Complexity, scientific creativity and clustering

Industrial research investments and new product development have been the key factors behind economic growth in recent decades. They have also been the most important causes of the changing comparative advantages of regions and countries. An aim of this paper is to generate some theoretical insights into the mechanisms behind the spatial clustering of research-dependent production and the impact of the increasing complexity of products and production technologies. We claim that increases in product complexity in ICT, biomedicine and other high-tech industries necessitate closer co-operation with basic science and interdisciplinary research in universities. At the same time, statistics on the allocation of R&D investments between industry and universities show that in most countries the share going to university-based research is quite low. This is especially marked in the cases of South Korea and Japan. Policy conclusions are formulated. First, national governments should increase the support of scientific research, providing a better knowledge infrastructure of industrial R&D investments. Second, increasing scientific complexity implies more support for projects with secured scientific diversity and with a leadership that can integrate different fields of science. Third, there is a need for strategy of drastic increases of science and R&D investments in southern and eastern European in order to avoid further widening of the gap between slow and fast growth regions of Europe.