Regional Research Frontiers - Vol. 1

Alfred Marshall’s evocative explanation for localized specialization of industry—that “the secrets of industry are in the air”—has had a profound influence on the study of the geography of innovation. Physical proximity will always be a potentially powerful vector for the transmission of ideas and tacit knowledge. However, in contrast to Marshall’s late nineteenth century industrial districts, the number and capability of means of transmission not reliant on physical proximity have greatly expanded. This chapter will review recent empirical evidence that chronicles the declining importance of physical proximity for the transmission of innovative ideas and examine alternatives for spatially dispersed knowledge management. An important dimension to be examined is the extent to which physical proximity privileges the conventional linear model of innovation and predictions of increasing concentration of innovation in global cities. In contrast, alternative models that emphasize the importance of users in innovation communities or imaginariums support innovation occurring throughout the settlement hierarchy.

This chapter explores disparities in urban innovation, in the context of the history of city systems and advanced urban economies. The overall innovative index of metropolitan economies is estimated by first generating its score on each of the latent dimensions and then adding up those performance scores across all of the dimensions. The results produced a clear set of innovation centers, spread evenly across the United States. Not only do these findings square with contemporary theory on agglomeration economies, as explained by Mulligan et al. (Ann Reg Sci 48:405–431, 2012), they line up nicely with older, less behaviorally motivated theories of central place hierarchies. The paper concludes with a discussion of the main challenges facing regional science in the research areas of innovation and urban growth.

Telecommunications technologies and their associated infrastructure play a critical role in shaping regions. From economic development and competitiveness, to shaping how citizens participate in a digital society, broadband and wireless telecommunications systems are key general purpose technologies that will continue to influence regions for many years to come. The purpose of this chapter is to explore key challenges in the continued development of the telecommunications ecosystem highlighting how future technologies might impact regions. Challenges discussed include: (1) infrastructure deployment, (2) shifting needs and uses of telecommunications systems, and, (3) future technologies. Implications for regional research and policy are addressed.

This chapter summarizes the ways in which mobility has been and will be affected by technological change over a relatively long period from the late 1800s to 2050 and the implications of this for research in regional science. The review covers the period from the Industrial Revolution to the mid-2000s. Out of necessity the scope will be broad, encyclopedic and somewhat general. The extrapolation of how mobility will be affected by technological change in the first half of the twenty-first century will be the primary and concluding focus of the analysis.

The relationship between the rate of business formation and growth has long been a widely accepted but empirically nearly-neglected foundation in economics. Regional economic analysis creates the possibility of a tractable geographic scope to better capture this relationship. Along with the more recent availability of regional data with the necessary depth and breadth to properly evaluate such a framework, these analyses have finally begun to clarify the clear and often surprising links between entrepreneurship and growth. Some of the most intriguing and promising perspectives come from the additional consideration of gender within this entrepreneurship/growth structure. Women are underrepresented in entrepreneurial initiatives even in the most advanced economies, yet are quickly becoming the dominant new entrants in the highly-skilled segment of the labor force. This labor supply is the likely source of the most innovative entrepreneurial initiatives, with the greatest potential for economic value-added and job creation.

This paper discusses the future of technology and its implications for regional agglomeration and related research. In regions with strong agglomeration economies, positive externalities generated by spatial proximity lead to higher productivity. Urban scale economies raise the productivity of people residing in dynamic cities. Firms benefit from regional clusters of similar firms. Now we are entering a second machine age, with potentially exponential growth in productivity based on pervasive, interconnected computing power, massive digital information, machine learning, artificial intelligence, and robotics. Productivity may depend more on the “cloud”-based advantage of machines, rather than “crowd”-based advantages of humans. Employment may fall with the automation of routine tasks. However, non-routine tasks requiring tacit knowledge may rise, given comparative advantages with machines. Machine learning and robotics will both substitute and complement employment. Agglomeration benefits may then accrue to regional employment based on non-routine tasks. Even so, the size and stability of agglomeration benefits will require further inquiry. With better measures of agglomeration, future research will potentially delve deeper into the three main sources of regional productivity from agglomeration: (1) better labor skill matching and local pooling; (2) more efficient input sharing along deeper and specialized supplier relationships; and (3) enhanced localized learning and knowledge flows.

Policymakers at all levels of government try to design policies to promote economic growth. Many of these policies have a goal of attracting new businesses to an area, as new businesses are considered a key driver of local economic growth. An emerging literature suggests that such policies have heterogeneous effects on economic growth, both in terms of how the effect of the same policy may vary across locations as well as how different policies spur different types of growth. In this chapter, we discuss the insights provided by the existing literature on the effect of government policy on local economic growth. We pose questions that have not been fully answered, and for which the evidence is mixed, and discuss methodologies that future work should consider utilizing in order to answer these pressing issues. We also discuss the importance of data and the ideal types of data that should be collected and analyzed in the future. Evaluating the features and outcomes of policies will continue to be an important role for regional scientists over the next several decades, as government officials seek guidance when designing policy and allocating scarce resources.

Accurately forecasting regional economies for periods beyond a few months requires more than simple trend extrapolation. The forces that affect regional economies continually alter recent trends in the data. In addition, consumers of regional forecasts seek an understanding of the forces that underlie recent trends, which can be used in making sound policy or financial decisions. This essay argues for a greater role for research in forecasting regional economies. The central thesis is that current regional forecasting efforts need to be improved and supplemented with insights from regional science research. Major research areas of focus include dependence between sectors, dependence between regions, identifying demand from supply, labor market closures, incorporating a housing sector, the importance of occupational structure, benchmarking regional forecasts, sub-state forecasting and analysis, and industry trend analysis.

The next 50 years of energy development will be challenging for policymakers because the driving forces have changed substantially throughout the past two decades. Techno-economic, strategic, social and environmental aspects of energy in a given region will likely define the future of regional research in this field. Furthermore, the interaction among these issues will be the mainstream of regional energy economics research. First, this chapter briefly describes the current regional energy research topics of exploration, production, transport and end use; it also organizes and classifies some energy policy mechanisms and develops a new approach to help policymakers better design and deploy those mechanisms. Then, it illustrates the most challenging questions and cutting edge research that policymakers will deal with in the next 50 years, as well as the methods that may likely be used to answer these questions. The main finding is that the tendency in energy research will be interdisciplinary, covering correlated quantitative and qualitative disciplinary research to achieve broader and more robust solutions. It will be increasingly important for policymakers to design and deploy energy policies that cover multiple aspects. The connection among policymakers, market and academia in techno-economic, strategic, social and environmental aspects of energy will be the main driving force for future energy research.

Spatial and locational dimensions of public health are attracting increasing attention among regional scientists whose analytic methods and frameworks can provide valuable insights into well-being challenges. Regional economic, demographic, and environmental processes are critically important to people’s health and access to health care. Such effects can be modeled and analyzed using spatial analytics and regional approaches. This chapter reviews contributions by regional scientists to public health research and intervention. Research challenges and opportunities are discussed in several broad areas of public health, including health disparities, environmental health, access to health services, and public health intervention.

Over the last several decades the scientific world has seen an unprecedented growth in new knowledge, accompanied by an explosive growth in scholarly literature published in a rising number of journals. Conventional wisdom tells us that the new knowledge is built on top of current knowledge, which in turn traces its origins to older knowledge. However, this linear view of knowledge growth, studied typically with citation analysis, may not be universal. Many of us have heard or known of a significant scientific idea that was not recognized at the time it was discovered/invented and published; rather it lays dormant for an unspecified period of time till it was rediscovered much later for its contribution in the creation of valuable new knowledge. Such scholarly work with delayed recognition has been euphemistically referred to as “sleeping beauties” that were discovered by “waking princes” (new scholarly work).

In this paper, we propose to study whether the field of regional science/economics has these so-called “sleeping beauties”; who, why and how long they laid in deep sleep; when and where they were rediscovered by “waking princes”: in brief, the dynamics behind the existence and delayed recognition of dormant but influential knowledge.

Governments around the world implement policies aimed at developing certain geographic areas or regions within their respective countries. During the last few decades, local authorities have been assuming a predominant role in the design and execution of these policies. It has been argued that the decentralization of such responsibilities can potentially induce regional governments to behave strategically, initiating a fiscal competition game that would diminish the effectiveness of regional policies. This chapter critically reviews some of the most recent advancements in the literature, focusing on the work that examines the impact of fiscal competition on policy outcomes. At the same time, it intends to identify issues that require further study and provide guidance on the direction of future research in the area.

The recent financial crisis has been a powerful reminder that the intersectoral flow of funds is also—always and everywhere—a local phenomenon with real effects. Yet, the contemporary canon of regional economic theory has enshrined the classical dichotomy, treating the spheres of money and production as analytically distinct. Consequently, the current literature has little to say about monetary phenomena and their spatial consequences. The widespread disengagement of regional scientists with respect to issues of money, credit and banking represents a radical break with the discipline’s intellectual origins over half a century ago. This chapter re-examines the monetary content of some of the foundational works in regional science. In particular, I argue that August Lösch and Walter Isard, the former a student of Joseph Schumpeter’s and the latter a student of Alvin Hansen’s, both represent important branches in the long lineage of twentieth century continental and U.S. monetary thought, respectively. In doing so, this chapter also outlines key elements of a research agenda that reengages with regional aspects of money and credit, casting them as central pillars of a Lösch-Isard synthesis.

The frequency and magnitude of disasters are increasing throughout the world. With few exceptions their major impacts are typically limited to the regional level. Disasters can threaten the survival of regional economies, as witnessed in recent years following Hurricane Katrina, the Wenchuan earthquake, and the Fukushima nuclear meltdown. Predictions of future disasters are even more dire, especially with regard to climate change and terrorism. Resilience, broadly defined, refers to the ability to withstand and recover rapidly from such short-term and long-term threats. This chapter examines the important dimensions of economic resilience in relation to regional science. Recent advances in defining and measuring this concept have overcome the criticism that resilience is a vacuous buzzword. Still, much work needs to be done to understand regional resilience, make it more relevant to regional research and practice, make its implementation more cost-effective, and make it applicable to a broader set of future disasters. This chapter focuses on key topics related to regional economic resilience, including: its key dimensions, spatial aspects, behavioral aspects, how it differs between regional and national economies, measurement of cost-effectiveness of alternative resilience tactics and strategies, and the relationship between resilience, adaptation and sustainability. The chapter concludes with a discussion of future research with an eye to solidifying the foundations of regional economic resilience and the identification of future research challenges.

Natural hazards, such as earthquakes, hurricanes, tornados, and flooding, damage physical and human capital and disrupt economic activities, leading to a disaster situation in the regional economy [According to Okuyama and Chang (Modeling spatial and economic impacts of disasters, Springer, 2004), a natural hazard is the occurrence of a natural event, such as an earthquake, hurricane, flooding, sever weather condition, and so on, and disaster is its consequences to our society. These two terms, hazard and disaster, are used with these definitions throughout this chapter]. The economic effects of such disasters have been investigated and evaluated using regional economic models. In recent developments in terms of climate change and resilience of a society as well as globalized economic system, research on regional and interregional effects of disasters has become more important than ever. This chapter argues that regional science research is central to disaster impact analysis and proposes the World Disaster Impact Simulation System, which will be fully developed over the next 50 years, enabling many features currently not available but necessary for improving disaster impact analysis. The essential and crucial breakthroughs needed for and challenges of developing such a system are presented and discussed with the contributions from regional science research.

Growing concerns over the vulnerabilities of cities and regions to climate change and other environmental, economic and social stressors underscore an increasing awareness of the interdependencies among the environment, economy and society. Sustainability—concerned with societal well-being and the maintenance of natural, manufactured, and human capital and other community assets over the long run—and resilience—focused on short-run recovery and adaptation to negative external shocks—have emerged as two key policy criteria. Although scholarship has lagged behind, the concepts of sustainability and resilience have been meaningfully defined in the literature and, in some cases, grounded in theory and empirically applied. We highlight these approaches and discuss future research needs and opportunities, including vastly more data and models that better account for open economies, integrate economic and environmental components, and provide a basis for welfare assessment. We conclude that regional scientists are well-positioned to take on these challenges.

Large and sudden migrations occurred at many stages in human history, but the combination of increased longevity, declining fertility rates, and aging of populations have no counterpart. Although much longer in the making—modern urbanization began in the late eighteenth century in England—the degree of global urbanization, which passed the 50% mark only around 2010, is also without historical precedent and has not yet run its course. Because of these changes, today migration is a major driver of demographic change in developed as well as in developing economies. The most dramatic new migrations are responses to changes in economic, social, political, and environmental conditions and are continuously evolving and often rapidly changing. In this chapter, we argue that this type of migration should be a research priority for the next half century.

Human capital has been an important source of growth for cities and regions and a driver of differences in wage levels, with a large and growing body of literature exploring its sources, growth, migration, and implications. Increasingly, however, the questions are not what the returns to investment in human capital are and where those returns are maximized, but what factors are associated with decisions to invest in human capital. How does where we grow up, where we live, where we move to, and where we work matter? Although we are increasingly close to having the data to build a picture of those decisions, they bring with them a potentially larger number of theoretical and econometric issues. How do we meaningfully identify these relationships? Can we use big data as a means to shed light on what drives the accumulation of human capital? This chapter will provide some initial thoughts and insights into understanding our investment in human capital in the era of big data.

Regional science came of age in the post-World War II era, when rapid advances were being made in many fields of science and computational technologies were blossoming; large-scale urban and regional modeling and normative approaches to planning were in vogue. The multidisciplinary field has perhaps been most closely associated with its methods. But the topics of regional science research have also reflected conditions extant in a world undergoing a profound demographic transformation. The most developed countries have now completed their long-term fertility transitions, and most of the still-developing countries have now moved out of the early expanding stage. At a regional and local scale, settlement patterns in much of the developed world have been characterized by urban sprawl and suburbanization, as well as periodic counter-urbanization starting the 1970s, while in the developing world rapid urbanization has been the norm with the growth of many new mega-cities. These trends all reflect the changing age composition attendant to demographic transition. In this chapter, we attempt to lay out some of the changing needs and issues for regional research as world population growth slows, as labor forces age in both more developed and rapidly developing countries, as advances in gender equality proceed apace, and when, in many regions, little population change or even population losses become as likely as continued population growth. We offer some provocative thoughts on nine broad topics where we think looking through the lens of demographic aging can help scope out policy concerns and research needs for the future.