Innovation performance of regions. What is to be measured?

The interpretation and measurement of the innovation performance of territorial units represent well established research areas. Nevertheless the way this issue is usually addressed raises several questions. In present paper we are dealing with two of these problematic fields: the level of territorial aggregation of the analysis and the aspect from which innovation performance is judged (considered to be effective or desirable). Innovation is certainly a spatial phenomenon. In addition to that it is very much a local phenomenon, which is argued by many regional scientists. In order to reflect to these characters - beyond national or regional analyses - subregional (local) examinations are desired. However empirical analyses hardly go beyond the regional level. Beside the question of "where", the question of "what" seems to be even more problematic and neglected. The innovation performance of a territorial unit can be interpreted as the effectiveness of the system of innovation. This approach inevitably has a subjective element: the ex ante definition of effectiveness. In the literature the aspect from which effectiveness is judged is characteristically the ability to contribute to economic growth or the ability to speed-up technological change. When considering technological change a complex (socio-ecological) phenomenon this point of view seems to be inadequate, or at least accidental. Therefore we provide an empirical analysis which is carried out at subregional level, and attempts to link territorial innovation performance to the well-being of local residents. Both theoretical and methodological challenges emerge when trying to interpret and measure well-being and innovation performance at this very low level of territorial aggregation. Present paper aims to be a small step in contributing to handle these challenges.