Is Networking a Substitute or a Complement to Regional Innovation Capacity? Evidence from the EU's 5th Framework Programme

The present policy note draws from original empirical work attempting to shed some light on the joint importance of regional innovation capacity (proxied by a novel index of regional agglomeration of knowledge intensive employment) and scientific networking (proxied by an index of interregional collaboration in FP5) on R&D productivity and draw comparisons. Our findings indicate that there are distinct paths to obtaining ¿critical mass¿ for scientific and technological research. The regional agglomeration of innovation capacity is important for the productivity of technological research whereas this is not the case for scientific research; likewise, scientific research is more productive in regions that are well connected in interregional knowledge production networks, but the same networking has no discernible effect on technological research. These findings suggest that differentiated responses will be needed, with increased networking for scientific research and a strengthening of regional innovation capacity for technological research.