Innovation in Regions

The problem of regional economic development is closely related to the ability of organizations in that region to innovate. Research has shown that this ability differs between regions and is even influenced by the characteristics of a region. The milieu of innovation thesis suggests that several different regional factors affect the innovativeness of a region. The hypotheses of this present research are based on this assumption. The innovation of a region depends on the following factors, all of which have a positive impact on regional innovativeness: (1) wealth, (2) the development of gross domestic product (GDP), (3) cultural diversity, (4) the talent of the population and (5) the density of the population. The research is based on data compiled from Eurostat and national-regional data from all European Union countries. We used linear regression methods to analyse the data. The data analysis provides support for hypotheses 1, 3, 4 and 5. That means that wealth, cultural diversity, talent and density do have a positive influence on innovation. However, hypothesis 2 has been rejected. There is indeed a strong, negative correlation of GDP with innovation. A further in-depth qualitative analysis of regional characteristics explains the results of the regression analysis.