Knowledge production, organisation and agglomeration economies

The increasing attention for the economic value of the scientific work produced in universities has resulted in a multitude of concepts concerning the production and transfer of knowledge and possible linkages with the business community. Many universities are engaged in activities aimed at improving the economic development of their respective regions. They often participate in 'Science Parks', 'Techno Parcs', and 'Technopoles'. They attempt to stimulate 'spin-offs' and to promote the further use of the knowledge produced in their departments. The regional economic impact varies with the kind of knowledge involved. Only certain parts can be put to commercial use, more in particular the technological products of the knowledge output. Property rights of knowledge have to be defended, which makes it less easy to imitate or use the knowledge in other regions. The current trend to sell knowledge makes it necessary to build a strong organisational structure, especially in the first stages of the production of knowledge that is commercially applicable. Such an organisation requires huge funds and the establishment of strong teams of experts, to prevent valuable knowledge from premature dissipation. These teams and departments have better prospects in larger urban areas with a strongly differentiated economy, with agglomeration economies and lower transaction costs. In these regions it will be easier to have spin-offs (new firms) and to retain a linkage with entrepreneurs-alumni from the universities. An efficient organisation is an important precondition for successful universities and regions.