Small Worlds and Regional Innovation

Abstract

Small world networks have attracted much theoretical attention and are widely thought to enhance creativity. Yet empirical studies of their evolution and evidence of their benefits remain scarce. Using patent co-authorship data, we explore regional small-world structures and investigate the emergence and disappearance of giant components in patent collaboration networks. We test the idea that small world structure (cohesive clusters connected by occasional non-local ties) and shorter path lengths improve innovative productivity within geographic regions. We find at best qualified evidence to support the popular consensus that small worlds enhance innovation. We then discuss the implications of our findings for small world research and regional innovation policies.

Keywords: small-world networks, innovation, regional advantage

JEL Classification: 03, D8, J1, R00