Determinants of Convergence and Disparities in Europe: Innovation, Entrepreneurship, and the Processes of Clustering

Determinants of Convergence and Disparities in Europe: Innovation, Entrepreneurship, and the Processes of Clustering

Andreas P. Cornett (University of Southern Denmark, Denmark) and Nils Karl Sørensen (University of Southern Denmark, Denmark)
DOI: 10.4018/978-1-4666-8348-8.ch003


Innovation and entrepreneurship are key factors in current regional development initiatives, derived from the concepts of new economic growth theory. The aim of this chapter is to combine an assessment of innovative and entrepreneurial performance with the spatial distribution and functional linkages of certain types of economic clusters. The hypothesis is that clustered regions with high entrepreneurial and innovative performance have higher growth than non-innovative/entrepreneurial regions or regions with a more scattered economic structure. The clustering and in some cases even the polarization of economic activities in metropolitan regions can lead to excess growth and contribute to a process of convergence between nations but will also turn regional economic divergence back on the national economic development agenda.
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2. Theoretical And Empirical Framework

The explorative nature of this paper calls for a combined theoretical and empirical foundation of the analysis. Theoretical and conceptual the point of departure is new economic growth theory and spatial aspects of economic growth and competitiveness, i.e. regional innovation systems and processes of clustering and co-location. The second anchor of the paper is the empirical distribution of economic activity and the patterns of economic performance in the European Union.

Key Terms in this Chapter

Entrepreneurship and Intrapreneurship: Start-up of new enterprise activities in a new company or as a part of an existing firm.

Triple Helix: A concept to analyze and reinforce cooperation between the Business and industry, the knowledge sector and the public authorities, often used as an instrument to support the creation of clusters.

Processes of Convergence and Divergence: Describe the development toward a more homogenous economic environment (i.e. measured by GDP/cap) or more heterogeneous environment. Typical measured by either ß or s convergence. The first type is measured by use of regression analysis whereas the second type is measured by the standard deviation divided by the mean. The two types show the same type of performance.

Location Coefficient: A statistical measure used to explore the degree of regional specialization advantage. Originally developed in trade theory.

International vs. Intra-National: Refers to differences within countries and between countries.

Non-Linear Growth Drivers: Refers to qualitative (i.e. human capital) rather than quantitative (i.e. increasing capital stock) growth factor.

Innovations: Are usually process, product, marked or managerial oriented. In practice often distinguished between absolute new innovations or ‘new to the firm’.

Lisbon Strategy and EURO 2020: Programs launched by the EU to improve the EU member countries international competitiveness. A central measures in the later in the new framework program for R&D, Horizon 2020.

Cluster or Industrial Districts: A particular fertile business environment with concentration of particular firms and competences creating positive externalities outside the single firm, i.e common pool labor.

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