Innovation and knowledge: Theory and regional policy

Innovation, as a concept, was introduced by Schumpeter to denote the introduction of five kinds of possible new approaches by entrepreneurs. The concepts of entrepreneurship and innovation have long been disregarded in static mainstream economics. Due to the acceptance of complexity and uncertainty, Schumpeter's theory is more difficult to model for policy purposes. Today, apart from mainstream economics, in particular Institutional Economics and Evolutionary Economics emphasize the relevance of structures and contexts, although not denying the decisive role of individual decision-making. During the last few decades, economic development and technology have shaped new international contexts for human economic activities and have altered our views on economic, political and cultural issues. Innovation theory teaches us that policies enhancing the development of “creative and innovative regions” are difficult to realize. Nevertheless, it is worth trying.