Knowledge absorption in cities and regions

The paper explores both the geographical preconditions and effects of the knowledge absorption process from the perspective of the recipitent. The paper starts from the observation that neither any single firm, nor any research institute nor any city region alone and by itself is capable of generating top level knowledge in every relevant scientific field. Knowledge is conceptualized as a bundle of knowledge elements that the innovating organization must be able to bring together fully. Without the complete set of all relevant knowledge elements-including the most sticky tacit knowledge-no radical innovation breakthrough is conceivable. The consequence is: innovation depends on bundling knowledge generated with absorbing external knowledge that is missing locally and to quickly recombine these imported elements of knowledge with locally available knowledge. In the context of national and regional innovations systems new knowledge is a rather co-evolving process. However, successfully participating in global scientific discourses depends on prior related knowledge that must be locally ready available prior to any new invention. Without investing in such prior related knowledge neither firms nor individuals are capable both to understand and absorb external knowledge. Given the current cost- and time-constrains, cities and regions with large pools of talent seem to be in a relative strong competitive position. Via constantly renewing their knowledge base and upgrading regional labour markets in terms of the local mix of qualifications cities and regions-even those with labour costs above average-might successfully be able to sustain competitive advantages in the global race for innovations. Generating knowledge alone without quickly absorbing and combining external knowledge is not sufficient.