuring of Production and Labor SystemsRole of Manufacturing and ServicesDivision of LaborFlexible Specialization, New Industrial Spaces, and InstitutionsRegulation School and Flexible ProductionNew Industrial SpacesInstitutions and Embeddedness Conclusion: Emerging Debates Introduction and Overview Technological innovation and regional development are two closely intertwined processes that shape and support the other.? Although both originate from economics, they have been separated for most of the 20th century.? Classic economic thinkers such as Ricardo recognized the role of technology, albeit he saw diminishing returns to agriculture and capital formation as more important, and? Marx’s theory placed technological innovation as one of the prime movers in capitalist development.? Regrettably early theories of regional development, e.g., location theory, followed Ricardo’s lead and treated technological innovation as secondary in relation to other conditions, such as labor to capital ratios.?? Location theory strove for optimal resource allocation and ceteris paribus assumed unchanging technology that was freely available and instantly adapted by firms and countries. The process of invention becoming innovation and diffusing simply was not refle