The Knowledge Economy and Urban Economic Growth

ABSTRACT In this paper we contribute to the longstanding discussion on the role of knowledge to economic growth in a spatial context. We observe that in adopting the European policy strategy towards a competitive knowledge economy, the Netherlands is—as most European countries—mainly oriented towards industrial, technological factors. The policy focus is on R&D specialized regions in their spatial economic strategies. We place the knowledge economy in a broader perspective. Based on the knowledge economy literature, we value complementary indicators: the successful introduction of new products and services to the market (“innovation”) and indicators of skills of employees (“knowledge workers”). Using econometric analysis, we relate the three factors “R&D”, “innovation” and “knowledge workers” to regional economic growth. We conclude that the factors “innovation” and “knowledge workers” are more profoundly related to urban employment and productivity growth than the R&D-factor. Preferably, urban research and policy-makers should therefore take all three knowledge factors into account when determining economic potentials of cities.