Regional Innovation, Industrial Policy and UK Interregional Challenges

Abstract

This paper examines the challenges associated with fostering regional innovation via place-based innovation policies in a context where a country previously had little or no real place-based thinking or policy-framing. The UK displays a combination of both high interregional inequalities and a highly centralisation and top-down governance system. For many years national policy was based on the assumption that knowledge spillover effects from the London economy would naturally diffuse through-out the country, whereas recently there has emerged a realisation that this has not happened. Instead, devolution-related governance reforms are required to foster regional development, but the over-centralisation of the system itself militates against this. Here we discuss the economic development and governance-reform challenges associated with a shift towards more devolved policy making in a setting of good institutions which are ill-designed for the challenge.