Fostering Knowledge Transfers - Philip McCann
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Presentation by Philip McCann (Sir Terry Leahy Chair of Urban and Regional Economics, Alliance Manchester Business School, United Kingdom) at the OECD TPI Orkestra conference "From analysis to action: Harnessing local policies to boost productivity" held in Trento, Italy on 5-6 June 2025. More info: https://oe.cd/5ZD
Fostering Knowledge Transfers - Philip McCann
- 1. Fostering Knowledge Transfers Philip McCann The Productivity Institute University of Manchester 1
- 2. Fostering Knowledge Transfers • Second half of 20th century: Assumption and observations - all advanced economies simultaneously experience national growth and regional convergence (Borts and Stein 1964; Blanchard and Katz 1992; Barro and Sala-i-Martin 1995). • Assumption/assertion that the diffusion and dissemination mechanisms for knowledge and technology are primarily - and efficiently - mediated via markets and competition • Deregulation and competition underpin knowledge diffusion → convergence • For macroeconomists and monetary economists, growth and convergence are in essence the same process • No single mention of divergence 2
- 3. Fostering Knowledge Transfers • 1990s: (new) economic geography, (new) urban economics, management, social network • Assumptions - clustering, agglomeration and knowledge spillovers – growth and localised divergence • Overall diverse and scattered localised divergence but still interregional convergence • Today this assumption/assertion/description represents only 4% of the OECD population • In the UK this description ended by 1988, even tough HM Treasury were still using this framing in 2001 and 2004! UK “Hub, no spokes” economy – Haldane (2018) • In the USA this lasted until 2007/08 – since then divergence • In the EU, it had disappeared by 2012 3
- 4. Fostering Knowledge Transfers Different Types of Regional Growth Trajectories Interregional Growth Features Growth Role of Large Cities Spatial Concentration Convergence Metro Dominated Spatially Concentrated Convergence Non-Metro Dominated Spatially Concentrated Divergence Metro Dominated Spatially Deconcentrated Divergence Non-Metro Dominated Spatially Deconcentrated Source: McCann 2022; Garcilazo and Oliveira-Martins, 2015, 2020; Garcilazo et al. 2021 4
- 5. Fostering Knowledge Transfers • Knowledge spillovers - benefits of unanticipated/unintended knowledge inflows in agglomerations/clusters • BUT – cluster/agglomeration problems of unintended knowledge outflows (Teece) • The knowledge outflow problem becomes more severe the greater the proprietary knowledge • Iammarino and McCann (2006, 2013) show that there are different knowledge spillover/knowledge flow/knowledge transfer mechanisms • Role of markets, hard and soft institutions, networks, social capital, trust, institutions 5
- 6. 6 Evolution Trajectories of Spatial Configurations: Some Examples Destination Origin Pure agglomeration Industrial complex Competence-based SN Trust-led SN Pure agglomeration Global cities US and UK automobile industry - Broadway Theatre - West End Theatre - Montreal video- game industry - Bangalore software industry UNCOMMON 18th century Scottish banking Industrial complex - Boston Route 128 electronics industry - Seattle aircraft industry - Los Angeles defence industry - Global semiconductor (wafer and assembly) industry - Scottish electronics industry UNCOMMON Nokia’s networks in Finland UNCOMMON West London media industry Competence- based SN Silicon Valley semiconductor industry (stage II) - Toulouse Airbus industry - Sophia-Antipolis life- science industry - Formula 1 London Hinterland - Emilia Romagna robotics and mechatronics industry - Italian and Spanish ceramics industry - Sophia-Antipolis IT industry Trust-led SN Birmingham and Connecticut gun-making industry Some made in Italy industrial districts in leather industries (Veneto and Tuscany) - Silicon Valley semiconductor industry (stage I) - Cambridge (UK) electronics industry - Emilia Romagna life-science industry Some small made in Italy industrial districts in clothing industries (Marche and Abruzzo)
- 7. Fostering Knowledge Transfers • Draghi (2024) report (393 pages); Letta (2004) report (146 pages) • Draghi (2024) The Future of European Competitiveness, Part A - A Competitiveness Strategy for Europe and Part B - In- Depth Analysis and Recommendations. • Letta, E., 2024, Much More than a Market: Speed, Security, Solidarity: Empowering the Single Market to Deliver a Sustainable Future and Prosperity for all EU Citizens, Independent Report, April • Trade, energy and defence; EU need to rediscover new ‘growth engines’ via common capital markets, M&As, common procurement, EU-wide/EC coordination 7
- 8. Fostering Knowledge Transfers • In Part A of Draghi’s report, the word ‘region’ appears 21 times, of which half of these references refer to world regions such as EU, North America, China and East Asia, rather than EU regions, and where the word ‘region’ does refer to EU regions, it is only in the context of administrative structures. • Where the word ‘region’ appears in the longer 328-page Part B report, in 45% of cases it refers to world regions and in another 25% of cases it refers to EU administrative structures. • The word ‘convergence’ in the sense of regional rather than regulatory convergence appears only 3 times in Draghi, and the word ‘divergence’ does not appear. • Letta (2024) report there are 2 mentions of regional convergence and 1 of regional divergence 8
- 9. Fostering Knowledge Transfers • Across both of Draghi’s reports the words ‘city’ or ‘cities’ are only used 13 times and in each case refer to ‘superstar’ or highly productive cities, while the word ‘rural’ appears only 4 times in the longer report and not at all in the shorter report. • References to or mentions of regional divergence, lagging regions, discontent, left-behind, never appear in Draghi • In the Letta (2024) report, cities are mentioned 10 times, but always in a non-specific manner • Neither the Draghi nor Letta reports begin to discuss how to foster knowledge transfer, diffusion or dissemination across Europe’s regions – no policy, governance or institutional considerations • A very macroeconomic perspective with no economic geography – a la Blanchard and Katz 1992; Barro and Sala-i- Martin 1995 9