Innovation, Agglomeration, and Regional Development

Posted: 29 Feb 2008

See all articles by Ian R. Gordon

Ian R. Gordon

London School of Economics

Philip McCann

University of Reading - Department of Economics

Date Written: October 2005


This paper provides a critical examination of the widely disseminated view that innovation in all or most activities is favoured by certain common characteristics in the local `milieu`, involving a cluster of many small firms benefiting from flexible inter-firm alliances, supported by mutual information exchanges of both an informal and formal nature. The general applicability of this model, and the localness of crucial linkages, is questioned initially on the basis of a review of different hypotheses about the geography of innovation. Moreover, examination of new survey evidence from a large number of firms in the London conurbation suggests that the importance of specifically local informal information spillovers for successful innovation is very much more limited than has been suggested, as are the supposed advantages of firm smallness.

Keywords: JEL classifications: O310, R300

Suggested Citation

Gordon, Ian R. and McCann, Philip, Innovation, Agglomeration, and Regional Development (October 2005). Journal of Economic Geography, Vol. 5, Issue 5, pp. 523-543, 2005, Available at SSRN:

Ian R. Gordon (Contact Author)

London School of Economics ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

Philip McCann

University of Reading - Department of Economics ( email )

Reading, RG6 6AA
United Kingdom
+44 (0)118 9314074 (Phone)


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