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Geographers and social scientists have probed the effects of agglomeration and spatial clustering on innovation and economic growth. Economists and others have identified the role of knowledge spillovers in driving the innovation process. Although innovation is thus assumed to be a function of proximity, there has been little systematic research on the role of density in innovation. This research investigates density, and more specifically the density of creative workers, as a key factor influencing regional innovation. It uses principal components analysis to create and implement a composite measure of density and presents a model of innovation as a function of creative density. Statistical analyses including multivariate regression find that density and creativity separately and jointly affect innovation in metropolitan areas. The regression analysis finds a positive relationship between the density of creative workers and metropolitan patenting activity, suggesting that density is a key component of knowledge spillovers and a key component of innovation.
Knudsen et al. (2008) studied this question.