Technology Policies and the Growth of Regions: Evidence from Four Countries

Posted: 17 Nov 2009

See all articles by Rolf Sternberg

Rolf Sternberg

University of Cologne - Institute for Economic Policy

Date Written: 1996

Abstract

Since the 1980s, industrialized governments have established policies at the national level to increase economic growth through technology development. This approach is problematic because most high-tech industrial development is regional. There is little consideration of the relationship between technology policy and the growth and development of high-tech regions. This study evaluates the influence of government technology policies on the development of selected high-tech regions in four leading industrialized nations - the United States, the United Kingdom, Germany and Japan. Government policy is shown to affect high-tech regions in various ways. In general, technology policy is directed to technological competencies, which hinders effort to achieve regional balance. Policies can have spatial or aspatial effects. Several theories for regional growth and development are identified: the milieu approach, growth pole theory, product-cycle hypothesis, flexible production and specialization theory, location factor, long-wave theory of development, and industrial district approach. Each approach has strengths and weaknesses, but none take sufficient consideration of government influence on development of high-tech regions. With this background, the analysis uses a combination of case studies and cross-sectional analysis to investigate the specific causes of creation and development of high-tech regions and to evaluate the role of technology policies. Seven case studies were conducted for the U.S., U.K., Germany, and Japan -- countries characterized by above-average growth. Fourteen determinants of high-tech employment were used to find determinants of the high-tech endowment of regions of a country in terms of jobs and businesses. Found that no single determinant is universally important, although government R&D activity does considerably affect regions. The main factors are a nation's technology policy and its R&D infrastructure. There is a positive correlation between high-tech employment and federal R&D expenditures, as well as between city size and high-tech employment. Publicly influenced high-tech regions can be government-led, government-facilitated, or government-dependent. Finally, a regional model was developed that resembled Michael Porter's system of determinants of national competitiveness. Concluded that a specific set of determinants account for high-tech regional development. Importantly, found that the regional impact of R&D policies are often unintended, and may actually contradict the explicit policy goals (for example, aiding backward regions) behind them. Implications for future policy are suggested. (TNM)

Keywords: High technology industries, Startups, Public policies, R&D, Industrial research, Regional development, Regional expansion, Regional policies, Technology policies

Suggested Citation

Sternberg, Rolf, Technology Policies and the Growth of Regions: Evidence from Four Countries (1996). University of Illinois at Urbana-Champaign's Academy for Entrepreneurial Leadership Historical Research Reference in Entrepreneurship, Available at SSRN: https://ssrn.com/abstract=1505896

Rolf Sternberg (Contact Author)

University of Cologne - Institute for Economic Policy ( email )

Pohligstr. 1
Cologne, D-50969
Germany

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