CITIES IN THE KNOWLEDGE ECONOMY:NEW GOVERNANCE CHALLENGES

September 2004

Willem van WindenLeo van den Berg

European Institute for Comparative Urban ResearchPO box 1738

3000 DR Rotterdam, The NetherlandsPhone: + 31 10 408 2740 / 1186

www.euricur.nl

Foreword 3

Executive summary 4

1 Introduction 6

2 Cities in the knowledge economy: A literature review 8

3 Framework of reference 14

4 Towards a typology of cities 18

5 Governance issues 30

6 Policy conclusions 38

References 42

Executive summary in german, french and dutch

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ForewordIt gives me great pleasure to present to you –on behalf of all STRIKE members- this report:“Cities in the knowledge economy: new government challenges”. The Dutch Ministry of the Interior and Kingdom Rela-tions initiated in May 2004 the establishment of the URBACT Working Group STRIKE, in the light of the preparation ofthe urban ministerial meeting under Dutch Presidency. At this meeting which was held on the 30th of November in Rot-terdam, Ministers acknowledged the contribution cities can make to the development of the knowledge economy and tothe prospects of European economic success.

This STRIKE report pre-sorts on this urban contribution to knowledge economy. One of the main objectives we envisa-ged with the STRIKE report was to analyse the role of cities in the knowledge economy and how this role could be opti-mised. In the report a model, is presented, which helps cities to identify their position in the knowledge based economyand which challenges need to be faced. This model also clearly shows that knowledge economy is more than just ICTand glass fibre. If cities truly want to strengthen their position in the knowledge economy, a more holistic approachtowards knowledge economy is needed including issues as: How to attract knowledge workers? How to improve the qua-lity of life in a city? How to strengthen social equity?

Typologies have been developed which describe the different characteristics of cities and where they stand now. Thesetypologies underline the need for a tailor-made approach towards cities in the field of knowledge economy. Not all citiesare alike and national governments need to take these differences into account. This model offers a basis for further coo-peration with national government and between cities (within and outside national borders).

I greatly appreciate the participation in this URBACT Working Group of other national governments (Ministère de l'Équi-pement, des Transports, de l'Aménagement du territoire, du Tourisme et de la Mer/DATAR and the Office of the DeputyPrime Minister from the UK) and local authorities (Aachen, Eindhoven, Enschede, Manchester, München and Leuven) incommenting the report and its recommendations.

All in all, represents this report a good and interesting basis for further discussion and cooperation. I am looking forwardto strengthening this cooperation, especially in the light of the Lisbon agenda.

L.A.M van Halder

DIRECTOR GENERAL FOR KINGDOM RELATIONS AND GOVERNANCE

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Executive summaryIn debates about Europe’s position in the knowledge economy, the role of cities is rarely mentioned. This is quite surpri-sing, as the knowledge economy is very much an urban economy. Moreover, generalised discussions about the know-ledge economy —useful as they are— hide a very differentiated picture: some urban regions do very well, while othersstay behind. In this discussion document, we make an attempt to fill this gap, and put the spotlight on the role of citiesand urban regions in the knowledge economy. We argue why cities are important entities in the knowledge economy.More in particular, this paper focuses on the interrelations between local, regional, national and EU actions to promotethe knowledge economy on the urban level. It illustrates current practices in various countries, and seeks to raise dis-cussions about improving the governance of the knowledge economy.

The Dutch Ministry of the Interior and Kingdom Relations was the initiator of the Urbact project STRIKE (Strategies forurban Regions in the Knowledge Economy) that led to the publication of this paper. Other national organisations that par-ticipated were the ODPM (Office of the Deputy Prime Minister) of the UK, and DATAR (Délégation à l’aménagement duterritoire et à l’action régionale) of France. The participating cities were Aachen, Enschede, Eindhoven, Leuven, Man-chester and Münster. They share a high ambition to strengthen their position in the emerging knowledge economy anda willingness to exchange experiences and learn from one another.

The key point made in this paper it that exploiting and further developing Europe’s distinctive urban strengths is an impor-tant though often ignored step to reach the Lisbon goals.

In this paper, we see the development towards the knowledge economy as an inescapable trend that affects all cities. Ithas a couple of features that are not new as such, but that have intensified in the last decade. In the knowledge econ-omy, knowledge and information are the main inputs and outputs; there is an ever-increasing diffusion speed of infor-mation and knowledge; the knowledge economy is a network economy, where connectivity increasingly matters; in theknowledge economy, there is a high premium on entrepreneurship and innovation; the knowledge economy is very vol-atile; Finally, in an increasing number of sectors —research, biotechnology—, ‘critical mass’ matters.

Urban areas —different as they are— are focal points of the knowledge economy in many respects. It is mainly in citiesthat knowledge is produced, processed, exchanged and marketed. Cities are best endowed with knowledge infrastruc-ture (universities, other educational institutes, etc.); they tend to have higher than average shares of well-educated peo-ple; they are best endowed with electronic infrastructure, they are well connected to the global economy through air-ports; they have a function as a place where knowledge is exchanged, and as breeding nest for talent and newcombinations. It is therefore no coincidence that many larger cities have experienced a remarkable revival in the 1990s.At the same time, the knowledge economy has a tendency to produce a dual economy, with an increasing polarizationbetween a class of well-paid knowledge workers and an underclass of people who lack the skills and resources to par-ticipate. The polarization is felt most strongly in cities with a legacy of declining industries, and sometimes takes the formof clear spatial segregation.

This paper, using an analytical framework, shows that there are large variations between different types of cities concer-ning their economic potentials and their problems of social exclusion. This has policy implications. Local actors knowbest what the opportunities and threats are. Therefore, national governments should make use of the cities’ knowledge,energy and networks; national governments and the EU could encourage local actors to develop regional strategies inpublic-private partnerships, and support these strategies in different ways. This can be done by providing financial incen-tives and by giving regions more freedom to experiment with legislation. The same differentiated local approach is nee-

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ded to tackle issues of social exclusion that are associated with the emerging knowledge economy. The causes of exclu-sion differ in the various local contexts, and every city needs to develop its own approaches.

A more localized approach asks for stronger competences of policymakers on the local level. They should be given morefreedom to operate in order to develop innovative solutions. Also, in order to give them incentives to develop and imple-ment good ideas, a more entrepreneurial attitude is needed within local governments and semi-public organisations thatare responsible for local/regional economic development. At the same time, national governments should dare to makeclearer choices and focus their investments where the best returns can be expected.

Encouraging and promoting regional initiatives is not enough to develop the ‘top league’ of the knowledge economy. Foran increasing number of activities, there may only be room for one or a few top locations in Europe, because of the cri-tical mass and high investments needed, and because of unprecedented complexity and specialisation. Choices have tobe made. Europe has been successful in this respect in the aircraft industry (Airbus) and in the promotion of nuclear rese-arch (CERN). A key question for Europe’s policymakers is how to create or support centres or networks of excellence ona European scale. If Europe fails to create more of such centres, it will continue to lose talent and resources to othercountries, notably to the US. Choices have to be made: the current fragmented landscape of research funding shouldchange radically. An increased co-ordination of research and innovation policies within and among EU member states isneeded and will strongly benefit the cities.

The paper suggests that the knowledge economy is causing shifts in Europe’s urban system. The best cards seem to bein the hands of internationally connected metropolitan areas that have a diversified economy, a strong knowledge base,and a high quality of life. These cities’ relative position is likely to improve further: with increasing internationalisation ofresearch and business, their cultural diversity and accessibility are clear assets to attract (foreign) firms and people; also,they will benefit from the trend of improving co-operation between universities and business, because they are strong inboth respects. A key policy question for national governments is whether to back the winners or help the losers: investin the already thriving places, or in the weaker areas. ‘Backing the winners’ would lead to an increased concentration ofhuman capital and knowledge-intensive business in already densely populated metropolitan areas: these regions couldbecome even more attractive for investments from abroad. Concentration has a price too, in terms of congestion andcrowding out. Also, it may further hollow out the knowledge base of provincial cities and disrupt the spatial balance.

The position of non-metropolitan urban regions needs specific policy attention. They are a vital part of Europe’s urbansystem, and typically have an important function for large hinterlands. To safeguard the vitality of these cities, policiesneed to be formed that strengthen their specialisation. If governments want to maintain a spatial balance, they couldencourage smaller non-metropolitan cities to develop specific specialisations, and to engage in strategic partnershipswith other cities. Or, they could directly invest in facilities in fields where the regions have potential: this can create criti-cal mass in specific fields, which is increasingly needed in the knowledge economy.

In defining the geography of the knowledge economy, it is fruitful to think in networks consisting of nodes and linkages.Rather than defining space in terms of individual cities or city regions, we should conceive regions in terms of access tospecialised knowledge resources. If we look at Europe’s urban system in this way, we may see larger regions with enor-mous knowledge resources and potential. If these resources would be better aligned to each other, the potential can befully reaped.

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1 IntroductionThere is an ongoing debate about Europe’s position in the knowledge economy. Again and again, the factors are repea-ted that would be responsible for Europe’s poor performance: Europe has too rigid labour markets; the entrepreneurialspirit is insufficient compared to some other parts of the world; taxation and generous welfare states are too much of aburden; administrative procedures, bureaucracy and rigid legislation prevent dynamism; Europe would lack real ‘top’institutes and universities, and loses its talent to the US; investments in education and research are too low. The EUcountries agree that something has to be done: all kinds of legal barriers must be removed, the internal market shouldbe further developed, national policies should be better aligned, national governments and companies should investmore in R&D, and incentives should be created to improve the co-operation between business and universities. Theseambitions, and a lot more, can be found in The Lisbon Agenda.

In debates about Europe in the knowledge economy, the role of cities is rarely mentioned. This is quite surprising, as theknowledge economy is very much an urban economy. Moreover, generalised discussions about the knowledge economy—useful as they are— hide a very differentiated picture: some urban regions do very well, while others stay behind.

In this discussion document, we want to fill this gap, and put the spotlight on the role of cities and urban regions in theknowledge economy. We will argue why cities are important entities in the knowledge economy. More in particular, thispaper focuses on the interrelations between local, regional, national and EU actions to promote the knowledge economyon the urban level. We want to illustrate current practices in various countries, learn from good practices, and analysehow the governance of the knowledge economy can be improved.

This report is partly based on the findings of a recent study by Euricur (European Institute for Comparative Urban Rese-arch) about cities in the knowledge economy (Van den Berg, Pol, van Winden and Woets, 2004). In that study, nine Euro-pean cities are described and analysed. We will use the same framework of reference as we did in that study, and usesome of the case study material as well. Furthermore, additional information was gathered in the European Urbact pro-ject STRIKE (Strategies for Towns and Regions In the Knowledge Economy). The case studies are based on policy docu-ments, web resources, and expert interviews with policymakers on all levels, people from the private sector and univer-sities.

The Dutch Ministry of the Interior and Kingdom Relations was the initiator of the Urbact project. Other national organi-sations that participated were the ODPM (Office of the Deputy Prime Minister) of the UK, and DATAR (Délégation à l’a-ménagement du territoire et à l’action régionale) of France. The cities that actively participated in the STRIKE projectwere: Aachen, Enschede, Eindhoven, Leuven, Manchester and Münster. They share a high ambition to strengthen theirposition in the emerging knowledge economy and a willingness to exchange experiences and learn from one another.

This report is organised as follows. First, we describe some characteristics of the knowledge economy (section 2).Second, we will briefly present a frame of analysis (section 3), that forms the basis for the analysis of the position anddevelopment of cities in the knowledge economy. Section 4 derives a tentative typology of cities and their performance,based on that framework, and presents a number of concrete examples. It shows that there are large differences bet-ween cities. In section 5 the focus is on policy. We describe how various policies (European, national and local) have animpact on the development of the knowledge economy on the urban level; also, we discuss problems of policy co-ordi-nation, and present some recent European examples and policy frameworks that are aimed to improve policy co-ordi-nation and effectiveness. Section 6 draws policy conclusions. The report ends with section 7, which contains a numberof theses that are to be discussed during the high-level expert group meeting.

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2 Cities in the knowledge economy:a literature review

2.1 Introduction

Much has been written about the knowledge economy and the role of cities. This chapter contains a structured overview,as an introduction into the topic. Section 2.2 deals with the characteristics of the knowledge economy in general; secti-on 2.3 is about the role of cities.

2.2 What are the characteristics of the knowledge economy?

It is not easy to define which cities are successful in the knowledge economy, because it is difficult to define what is andwhat is not knowledge economy. It can be argued that all the capitalistic economy is a knowledge economy, becausetoday, to varying degrees, production systems are increasingly de-materializing their processes, putting much emphasison information as added value (e.g. logistics, web services, e-culture, Information and Communication Technologies(ICT), etc.), and depending on knowledge as crucial input.

Knowledge and information are the main inputs and outputsIn the words of Stiglitz (1999), ‘knowledge and information is being produced today like cars and steel were produced ahundred years ago. Those who know how to produce knowledge and information better than others reap the rewards…’(p. 1). The growing class of ‘knowledge workers’ doesn’t produce any tangible product, but is continuously transformingknowledge and information into new knowledge and information for which there is a market. They make up for the vastmajority of the workforce in advanced economies. Reich (1991) invented a term for this class of people: symbolic ana-lysts. These people tend to be well educated; they earn high salaries, and subsequently put high demands on the qua-lity of their living environment.

Higher diffusion speed of information and knowledgeIt can be argued that due to globalization and the new ICTs, the diffusion speed of information and knowledge has incre-ased dramatically. New knowledge or innovations that formerly took months to spread are now globally available inseconds. This speeds up the process of new knowledge creation. Also, because so much information and knowledge isavailable nowadays, it has become a crucial ability to select and interpret new information and knowledge, and to turn itinto profitable activities (see Castells, 2000 and Howells, 2002)

The knowledge economy is a network economyThe rapid developments in knowledge and information make that no single person or company can master all disciplines,or monitor all the latest developments. For companies, it is increasingly crucial to engage in strategic networks, in order to‘tap’ into complementary knowledge resources in a flexible way. Networks enable to respond more quickly to rapidly chan-ging markets and technologies, and they are conducive to creativity to produce new combinations. Every ‘node’ (which canbe a company, a person, but also a city) in the knowledge network has to develop its own specialization (Castells, 2000).

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In the knowledge economy, there is a high premium on entrepreneurship and innovation.The shift away from relatively stable and standardized mass-manufacturing to highly volatile niche markets, combinedwith the rapid changes in technology, opens many new opportunities for entrepreneurs who are able to find the nichesand mobilize resources. Many argue that the ‘entrepreneurial climate’ in a city or country is therefore an important deter-minant of success in the knowledge economy. Schumpeter distinguished five kinds of innovation: products, processes,new markets, new inputs (like new materials) and new organizational forms. In the dynamic process of competition threekinds of competences are mentioned: cognitive, innovative and organizational. Besides these entrepreneurial compe-tences, also several external structural characteristics can influence the outcome of the competitive process.

The knowledge economy is very volatileCompanies can grow very quickly, but also decline very quickly. This can be explained by various factors. On the onehand, technology and markets change very rapidly, which means that companies can win (or lose) market share if theymake the right (or wrong) decisions. On the other hand, in many sectors in the knowledge economy, it is very expensiveto develop a new product (a movie, or a software program), but once it has been developed, the reproduction costs arealmost zero. Thus, if the product is a ‘hit’, the company makes a lot of money and can expand, but if it is a flop, it losesout. For cities, this has consequences. First, a strong dependence on a single company (think of Nokia in Helsinki) is dan-gerous. Second, fostering innovative start-ups may have a high premium, if they happen to grow big.

There are different trajectories towards the knowledge economyThere is no single and unambiguous way for countries to make the transition to a knowledge economy. Different coun-tries, with their own traditions, culture, history and background, have walked very different paths. Castells and Himanen(2002) make a distinction between three rather extreme models: the US model, the Singapore model, and the Finnishmodel. These three countries ranked at the top of most competitive ‘new economies’ by the end of the 1990s. All of themhad observable strengths in infrastructure, production, and knowledge of information technology. They have the highestpenetration rates of new technologies such as the Internet and mobile phones. Also, in terms of competitiveness andinnovative capacity, all score very high. At the same time, these countries are very different from each other in a numberof respects. Finland is very different from the others with respect to its very large welfare state and commitment to ega-litarism. This country combines very low poverty and social exclusion with high economic dynamics. Singapore is anexample of a country that is very competitive but lacks democratic governance. The US stands out in its extremely flexi-ble labor markets and the high rewards on entrepreneurship, but has also high levels of inequality and social exclusion.

The Finnish case raises the question whether in the knowledge economy, the textbook trade-off between equity andequality still holds. More inequality (large income differences) increases incentives to engage in successful activities.However, at the same time, it can be argued that higher equality leads to more demand for high tech and innovative pro-ducts. The argument runs as follows: in consumer markets, there is a shift away form standardized ‘mass’ markets tomore specialized and sometimes even interactive demand. It is commonly agreed that the budget share of basic goodsdeclines with rising income. With more equal incomes, more people have means to purchase innovative goods, whichcan spur the local or national innovative industry (Zweimüller, 2000). The Finnish experience with mobile phones supportsthis claim. Recent research has suggested that, at least for countries, the ‘traditional’ thesis that greater equality leadsto less efficiency is not proven (Atkinson et al., 1995). In particular, if transfer payments are used for education, growthrates can actually rise.

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2.3 What is the role of cities in the knowledge economy, and what determines their success?

Urban regions are the focal points of the knowledge economyCities are the focal points of the knowledge economy, because it is mainly in cities that knowledge is produced, proces-sed, exchanged and marketed. Cities are best endowed with knowledge infrastructure (universities, other educationalinstitutes, etc.); they tend to have higher than average shares of well-educated people; they are best endowed with elec-tronic infrastructure, they are well connected to the global economy through airports; they have a function as a placewhere knowledge is exchanged, and as breeding nest for talent and new combinations. It is therefore no coincidencethat many larger cities have experienced a remarkable revival in the 1990s.

The creation of new knowledge mainly takes place in cities. Cities with a strong knowledge base seem to gain in theknowledge economy. In Finland, Helsinki and other university cities in the country were the main drivers of economicgrowth during the second half of the 1990s (OECD, 2002). Mathiessen et al. (2002) analyze the scientific output of 40cities. They assume that a solid knowledge base is reflected in the economic life of a city and that it is, therefore, of incre-asing importance for urban economic growth and change. Can cities do without producing knowledge themselves?According to Castells and Hall (1994), this is problematic: in their view no region can prosper without some level of lin-kage to sources of innovation and knowledge production.

Urban regions attract talentThe urban knowledge economy thrives on talented people who create new knowledge and ideas. From this perspecti-ve, Florida (2000) studies the location behavior of ‘talent’. Among other things, he finds that quality of life in a place is akey determinant to attract and retain these people. ‘Talented people do not simply select a place to work based on thehighest salary, they are typically concerned with a whole series of place-based characteristics’. Florida (2000) empirical-ly found that cultural activities and amenities are increasingly central determinants of urban competitiveness. Talentedpeople are attracted by places where they can enjoy life (Castells, 2000). There is also a cumulative effect: as Florida putsit “… talent tends to attract talent” (Florida 2000, p. 15). Van den Berg (1987) also finds that quality of life in urban areasis a location factor of growing importance: highly skilled people will live in cities that offer high quality of life, and com-panies will follow. Many empirical studies confirm the link between human capital and urban economic growth (see forinstance Glaeser, Sheinkman and Sheifer, 1995 and Simon, 1998). Results of the Urban Audit convincingly demonstratethat the preference for urban living of the higher-educated (Dijkstra, 2004).

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Figure 2.1 % of residents with university degree in larger cities (>250,000) and medium-sized cities (between 50,000 and250,000 inhabitants) in seceltec cities in EU member states

Source: Urban Audit II

The diversity in urban regions is an assetUrban diversity promotes creativity. The scale of cities and their diversity of inhabitants create the interactions that gene-rate new ideas. Diversity is a measure of the degree of system openness. The places that attract diverse groups of peo-ple (by ethnicity, nationality, gender and sexual orientation) can be said to have an environment that is easy to plug into;such places can be said to have low entry barriers for talent (Florida, 2000).

Big is beautifulIn the knowledge economy, to a large extent, big is beautiful. The size of the city matters as attraction factor for bothcompanies and knowledge workers. For companies, in a larger city is it easier to find specialized staff. Glaeser (2000)found that it is the need to access common pools of labor rather than access to suppliers and customers that drives thetendency of firms to cluster together in cities. For the knowledge workers, being in a large metropolitan area increasesthe variety of jobs available. This is especially relevant for households with two knowledge workers. Larger cities tend tohave bigger airports through which more destinations can be reached, and many of them are nodes on a high-speed railnetwork; larger metropolitan areas are relatively attractive for foreign direct investment as well. Their scale offers scopefor international subcultures and amenities such as international schools.

Residents with a university degree in 2001

0%

5%

10%

15%

20%

25%

30%

35%

EE FI CY LT BG DE

DK

NL SI

LU FR SK

UK EL IE PL

HU SE LV CZ

PT

Mediumsized cities

Large Cities

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Cities are good environments for knowledge exchangeIn the knowledge economy, one of the drivers of innovation is the exchange of tacit knowledge among actors. Cities canbe good environments for this type of exchange. Already in 1890, Marshall described the powerful dynamics in industri-al districts, where geographically concentrated groupings of firms, large and small, interact with each other via subcon-tracting, joint venture or other collaborative means, gaining external economies of scale in doing so (Cooke, 1995), thusderiving international competitiveness from local sources. Porter (1990) describes how clusters of densely networkedfirms serve global markets while deriving their strength from a regional basis. He discerns four conditions as essential inthat development: factor conditions (quality of labour, capital, knowledge available), demand conditions (scale and qua-lity of the regional home market), supplier industries (globally competitive suppliers, specialized services) and businessstrategy (rivalry between local firms but also willingness to co-operate in research, sales and marketing). In particular, theinterplay of competition and co-operation is fundamental. Too much competition may be destructive, but the same holdsfor too much co-operation when it degenerates into the formation of cartels (Cooke, 1995; Harrison, 1994). Lazonick(1992) and Boekholt (1994) stress that in clusters, a major role is played by other than interfirm linkages: links withgovernment-supported scientific institutes, ties with the scientific community and professional associations are impor-tant factors in a clusters’ performance.

In the knowledge economy, proximity mattersStill, the question remains why proximity still seems to matter in networks, where modern communication technologytheoretically permits spatial dispersion. Several reasons are put forward. First, face-to-face contacts appear to be veryimportant as sources of (technological) information and in the exchange of tacit knowledge (Leonard-Barton, 1982;Malmberg et al., 1996). Spatial proximity greatly enhances the possibility of such contacts. Howells (2002), in this res-pect, argues that knowledge is codified at global level, while is tacit at local level. Second, co-operation between actorsrequires mutual trust. This holds particularly when sensitive and valuable information is exchanged, for instance in a jointinnovation project. Several authors (Piore and Sabel, 1984) argue that cultural proximity, i.e. the sharing of the samenorms and values, is an important factor in that respect, since co-operation is a human phenomenon. A very relevantissue concerning the spatial dimension of clusters is how local networks relate to global networks. In the local-globalinterplay, transnational companies (TNCs) play a special role. Malmberg et al. (1996) stress that if a TNC is rooted andintegrated (‘fledged’) in the region and engaging in regional networks, it can act as an important disseminator of newknowledge, information and innovation from abroad into the region. This is particularly relevant for research and deve-lopment activities: knowledge flows are facilitated by personal relationships, and mobility of employees or spinouts fromthe large firm.

The economic base of a city is a determinant of its success in the knowledge economyIn general, cities that used to be specialized in traditional industry and port activities do less well than cities that have amore diverse economic base. They tend to have a lower educated population, lower quality of life and housing stock,and often suffer from a bad image. The assets that counted in the industrial age (proximity to raw materials, seaports)lost much of their value. In Europe and the US, many industries turned away form the old and polluted industrial centers,and moved to areas in the Sunbelt, to less polluted and crowded suburban areas or to smaller towns (see van den Berg,1987, and others). These structural factors are hard to change over time, although some cities have managed remarka-bly well.

Simmie (2002) states that innovative activity is highly concentrated in some metropolitan and regional capital cities. Hereviews the local knowledge spillovers hypothesis as an explanation for the geography of innovation, arguing that it offersonly a partial explanation. The reasons for this are, first, that there are many city-regions that possess universities andindustrial R&D facilities but have yet to join the top-ranking cities as centre of innovation; secondly, innovation is not justdriven by technology push factors, but also by demand-pulls (often by clients based in other advanced countries). It is

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argued that international contacts and networks conducted by face-to-face contacts facilitated by international hub air-ports are critical factors for international knowledge transfer. Finally, he argues that the most successful cities are thosethat are able to combine both rich local knowledge spillovers and international best practice in the design and specifi-cation of innovations; because of the need for face-to-face meetings to achieve many of these exchanges of experien-ce, the geography of innovation is a function of both physical and time proximity.

There is a strong relation between economic performance and equity, poverty and social exclusionThe literature suggests a two-way relationship. On the one hand, economic growth in knowledge intensive sectors helpsto reduce poverty: new jobs are created in personal services, hotel and catering industry and retail, which often requirelow educational qualifications. Many cities, from this perspective, increasingly regard economic development policy askey instrument to reduce poverty and inequality. On the other hand, reducing inequality, poverty and social exclusion mayalso affect growth. If these issues are neglected or overlooked, on the long run, consequences may de dramatic. As Halland Pfeiffer (2000) put it, “a city that prospers economically but fails to distribute the wealth with some degree of equityruns the clear risk that it disintegrates into civil war between the haves and have-nots, a war in which both sides arelosers”. The challenge will not simply be to redistribute money from the rich to the poor, but rather “reinstating them (thesocially excluded) into the mainstream social fabric”.

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3 Framework of reference3.1 Introduction

How can we judge the position of urban regions in the knowledge economy? To be able to answer that question we havedeveloped a framework of analysis, in which we make a distinction between knowledge foundations and knowledge acti-vities. See figure 3.1.

Figure 3.1 Assessing cities in the knowledge economy: a frame of analysis

3.2 Knowledge foundations

The house has seven foundations. Together, they constitute the overall point of departure for a city in the knowledgeeconomy. We’ll discuss them below.

1. Knowledge base: The first foundation stone for a knowledge city is its knowledge base. This includes tacit knowled-ge, codified knowledge and knowledge infrastructure. The quality, quantity and diversity of the universities, other edu-cation institutes and R&D activities determine for a large extent the starting position of a city in the knowledge econ-omy. Moreover, a city can also have a kind of creative knowledge base. Florida (2002) refers in this respect to thepresence of a class of creative people who write software, songs and stories, create designs and discover new waysto combine elements.

Foundations of theKnowledge city

Activities of theKnowledge city

Organisingcapacity

3 Quality of life

4 Accessibility

5 Urban diversity

6 Urban scale

7 Social equity

1Knowledge base

2Economic base

AAttractingknowledge

workers

BCreating

knowledge

CApplying

knowledge

DDeveloping

Growth clusters

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2. Economic base: The second foundation stone, the economic base, determines for a large part the economic possi-bilities and restrictions, but also the difficulties for an urban region, within the knowledge economy. Urban regionswith an economy dominated by service activities often have a better starting position in the knowledge economy thanthose specialised in traditional manufacturing and port industries. Moreover, cities with a diversified economy are lessvulnerable in rapidly changing economic circumstances. Urban economies depending on one economic sector canbe confronted with huge socio-economic problems when its competitive position is weakening. Besides, cities witha diversified economy can become incubation places for new developments and economic innovation.

3. Quality of life: Quality of life is a key determinant to attract and retain knowledge workers. Important in this respectare an attractively built environment, high-quality houses, attractive city parks, attractive natural surroundings, and arich variety of cultural institutions. Moreover, there have to be good facilities, such as high quality hospitals and (inter-national) schools. Besides, to generate a good urban quality of life, traffic systems —such as highways and airports—should not generate too much air- and noise pollution.

4. Accessibility: The knowledge economy is a networked economy. A good international, regional and multimodalaccessibility is therefore crucial for successful knowledge cities. They have to have good and fast access to interna-tional airports and High-Speed-Train stations, but also good regional linkages to other urban knowledge centres (inparticular by rail and road), and an efficient local infrastructure network to accommodate face-to-face contacts. Natu-rally, knowledge cities have to have high-quality electronic infrastructure for vast and swift global communication.

5. Urban diversity: Urban diversity promotes creativity. Several empirical studies found that diversity fosters growth incities (Glaeser et al., 1992) or at least in their most innovative sectors. Looking more directly at innovation is has beenshows that diversity fosters innovation in cities, while narrow specialisation hinders it. Urban diversity is on the onehand a source of economic opportunities, but on the other hand it can be a source of problems because tensionsbetween groups of inhabitants may arise.

6. Urban scale: Knowledge intensive activities take place in particular in medium-large and large cities. For in largercities there are more scale economies for knowledge activities, there is a larger market for specialised services andthere is a larger common pool of knowledge workers. Moreover, larger cities normally have better international trans-port infrastructure, offer scope for international subcultures and all kinds of international amenities. Besides, creativeworkers prefer inspiring cities with a thriving cultural life, and international orientation and high levels of diversity. Lar-ger metropolitan areas are much more likely to attract these types of workers than remoter, smaller places. Smaller-sized cities located in or close by (and well connected to) relatively large metropolitan areas can benefit from the men-tioned scale advantages and can thus also play a role in the knowledge economy.

7. Social equity: In order to aim for sustainable urban growth it is important to reduce poverty and inequality. This is con-sidered to be a fundamental precondition for cities to prevent tensions between ‘haves’ and ‘have-nots’ and betweendifferent ethnic groups. Such tensions may have an impact on the safety perception of urban inhabitants, workersand visitors. Urban safety has become a basic precondition for urban economic growth. Or, to put it negatively, inse-curity, caused by whatever factors, seriously can hamper it. Increasingly, the perceived safety of a place is becomingan important location factor for companies and citizens (van den Berg, Pol and van Winden, 2002).

It is important to stress that the seven foundations do not all have the same weight. The knowledge base and econom-ic base can be considered as fundamentals: Cities without sound scores in these fields will find it very difficult to suc-cessfully build up and maintain a knowledge economy. The other 5 factors can be characterized as supportive: they addextra strength to the fundamentals.

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3.3 Activities of a knowledge city

What can cities do to become stronger in the knowledge economy? We make a distinction between four types of ‘know-ledge activities’:

• Promote the creation of new knowledge. This can be pure scientific knowledge, but also other types of knowledge

• Promote the application of knowledge. This refers to the transfer of scientific/academic knowledge to business, and,more in general, to the co-operation between the knowledge infrastructure and the business sector

• Attract knowledge workers. Here, we look at the cities’ ability and efforts to attract and retain highly educated peo-ple, students, but also workers in the creative industries

• Develop new growth clusters. This refers to the cities’ ability and efforts to attract develop new economic activitiesto broaden the economic base or to increase the knowledge-intensity of the existing base.

Before treating the different activities individually, it is important to see their interrelations, and the link with the founda-tions of the knowledge economy. In figure 3.2, these relations are schematically represented.

Figure 3.2 Knowledge activities of cities

In the picture, the knowledge activities are linked to the two key economic foundations: knowledge activities change theknowledge base and the economic base of a city. The four knowledge activities are in the centre of the picture, in thegrey box. The last category —creating new growth clusters— is a function of the others. For the creation and develop-ment of a growth cluster, all the other activities are relevant.

Creating new knowledge

Attracting knowledge workers

Applying new knowledge

Creating new growth clusters

Existing economic base

Existing knowledge base

New knowledge base

New economic base

Knowledge activities

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3.4 The role of organising capacity

As can be seen in figure 3.1, to develop one or more knowledge activities, there has to be sufficient organising capacitywithin an urban region. Organising capacity is understood as the ability of those responsible for solving a problem to con-vene all concerned partners (public and private, internal and external), in order to jointly generate new ideas and formu-late and implement a policy that responds to fundamental developments and creates conditions for sustainable econ-omic growth. Organising capacity refers to the entire process from the identification of certain needs, through thedevelopment of strategies and policy, to the implementation of the policy and the monitoring of the results (van den Berg,Braun and van der Meer, 1997). Key tools for organising capacity are vision, strategic networks, leadership, political sup-port, societal support and communication. As the knowledge economy is a network economy, investing in strategic net-works appears to be crucial for knowledge cities.

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4 Towards a typology of cities4.1 Introduction

When we look at the frame of reference and apply it to a number of cities, it is evident that cities ‘score’ very differently.Based on a number of case studies, we have taken up the challenge to draw up a typology of cities. It is important tostress that this typology is very tentative, and open to discussion: there are other ways to classify cities as well. Never-theless, making a typology can be helpful to structure our thinking about development paths of different sorts of places.

In our typology (see figure 4.1), each type has typical characteristics in terms of the frame of reference discussed above.As can be seen, the types are separated in two broad categories: Metropolitan and non-metropolitan cities.

Figure 4.1 Typology of cities

It is difficult to unambiguously define the terms ‘metropolitan’ and ‘non-metropolitan’: they easily give rise to confusion.Commonly, in North Western Europe, the regions of London, Paris and the Rhine-Ruhr area are regarded as metropoli-tan polycentric regions. In our case, the term ‘metropolitan’ refers to the size of the labour market and its cultural diver-sity. Thus, they may be big cities like Munich, but also smaller cities that are part of a polycentric urban system, such asLeiden (part of the Randstad area). Non-metropolitan urban regions are smaller in terms of their labour market, they lesscultural diversity, and are more ‘stand-alone’.

Metropolitan cities tend to have a high score concerning a number of ‘foundations’ relevant for the knowledge economy.They have a high level of accessibility (international airport, HST connections): they are linked up globally. They tend tohave a large and diversified knowledge base (universities etc), and a big and diverse labor market; they show high levelsof diversity: Many cultural amenities, population groups, and they have an international infrastructure (schools, clubs etc)which makes it easier to attract talent from abroad. Within this category, we discern three sub-categories: ‘KnowledgeStars’, ‘Metropoles in transition’, and ‘Knowledge Pearls’. Each of them exhibits some specificity that will be elaboratedbelow.

The non-metropolitan urban regions are of a smaller scale and are not located very near a major city. In many cases, theyhave a function as provincial centre or regional capital. In terms of our foundations, this can bring some disadvantages:they lack fast international connections; they have a relatively small (although sometimes rather specialized) labor mar-ket, a lack of access to metropolitan amenities and international infrastructures. As their economies are smaller and less

Metropolitan Non-metropolitan

Knowledge Stars

Metropoles in transition

Knowledge Pearls

Star Technotowns

Technotowns in transition

University Towns

(Non-university towns)

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diversified, they have less of a climate that is conducive for ‘new combinations’. On the other hand, these cities typical-ly offer a quiet and green atmosphere, they have low levels of congestion and crime, and relatively low costs of living.Also, there is a strong local community and identity. Typically, the organising capacity of these regions is strong. Leadersfrom business, academia and local government tend to know one another well, and are able and ready to act jointly forthe benefit of the region.

Within this category, there are large differences. Therefore, four subcategories are discerned: ‘Star Technotowns’, ‘Tech-notowns in Transition’, ‘University Towns’ and ‘non-university towns’. In this paper, we will leave the latter category aside.

The two broad categories, metropolitan and non-metropolitan, should not be seen in isolation. There is an increasing inte-rest in promoting polycentric linkages between cities. It is now increasingly recognised that there is a need to developpolycentric alliances to allow medium-sized cities to compete with existing world cities, and allowing them to ‘plug-in’ tothe potentials afforded by the global economy. In light of this, developing mechanisms to guide the implementation ofthe global gateways concept and to develop polycentric alliances represents an important priority. The challenge forsmall- and medium-sized cities is to develop complementary specialisms and niches which, in combination, can help toconfront the ascendancy of the major global cities. In this respect, there is a growing recognition that competitiveness inmodern knowledge-based economies depends on certain key assets which ‘cluster’ in and around major cities andmetropolitan areas.

4.2 Knowledge Stars

Examples of Knowledge Stars are Amsterdam, Munich, Helsinki, Stockholm, Dublin. These are large cities with strongknowledge foundations. They are endowed with a strong and diversified economy, and a strong knowledge base. Impor-tantly, they do not suffer from an economic legacy of heavy industries or other declining sectors. Typically, these cities haveseveral universities that offer the full range of disciplines. They are well-connected through airports and HST links. Theyare a natural magnet for talent: their economy, universities and metropolitan ambiance are assets that attract people;foreigners feel at home because of the diversity and international infrastructure. These cities have relatively high shares ofhighly skilled immigrants. They offer innovative milieus: the application of university research findings is more easily giventhe strong private sector in these cities, and, more in general, the sheer diversity of economic, cultural and scientific acti-vities in the city and the high level of openness and connectivity constitute a fertile ground for innovations of all kind. Thestrong knowledge foundations of these cities are reflected in their performance: in the last decade, they have performedvery well in terms of GDP/capita, unemployment rates and education levels of the population. In terms of policies, thesecities generally try to create conditions to accommodate growth. Compared to the ‘metropoles in transition’ (see next sub-section) they put less stress on pro-active policies to attract new industries or develop new growth clusters: their ‘natural’attractiveness reduces the need for such policies. However, they try to keep categories of workers in the city: for teachers,nurses or policemen, these cities are relatively expensive places as their salaries are determined on a national level. Theydo so by subsidizing student housing, creating specific housing projects for public servants.

Example of a knowledge star: MunichThe foundations of Munich’s knowledge economy are very solid. After the Second World War, the city benefited stron-gly from the in-migration of large companies and talented people from Eastern Germany. During the 1960s and 1970s,with the help of strong and persistent regional policies, Upper Bavaria has developed into one of the strongest know-ledge regions of Europe. Munich, as the regional capital, drew most of the benefits and is the flagship of Bavaria’ssuccess. Munich has a very high score on almost all the foundation indicators. Its knowledge base is very strong bymany degrees: the city has a high percentage of workers with high qualifications, and hosts an impressive share ofknowledge-intensive companies and knowledge institutes. The economic base is highly diversified: the Munich Mix

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comprises many growth sectors and few declining industries. The quality of life is high in many respects, with all thehigh-level amenities in the city and the mountains and lakes nearby. The other side of the coin is the high cost of livingin the city. Accessibility is rather good. Munich is excellently linked with the rest of the world through its airport, a goodrailway and highway connection and an efficient urban public transport system. The urban scale of Munich is largeenough to support a highly specialised labour market and many high-level amenities that in turn attract talent andcompanies. Social problems are very moderate, especially compared to most European major cities. As the weakestpoint of Munich, we detect the urban diversity. In particular, the city does not have many experimental artist and under-ground scenes, which negatively impacts the liveliness and ‘metropolitan’ atmosphere and cultural creativity of thecity. The weak development of these sectors is a result of Munich’s image as an ‘economic’ city, but also related toits very high costs of living, which drives artistic talent to other cities, notably to Berlin. However, this weak point is oflimited importance for the knowledge base in means of economic and natural science, it is more related to the finearts and the image of a city which wants to attract researchers. More important could be a possible development inthe future. There is a slight tendency in the production sector leaving the city, just out of the city borders because ofthe expensive premises in Munich or leaving the region altogether. This development might cave the linkage betweenresearch and production in the long run, so that the city also might loose its research reputation.

In accordance with our framework of reference, we have considered four types of activities of a knowledge city. Alsohere, it is clear that Munich scores quite high. The city is strong in creating new knowledge, in applying knowledge forcommercial purposes, and in developing new growth clusters. For this, the city owes much to the Freestate of Bava-ria’s strong and sustained efforts to invest in science, higher education, knowledge transfer and start-ups, as this casestudy shows. Also, the Freestate’s targeted policies to boost certain high-level growth clusters have benefited Munich,witness the media cluster and biotech clusters that emerged in the 1990s and made the ‘Munich Mix’ stronger.

In the last decades, Munich’s economic success has attracted knowledge workers to the city, who further contribu-ted to its performance. However, some things can be improved in this respect with careful policies. For instance, thecity could do more to attract (foreign) students. The city management can make a contribution by supplying adequa-te housing, but also more indirectly by urging the universities to become more outward-looking. As important as it isto get innovation and to create a creative climate by integrating foreign students and researchers it is as important tokeep high qualified students and researchers in the city and stop the migration to other cities of knowledge. In thisaspect the city image, the research conditions and the quality of life in a city are the essential assets, which can atleast partly be influenced by a city strategy. An attractive city for students, offering good housing conditions mightattract new talent.

4.3 Metropoles in transition

Examples are Dortmund, Manchester, and Rotterdam. These cities are big, they have an urban atmosphere with manyurban amenities, and they are well accessible and connected to international transport systems. They share the problemof having traditional manufacturing sectors that are in decline or that strongly declined in the last decades. Those citieshave relatively large problems of unemployment and social exclusion, and relatively large migrant communities that arelow skilled. Attracting talent (highly skilled) is a problem for these cities. They tend to suffer from a ‘working class’ image,and negative perceptions concerning pollution and crime; they have a relatively poor quality housing stock (former wor-king class neighborhoods), and less cultural amenities than the Knowledge Stars. In these cities, the developmenttowards a knowledge economy produces more of a dual economy compared to the Knowledge Stars: on the one hand,large parts of the population are insufficiently skilled to match the changing needs of the firms. On the other, such citiesare very active to develop new growth sectors (creative industries in Manchester, high tech industries in Dortmund, bus-iness services in Rotterdam) that employ higher skilled, often with success.

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Many of these cities have good universities, but they lose talent to booming capital regions. In terms of policies, thesecities are very active. They try very hard to develop new economic growth clusters, to compensate for the loss of econ-omic activity in declining sectors. Examples are Rotterdam (AV sector), Manchester (creative industries, ICT sector).However, despite strong policy efforts, they are less successful in this respect than the ‘stars’. Also, they try to changetheir image, and try to upgrade their housing stock by encouraging the construction of more expensive dwellings. Inte-restingly, our research suggests that these cities are ‘early movers’ when it comes to the development of intergated‘knowledge economy strategies’.

In most cases, the performance in terms of GDP growth per capita and unemployment is less than that of the ‘know-ledge stars’, with positive exceptions and notable successes in some sectors. However, these cities play in a differentleague, and their performance should be judged accordingly.

Example: ManchesterThe city of Manchester is the regional capital and commercial, educational, medical and cultural centre of England’sNorth West region, the second largest economic region in the United Kingdom (UK) after London. The city has a popu-lation of about 440 thousand people, and the metropolitan sub-region (Greater Manchester) has more than 2.5 millioninhabitants (year 2000).

The knowledge base of the Manchester region is considered to be very good. There are four universities and severalother high-performing education institutions. These HEIs have differing specialities: varying from science to a voca-tional focus. Due to a reduction in the availability of decreasing public funds, the HEIs are starting to adopt a moremarket-oriented approach, which is desirable for a city that wants to stimulate stronger relationships between know-ledge institutions, businesses and local communities.

Manchester has a rich manufacturing past, which on the one hand has been a breeding ground for high-tech manu-facturing activities; but on the other hand, the legacy of the manufacturing past has contributed towards the signifi-cant job losses over the last decades: the city lost 207,000 jobs between 1972 and 1984. The economic base of thecity is growing in strength but there are still relatively high unemployment levels. The city has a vibrant cultural sector,helping to boost new economic activities. Significantly, the knowledge institutions have been modern job generators:the universities are now amongst the largest employers in Manchester.

Manchester had a relatively bad image as an unsafe and unattractive city. However, the quality of life as well as theimage of Manchester as a place to live and work in have improved substantially in the last decade. Regeneration ini-tiatives, for example in the city centre, Hulme and East Manchester, have contributed to the development of a moreattractive city and a better image. Now, the city centre functions as a magnet for young urban professionals. Con-nectivity and accessibility are considered to be essential for attracting knowledge activities. These aspects of Man-chester are judged as being good, but some elements could be improved. The growing international airport ensuresthe international connectivity and greatly enhances the attractiveness of the region as a location for business andinvestment.

Manchester also has a rich urban diversity. The large variety within the built-up area, the urban activities and the inha-bitants helps to make the urban region attractive in the knowledge economy. The urban scale of Manchester is con-sidered to be good for competing successfully with other knowledge cities. As a non-capital city, it has to develop aseries of competitive advantages in specific niche markets. It is however still unclear which niches these should be.Currently, there are relatively wide skills and wealth imbalances between resident communities. This could be a thre-at for the development of the city as a balanced knowledge city. This is acknowledged by the actors involved in poli-

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cy making. The economic and social regeneration of deprived areas plays a central role in the Knowledge Capital ini-tiative. The idea is that all areas should benefit from new economic opportunities in order to successfully function ina competitive knowledge economy.

The dramatic growth of residents in the city centre appears to illustrate the start of a successful transition process inManchester. Within one decade, the number of residents within the city centre grew with more than a factor 6! Thelarge number of building activities and the high prices for housing evidence the expectation of further residentialgrowth in the city centre. Many of the new residents in the city centre work in knowledge-intensive activities. A largepart of them studied at one of the Manchester HEIs. In the past, most of the graduates left Manchester because of alack of high-grade jobs. Though there is still a shortage, the situation has improved. The founding and attraction ofadditional knowledge-intensive businesses and job opportunities seem to be the most urgent activity required to retainknowledge workers. The capacity ‘to attract and retain knowledge workers’ can therefore be judged as good, butimprovements are required.

Relationships between knowledge institutions and larger companies could be improved for mutual benefits. However,the large companies seem to be reluctant in this respect; they seem to prefer to keep their knowledge developmentin-house.

Promising ‘growth clusters’ for Manchester appear to be health, sports, culture and media, and high-tech manufac-turing. For the health and high-tech manufacturing sectors high-grade knowledge is required. To this end, Manchestershould benefit from the merger of two universities, the UM and the UMIST.

4.4 Knowledge Pearls

These are smaller cities with a strong knowledge base, that are part of metropolitan networks: they are located very neara major city, which implies that they enjoy the benefits of the nearby metropolis (its amenities, facilities, an internationalairport, a big labour market), without having its problems (congestion, pollution, crime). Examples of this breed areLeuven (near Brussels), Leiden (at a central position in the Randstad region), Oxford and Cambridge (close to London).Typically, these cities have renowned universities that dominate the city and in fact constitute much of its image. Thoseuniversities attract top scientists and students from everywhere, and often develop centers of excellence of world repu-tation. These centers, in turn, attract private research institutes and companies to the cities. Those cities do not havelarge problems of social exclusion. But there often is a cultural gap between the academic community and the rest of thepopulation.

These cities have shown very good performance indicators, in terms of GDP per capita development and unemploymentand % of higher skilled population. The fact that those cities are part of a wider metropolitan network is decisive: it com-pensates for crucial scale disadvantages. This is the fundamental difference with the more provincial university cities thatwill be discussed later.

Example of a Knowledge Pearl: LeuvenLeuven is situated in Flanders, Belgium, some 30 Km to the east of Brussels. The city counts 90,000 inhabitants,among which 33,000 students, and it has a famous university. Leuven is relatively rich, with a median income of€ 20,372, which is the highest of all the cities in Flanders. Real estate prices are relatively high and rising. The city hasrelatively many innovative companies. They are concentrated in a couple of specific technology sectors: Life scien-ces, feed-food-health, mechatronics, telematics, e-security and microelectronics/nanotechnology. Also, the city hasestablishments of multinationals that perform R&D in Leuven: Philips, Tyco Raychem, and ARM. The knowledge base

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is extremely well developed: the region has strong research institutes, both public and private. The most importantone is IMEC, the Flanders independent research centre in microelectronics, nanotechnology and related technologies.IMEC is very important for the regional economy. It works as a magnet for specialised high-tech companies that wantto be located in the vicinity of the centre. Concerning urban scale, the city itself is small, but when one considers it asa part of the larger Brussels agglomeration, the cities’ small scale does not form an impediment for its development.It is very near to Brussels International Airport and benefits from the metropolitan amenities of Europe’s capital. Tech-nology transfer from universities and research institutes to the private sector is very well developed, and there aremany high-tech spin-outs from the university and other research institutes. There is a strong institutional frameworkto support these interactions.

4.5 Star Technotowns

Examples are Eindhoven and Oulu. These cities have a technical university of high quality, and also can boast a strongprivate technology sector. The cities are relatively small but specialised. Typical for these cities is the excellent co-ope-ration between business and university: personal and institutional networks are very dense, there is a shared feeling oflocal pride and identity, and key actors are willing to embark on projects for the benefit of the city. Big corporations playan important role (Philips in Eindhoven, Nokia in Oulu): they have many international connections that they ‘feed into’ theregion, they put high demands on the local knowledge base, they are an important source of spin-out companies, andthey attract suppliers. For the university they are a valuable partner for internships, professorships and contract research.These cities tend do very well in their niche, and they manage to attract engineers also from outside the region or evenabroad. Their specialization is their strength, but also their weakness: these cities are very vulnerable to the volatility ofthe high-tech sector, and, more specifically, to the performance of the leading company. Also, globalization puts pres-sure on these cities: To remain ‘top’ in certain technology fields, even more specialization might be needed. Co-opera-tion with other cities and universities many help in this respect, and can also compensate for scale disadvantages.These cities manage to attract engineers, but they have more problems to attract other parts of the ‘creative class’ suchas artists, marketeers, designers etc. Some cities (Eindhoven is one) see this as a problem, as new product developmentincreasingly asks for innovative combinations of ‘hard’ technology and soft aspects (design, marketing). To develop theirsoft side, some technotowns pursue policies to attract this complementary breed of knowledge workers. Among otherthings, they do so by investing in culture and leisure facilities.

Example of a star technotown: EindhovenAt the beginning of the 20th century, the city of Eindhoven was no more than a small agricultural town, with some5,000 inhabitants. The foundation of Philips Gloeilampen N.V. in 1891 marked the beginning of the rapid developmentof the city (Adang and van Oorschot, 1996). Nowadays, Eindhoven is the fifth city of the Netherlands with 206,000inhabitants (2003). It forms the centre of the region of South-East Brabant, which is often referred to as the GreaterEindhoven Area, or the ‘Eindhoven region’ (some 670,000 inhabitants). It has a strong technological profile, and hostsworld leading high-tech firms such as Philips and ASML. The knowledge base of the region is good. There are impor-tant public and private research institutes within the region, such as the Technical University of Eindhoven and TNO-industry. Moreover, 50% of the total Dutch R&D expenditure is made within the region. There are three large privatecompanies in the wider region which invest relatively much in R&D (Philips, Océ and DSM). Philips scores very goodin terms of generated patents. The Technical University of Eindhoven ranks third in the impact score of publications,after Cambridge and Oxford. The cooperation of the three Dutch technical universities might strengthen their interna-tional knowledge-creating role.

The economic base is valued is strong but specialized: by many, it is considered to be too vulnerable as the regulareconomic downturns showed. Technology development is seen as a strategic, competitive advantage but it should

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be applied within a larger number and variety of economic sectors. Quality of life is valued as moderate. On the onehand, Eindhoven does not have a metropolitan and international atmosphere and there is a lack of attractive facilitiesfor (young) knowledge workers. On the other hand, in the last decade, many new urban facilities have been added andthe city possesses attractive (natural) surroundings. The accessibility of the urban region is an issue of concern.Although there is a growing regional airport, there are few rail connections to international hubs (airports and HST-sta-tions). The urban diversity is valued as moderate. About one fifth of the working population is from foreign descent.More than half of them are from western countries; most of them are assumed to be knowledge workers. However,Eindhoven still lacks a real international community. One of the policy spearheads in this respect is to set up an inten-sive cooperation with two other tech cities, namely Aachen en Leuven. Social equity is considered to be good. Unem-ployment is relatively low and the number of low-income households is below the Dutch average.

The Eindhoven region has a gravitational pull on (technical) knowledge workers, but there are concerns that this willbe insufficient in the near future. This can be explained on the one hand by the (local) lack of metropolitan attractive-ness (quality of life), and on the other hand by the (national) shortcomings in education. It was argued that educationhas to be seen much more as an strategic investment for the position of the Netherlands within the knowledge econ-omy. Consequently, the government should invest more in education, or give the education institutes more freedomto do this themselves. There are major concerns about the attractiveness of technical education for new students. Thisis a nationwide problem, but actions can be taken on a regional scale; for instance by promotion activities in the NewEvoluon. Positive is the education in design. This will attract a broader variety of students (besides technical studentsalso arts students) and can help to change the image of Eindhoven and of the technical education.

In Eindhoven there is a positive atmosphere to cooperate. There is a large solidarity feeling for the region and key sta-keholders —they know each other very well— are often willing to support regional initiatives. One of the spearheadsof the Eindhoven’s policy is to apply technical knowledge within more economic sectors. This has to contribute to abroadening of the economic base. Much is expected in this respect from combining technology with health-care,sports and design. Promising new institutes for applying knowledge are the Embedded Systems Institute and thePolymer Institute.

4.6 Technotowns in transition

These cities are similar in many respects to the ‘star technotowns’. One crucial difference is the economic base. Tech-notowns in transition have a much weaker economic base, either because of a legacy of declining industries, or becau-se of an absence of an ‘engine firm’. Examples are Enschede and Aachen (elaborated in the boxes below). These citiestend to have relatively high unemployment rates and high levels of social exclusion. These cities attract students to theiruniversities, but have difficulty to retain talent because of the weaker economic base. For these cities, the (technical) uni-versity is the key asset for urban development. Urban policies typically very actively support start-ups from the universi-ty, and encourage university business co-operation of all kinds.

AachenAachen is a medium size town (248,000 inhabitants) close to the border of Belgium and The Netherlands. Until the1970s, the urban economy used to be characterized by heavy industries in the surrounding counties, for which thecity was the ‘office desk’ and the service center alike: coal mining, steel production, and textile industries.

The decline of these industries put Aachen into the same situation as the Ruhr valley region and all neighbouring pro-vinces of Belgium and the Netherlands. In the late seventies, a regional restructuring policy was set up which accom-panied the demolition of 38,000 jobs in the mining industry and helped to build up new industries, of which the most

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important are automotive, ICT, Life Sciences and innovative materials. During the last 10 years, the focus in industri-al development in the region was clearly on rationalizing. Therefore, the new industries in the region can not beconsidered as ‘job-creating engines’, like some politicians had hoped for. Aachen’s R&D-landscape and most of thecompanies are steered by engineers with a dominant technological background. As a result, some vital aspects ofentrepreneurship, e.g. the human resources development or the management of change, are not so much implemen-ted in the region as one might expect.Many of the new activities bear a relation with the cities’ very strong knowledge base. The RWTH is the largest tech-nical university in Europe, with 414 professors, 260 research institutes, 696 doctorate degrees per year, 2,458 gradu-ates per year (engineers and other examinations) and a total of 26,642 students. The University of Applied Sciences(Fachhochschule Aachen) has 200 professors, 8,000 students and 850 graduates per year (mostly engineers); strongpoints are civil engineering and mechanical engineering.The research centre Jülich (Forschungszentrum Jülich), at35 km distance from Aachen is also worth mentioning. It has a scientific staff of 1,100 and a total of 4,200 employ-ees. Furthermore, a remarkable number of big private R & D- institutes is active in Aachen and the region. The regionis strong when it comes to networking of industries and research institutes.

Knowledge workers like the urban region very much because of its charm, surrounding landscape, cross-border lei-sure opportunities (shop in Maastricht, diner in the Wallony, golf in Belgian Limburg etc.), peaceful provincial securitysituation and very good educational opportunities for native children (not for ex-pats, because of the lack of an inter-national community). Housing is relatively inexpensive; wages are somewhat lower as in the bigger German cities;costs of living are lower.

As the wages for qualified academic professionals are lower than in other parts of the country, Aachen loses highlyeducated workers in times of economic prosperity. For the quality of life, however, and for emotional reasons (the cityis very much praised by its inhabitants for its charm and atmosphere), people like to stay as long as possible. In timesof economic decrease, qualified professionals tend more to move away, if jobs are available in other regions; Aachenhas lost some labor to the R&D region of Munich during the last years.

The Aachen region strongly bets on start-ups as source of new jobs: 13 innovation centers make it easy for youngprofessionals to build up companies and create new jobs. Several initiatives between municipality, agencies, cham-bers and other institutions have taken place during the last 15 years to encourage start-ups in the region and to faci-litate the transformation of knowledge into business. The latest one is AC2, ‘the Aachen growth initiative’, which con-centrated in 2003 on the build-up of a coaching-network for 23 new companies.

It is important to note that the emphasis on ‘new economy’ with its demand on high-qualified labour and the unabili-ty of substituting jobs in the ‘old economy’ contributes to a social segregation between the ‘happy few’ (academicprofessionals) and the ‘have nots’ (qualified and non-qualified workers, especially among the foreign population). Soci-al contrasts have the tendency to become sharper. The acquisition of low-qualification businesses (like logistic cen-ters, fulfillment companies and the like) has been neglected.

EnschedeThe city of Enschede has 153,000 inhabitants and is situated on the eastern border of the Netherlands. It is part ofthe Twente region and is located within the province of Overijssel. The functional urban region consists of the citiesEnschede, Hengelo, Almelo and Borne; together they form ‘Netwerkstad Twente’ (Network City Twente) comprising250,000 inhabitants. Enschede is known for its industrial past as a textile producing city and also has a reputation forits printing activities. The wider region is quite a green area.

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The textile industry has declined dramatically in the last decades, causing social disruption and high levels of unem-ployment in the city. Nowadays, Enschede’s economy is dominated by (retail) trade, business services, construction,education institutes and health & care services. In the field of knowledge-intensive activities, Enschede is especiallystrong in ICT (in combination with healthcare). The GDP per capita in Twente is structurally somewhat below the natio-nal average. Enschede has a rather good knowledge base, especially in the technological field. The University ofTwente (UT) is one of three technical universities in the Netherlands and has about 6,600 students. Enschede housesa multitude of knowledge and R&D institutes, and also private R&D is present in the Twente region: Lucent Technolo-gies (Bell Labs), Agere Systems, LogicaCMG, Texas Instruments (The Twente Region, 2004). The city suffers form itslack of scale: this makes it more difficult to attract knowledge workers. Active policies are in place to promote the cityas an attractive location. Also, to create scale, the city intensively co-operates with neighboring Dutch cities in theregion, and with Münster across the German border. Another weak point of Enschede is the international accessibili-ty: it is not a node on a high speed rail network, and international airports are relatively far away. The city considersits university as a crucial asset. It invests heavily in start-up support infrastructures, promotes business-university co-operation and creates conditions for high-tech firms.

4.7 University towns

Typical for these towns is that they are dominated by a big ‘general’ university. Typically, the student population makesup a large part of the city, and the amenities in the cities are highly geared towards their needs and preferences. Theeconomic structure of these cities is diverse. Normally, they don’t have such a strong technology-bias compared to theformer two types. Münster is a good example of this city-type. One problem for these cities is how to ‘capitalize’ on theirknowledge base. Students come to the city during their study period, but leave after graduation because there are sofew jobs. Levels of interaction between university research teams and local business are relatively low because theindustrial basis in the city is relatively small.

Example of a university city: MünsterThe city of Münster has approximately 280,000 inhabitants and is located in the north of the German region of North-Rhine Westphalia (NRW) near the border with the Netherlands. Münster is a town that is characterised by its big uni-versity and high number of students. Furthermore, Münster is known as a city of civil servants and law institutions.The foundations of Münster’s knowledge economy are quite strong. The knowledge base is strong: Münster has oneof the biggest universities in Germany and also one of the biggest German polytechnics. Besides, several researchinstitutes are present in the city: mostly in the fields of medicine and biotechnology. The economic base is highly orien-ted towards services; Münster has very few declining sectors. The number of big private firms is rather limited; espe-cially in industrial sectors (like manufacturing), the region only houses a few companies. The GDP per capita is highcompared to the state average and other European cities. The low number of high-grade industrial firms in Münster isa disadvantage. The quality of life is high in many respects: Münster is a relatively green and safe city and has manybars and restaurants because of the student population. The city, however, is not very well-known abroad and lacksan extensive dynamic and vibrant cultural climate. Accessibility is good in the Münster region: little traffic congestion,excellent cycling facilities and an appropriate public transport system. External accessibility by train is good, but thenumber and range of flights at the international airport is rather limited presently. Urban diversity is moderate in Mün-ster: about 9% of the population and the university students are from foreign origin. The urban economy diversity ismoderately positive; the city image is rather conservative and cautious. The urban scale of Münster is quite small com-pared to other German and European cities. A drawback of this small scale is the small labour market: many peopleleave Münster because they cannot find an appropriate job. Because of the small urban scale, the importance of coo-perating with companies from other places is important for the city. Social equity is good: the percentage of unem-ployment is low. However: relatively many foreign citizens are unemployed.

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The city is rather successful in attracting both German and foreign students. Retaining graduated students is hardsince the Münster economy offers only few jobs. Also, the universities and several research institutes attract a multi-tude of good knowledge workers, but sometimes it’s hard to retain them because it is often not so easy for their part-ners to find suitable jobs. The application of knowledge by private firms is quite limited in Münster, because the cityhas few big companies. Yet, the number of institutions in the field of stimulating the appliance of knowledge is exten-sive. Many of these organisations are supported by the state of NRW and the municipality. These intermediary insti-tutes support SMEs that are developing various state-of-the-art products, particularly in the field of biotechnology(including nanotechnology and biomedicine). It will take several years before these companies might eventually beco-me large. Concerning cluster development, Münster is very much focussed on biotechnology. The activities in this fieldare not dominated by certain cluster engines, since Münster lacks big firms in biotechnology. The biotech activitiesare concentrated in the university, research institutes and SMEs that are mostly university spin-offs. Besides biotech,the city also has a strong base in ICT which consists of the big faculty of mathematics & informatics at the university(WWU). Similarly to biotechnology, the ICT sector is dominated by SMEs. ICT activities in Münster might be streng-thened by increasing entrepreneurship.

Considering the knowledge economy foundations and activities, Münster seems to be in a rather good position.However, there are some points of attention that the city has to assess and/or keep in mind in order to successfullydevelop further towards a knowledge economy: First, the university occasionally seems to be at some distance fromthe city in a psychological way. Second, the city of Münster is not very well known abroad. By increasing the morevibrant aspects of the quality of life (the artists’ scene, more extensive night life etc) the publicity abroad can increa-se: this could help in attracting more foreign students and knowledge workers. The bid of Münster to become theEuropean Cultural Capital of 2010 can help to spur such activities. Whether or not the city wins the contest, it should-n’t keep Münster from strongly stimulating vibrant cultural places and events. Münster also has to increase its visibi-lity for firms from other places: both from abroad and from other parts of Germany. Third, the urban scale of Münsteris rather small and therefore it’s key to extend this scale by enhancing ties with firms and institutes from other placesand perhaps trying to attract some big firms to the region. The recently presented city marketing plan can help con-tribute to this aspect.It should be noted that the organising capacity in Münster is rather well developed: various municipal policies are pro-active (e.g. the city marketing approach and the way the city is involved in the development of CeNTech) and the net-works between the municipality, companies and the university are solid.

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Metropolitan Typical foundations Typical activities Perspective

Knowledge stars Strong and diversified economy High levels of new knowledge creation and application Their diversity is a fertile ground for further innovation

(Munich, Amsterdam, Strong and diversified knowledge base Very successful in attracting talent Their ability to attract talent is a crucial asset for further growth

Helsinki) High educational levels Successful growth cluster development Their ‘critical mass’ brings many advantages in the knowledge

High ‘urban’ quality of life Some cities develop policy to keep crucial economy

High levels of diversity jobs (nurses, teachers, policemen etc.) lower-income They face a risk of ‘crowding out’

Good external accessibility in the city

Metropoles in transition Good knowledge base Addressing problems in attracting/retaining talent Through active policies they may overcome their current image

(Manchester, Dortmund, Relatively low educational levels Strong efforts to diversify their economies and develop and quality of life problems

Rotterdam) Weaker economic base new growth industries There are many chances for reinventing industrial traditions

Good external accessibility Strong efforts to improve image and quality of life Their low factor costs and the availability of industrial heritage

Quality of life problems; Low quality offers room for innovation and experimentation

of housing stock An improved link between their knowledge base and economic

Unemployment and social exclusion base can bring further growth

Poor image

Knowledge pearls Excellent knowledge base High levels of knowledge creation and application Their high-quality knowledge base is likely to attract private

(Leuven, Leiden, Oxford, Knowledge-intensive economic base Attract academic talent and high-tech business; business, notably research labs

Cambridge) High quality of life Efforts to improve business-university links University and knowledge institutes offer scope for spin-outs

Good accessibility and new business development

They benefit from advantages of Their high quality of life combined with their position in

nearby metropolis metropolitan networks gives them a head-start in the

Low levels of social exclusion knowledge economy

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Non-metropolitan Typical foundations Typical activities Perspective

Star Technotowns Specialised high-tech knowledge base Cities tend to have very good business-university links Their combination of a strong knowledge base and a strong

(Eindhoven, Oulu) Strong technology-oriented economic They are good at producing technological innovations and new economic base gives them a favorable starting position in the

base, often with dominant company products knowledge economy

Quality of life keywords: Green, They manage to attract engineers, but have difficulties to attract A further elaboration/refinement of their technological focus can

spacious, quiet, non-metropolitan the creative class. Therefore, they invest in culture and leisure bring growth, but specialisation also makes them vulnerable

Relatively poor international connections They successfully develop new clusters built on local economic They may engage in strategic networks with other cities to

and technological competences compensate for scale disadvantages

Technotowns in Specialised high-tech knowledge base There are good business-university links They may create more high-tech employment, but the

transition(Enschede, Unfavorable sector mix with legacy of Much innovation in SMEs challenge is to create jobs for the lower skilled as well

Aachen) ‘old industries’; Economic base They have problems in attracting/keeping talent, especially the Cities face the challenge to create a variety of jobs

dominated by small firms ‘Creative Class’ The combination of high-tech and industrial traditions offers

Some have quality of life and image They manage to develop growth clusters out of excellent opportunities for new niche markets

problems: regeneration challenge research groups There is potential for start-ups from university

Some have relatively poor international They may engage in strategic networks with other cities to

connections compensate for scale disadvantages

University towns Strong knowledge base in big university Ability to attract academic talent, although somewhat hampered Their strong knowledge base is an asset to attract private

(Münster, Groningen) Quality of life keywords: Green, by lack of scale (research) firms and strengthen the economic base

spacious, quiet, non-metropolitan Business-university interaction hampered by lack of They may nurture start-ups from university to develop the

Healthy economic base; Relatively few business partners local economy

high-tech companies, most SMEs. Development of growth clusters out of excellent research groups They may engage in strategic networks with other cities to

Relatively poor international connections compensate for scale disadvantages

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5 Governance issues5.1 Introduction

The last section has shown that there are wide differences between cities concerning their position and perspectives inthe knowledge economy. Our typology, tentative and open to discussion as it is, shows that the problems and opportu-nities vary widely. The question then arises how policy makers can adequately respond to the new challenges. This sec-tion is about the governance of the local knowledge economy, and more specifically, the role of public policy and orga-nising capacity. First, section 5.2 describes which type of policies has an impact on the development of cities in theknowledge economy, and presents a couple of examples. Second, section 5.3 presents a number of problems that arise,notably in the field of policy co-ordination between various government levels. In section 5.4, finally, we describe policymodels and frameworks that are designed to improve the governance of cities in the knowledge economy.

5.2 Policies that have an impact

If we look at the house with its foundations and activities, it is clear that many types of public policy somehow have animpact: See figure 5.1. Here, we will briefly discuss these policies and their impact on the local level.

Figure 5.1 European, national and regional policies with an impact on the urban knowledge economy

CreatingknowledgeApplying

knowledge

DevelopGrowthclusters

Attractingknowledge

workersOrganisingcapacity

Immigration policy

Social policy

Science andeducation policy

Innovation policy

Transport policy Spatial policy

Economic development

policy

4 Accessibility

5 Urban diversity

6 Urban scale

7 Social equity

1Knowledge base

2Economic base

3Quality of life

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Science and education policyEuropean countries spend enormous amounts of money on science and education. In some countries, science and edu-cation policy is designed on the national level (the Netherlands, UK); in others, the regions are the key actors (Belgium,Germany). This type of policy is typically non-spatial. However, it strongly affects cities. Most evidently, it affects theknowledge base of cities. Cities with large or very good universities benefit a lot more from these policies than non-uni-versity cities. For the UK, this is clearly demonstrated in the Lambert Review (an advisory document to the UK govern-ment, Lambert Review of Business University Collaboration, 2003, p.82). In this connection, it recommends not to spendall research money on just a few academic top-centres. Also other universities can play an important role in their region,notably as partner for local business in new product development or applied research.

University policy can also be a means to promote regional economic growth. In The Netherlands, for instance, thegovernment decided to establish universities in regions that were hard hit by economic restructuring. Enschede was oneof those cities, hardly hit by the decline of the textile industry. In Bavaria, the regional government has chosen not tofocus all its resources in Munich but to spread investments in R&D and higher education more evenly across the Bava-rian territory. This has highly benefited the secondary cities in Bavaria.

Education policy affects the educational level of the labour force in cities, and thus has a fundamental impact on thecities’ knowledge foundation. Typically, education policy is organised on the national level (except in federal states).However, educational requirements can be very different in different types of cities. In The Netherlands for instance, thecity of Eindhoven, with its many high-tech companies, would like to see a stronger focus on technical education.

Science and education policy can have a large impact on clusters, as in clusters, a university often plays a key role. Manycountries dedicate specific research funds to academic top centres with a number of links to business.

European programmes play an increasingly important role to create a single European ‘science space’: they encouragejoint research by institutes from different member states into key technological fields. Furthermore, in the Lisbon strate-gy, EU members have set the ambition to spend 3% of GDP on R&D by 2010. Also, the EU financially supports theexchange of students and academic staff.

The ongoing standardisation of European education (as can bee seen in the introduction of the BAMA structure in Euro-pe will further increase student mobility in the European Union and leads to international competition to attract students.This implies that universities and cities will operate in a more competitive environment and need strategies to respondadequately (for a detailed discussion, see Van den Berg and Russo, 2003).

Innovation policyIn most European countries, industrial policy (supporting declining or promising industries) has been replaced by inno-vation policy. The idea behind it is that investments in research and development and innovations have an upward impacton productivity. Many instruments are used: tax breaks for investments in R&D, financial incentives and subsidies for co-operations between firms and universities, the support of industry-university networks, start-up support schemes etc. Insome countries, innovation policy is designed on the national level (the Netherlands, UK); in others, the regions are thekey actors (Belgium, Germany). Start-up policies are normally designed on lower administrative levels. European frame-work programmes encourage transnational innovative co-operations in many different ways.

Increasingly, governments recognise that co-operation between business and universities can yield significant econom-ic benefits. Universities and companies too often are two worlds apart: they have different drivers (academic prestige vs.profit making), they have different time horizons, different work attitudes, and in practise, find it difficult to co-operate.

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However, there are many potential synergies and interdependencies: some knowledge developed at universities is com-mercially very valuable, or may become so in the longer run; university students and researchers are potential entrepre-neurs; universities are the source of new staff for companies; university labs may be used by start-ups; universities maybenefit from applied research assignment from the industry, and vice versa.

It is a general trend in Europe that universities are urged to co-operate more with businesses: they get less direct funding,and have to increase their earnings from co-operations with the industry. This may improve the collaboration. Despite thistrend however, working with the industry is still considered inferior by many (top) researchers. Researchers are still main-ly judged according to their scientific publications. Their careers depend on it, and the allocation of research grants andfunds is also based on the publication track record of researchers. This reduces their willingness to work with the industry.If the aim is to promote university-business co-operation, this incentive structure needs to change. This is something thatcannot be achieved by local governments, but they may join forces and lobby to modify the policies of national govern-ments and research funds. Also, they may erect or support local organisations to stimulate knowledge transfer, or createfunds for local business-university co-operation projects. Many cities and regions are already doing this.

There are large regional variations as to the intensity of business-university education. Part of the explanation can befound in the different structure. In cities with a strong and diversified economy and big firms, co-operation between com-panies and universities/research institutes is easier. In a number of case cities, van den Berg et al. (2004) found that lar-ger and innovative firms are more willing to co-operate with universities than others. This is an advantage for cities witha diverse and innovative economic structure, such as Munich and Helsinki (‘knowledge stars’, in our typology), and alsoEindhoven (‘Star Technotowns’): they form a very natural environment for co-operation. In some other cities (i.e. Münster,Zaragoza), the economic structure is somewhat less favourable. It is concluded that cities with both a strong knowled-ge base and a strong economic base have the best perspectives for fruitful university-business interaction.

Transportation policy and spatial policyEvidently, transportation policies have an impact on the accessibility of cities. This holds in particular for the roll-out ofthe HST system in Europe. Cities that are not being connected to the system (either directly or via a fast link to a near-by HST station) will lose relative accessibility, with possibly negative consequences for the local economy.

National spatial planning policies have a long term impact on local and regional competitiveness. In the Netherlands, theministry of spatial planning (VROM) has recently appointed three economic core regions in the Netherlands: Rotterdamwith its harbour, Amsterdam with Schiphol Airport and the south-eastern part of the country including Eindhoven as‘brainport’. This is very important for the region of Eindhoven as a national acknowledgement of its economic strength.In France, the creation of ‘technopoles’ and ‘science regions’ has been an important effort to promote the knowledgeeconomy.

Social policySocial policies (affecting welfare systems and access to public amenities and education), evidently, have an impact onlevels of social exclusion in cities: in generous welfare states such as Sweden and Finland, problems of social exclusionare less acute than in the more ‘free market’ systems such as the UK. Germany and The Netherlands take a positionsomewhere in between. On the local level, however, the picture is very varied. Some cities have a very pronounced ‘dualeconomy’, with on the one hand very prospering economic sectors where the highly educated earn high salaries andhave a high standard of living, and on the other, large pockets of deprivation and social exclusion. This holds especiallyfor cities that were hard hit by economic restructuring processes, such as metropoles in transition and technotowns intransition. Changes in national welfare policies are more urgently felt in these cities. In some countries (i.e. the Nether-lands) some welfare policies have been decentralised to the urban level.

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Immigration policyEuropean countries have a long tradition of low-skilled immigration. The emerging knowledge economy however incre-ases the need for higher skilled. This increasingly poses tensions that are most articulate in larger cities. Many immigrantsthat came to Europe in the 1960s and 1970s were employed in manufacturing industries and other industrial low-skilledactivities. When these sectors went into decline, many of them lost their jobs. Currently, cities with a legacy of oldindustries (in our typology: metropoles in transition and technotowns in transition) still have relatively large migrant com-munities that are low-skilled and find it hard to make their way into the knowledge economy. Recently, more stringentimmigration laws in the EU have reduced low-skilled immigration. At the same time, some countries are considering tomake it easier for higher-educated immigrants to enter their labour markets.

Attracting high-skilled immigrants: the Green Card system in GermanyIn the late 1990s, there was a large shortage of highly-skilled ICT experts. To tackle this problem Germany introducedthe ‘green card’ system, that allowed foreign ICT-experts a temporary working permit. From August 2000 until the endof 2002, some 10,000 people arrived in Germany, from all over the world. The largest contingents came from India andCentral and Eastern European countries (Schreyer and Gebhart, 2003). Te city of Munich was by far the largest recei-ver of greencard holders: 1,532 in total. They were mainly attracted by the booming ICT sector in the city. Munichreceived more specialists than all the cities in NorthRhine Westfalia together.

5.3 Bottlenecks and problems in the governance of the local knowledge economy

At least two major bottlenecks can be distinguished in the ‘territorial’ governance of Europe’s knowledge economy. Thesegovernance deficits lead to a much lower than possible return on public investment.

1. National and European policies do not take regional differences into accountWe have argued that urban regions are the engines of the knowledge economy in Europe, but the extent to which theyfulfil this function varies considerably among different types of cities. In section 4, we have shown that cities can be verydifferent in terms of their knowledge foundations and knowledge activities, and have different potential for knowledge-based development. Therefore, national and European knowledge economy policies should not come in a ‘one size fitsall’ form, but should somehow be adequately adapted to local/regional needs and circumstances. However, national andEuropean policies hardly take regional/local peculiarities into account explicitly.

2. Policy efforts in Europe are highly fragmented, on all levelsOn the European level, there still is a fragmented landscape of national policies and a lack of co-operation. For instan-ce, every country has its own science policy. National science foundations exist in all nations, and they support the sameresearch fields (typically ICT, biotechnology, nanotechnology and new materials research is encouraged everywhere). Thefragmented approach holds back the potential of Europe as a whole to remain leading.

On the local level, there (often) is a lack of co-operation, which implies that many cities try to reinvent the same wheeland develop policies independently of their neighbours. This lack of co-ordination takes place within urban regions andbetween urban regions.

• Within urban regions. In metropolitan areas, often, there is severe and unfruitful competition between administrativecommunities, to attract inward investment, to attract higher educated inhabitants or to develop new growth clusters.Although some competition can be healthy, this situation often leads to a waste of resources and produces sub-opti-mal outcomes. In many policy fields (spatial policy, housing policy, transportation), intra-municipal co-ordination canlead to much better results for the urban region as a whole.

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• Between urban regions. There is a substantial level of competition between urban areas, to attract firms, inhabitantsand tourists. Again, competition can bring creativity and yield diversity. However, related to the development of theknowledge economy, it can also produce adverse results. Van den Berg et al. (2004) show that many cities choosethe same ‘spearhead clusters’: ICT and biotechnology, with some variations, appear in almost every city; nanotech-nology is becoming popular as well. This can lead to a fragmented landscape where many clusters lack the criticalmass to really take off. In their cluster policies, cities hardly look beyond their administrative borders. However, clusteractors (firms, universities, workers) rather operate on a different scale level and don’t mind administrative borders.With improving transportation systems (the high-speed train network is particularly important), functional regions arestill growing: commuting distances will increase, and the relevant region for clusters will continue to grow accordin-gly. This is not reflected in policies, however. We found that neighbouring cities often develop identical clusters andcompete instead of co-operate. In the Randstad for instance (of which Rotterdam and Amsterdam are part), there areat least three cities that want to develop a health/biotech cluster. Similar situations prevail in the Ruhr area (whereDortmund is situated). Eindhoven is a rather positive exception: this city defines and promotes its clusters on theregional level, and also seeks to co-ordinate its efforts with other cities (Leuven and Aachen).

National governments, in many cases, are not prepared to make explicit choices for specific spatial growth clusters orcentres of excellence: political processes bring a tendency of even spread of investments over the national territory tokeep all the regions happy.

5.4 Current efforts to improve the governance of the local knowledge economy in various countries

Many countries, cities and regions struggle with the question how to improve the (territorial) governance of the know-ledge economy to improve competitiveness and reduce social exclusion. What measures do they take, and what frame-works do they develop?

On the basis of our research into current practises and planned actions in a number of cities and nations, it is possibleto make a distinction between four types of options:

• Bottom-up approaches (initiated on the local/regional level)• Top-down approaches (initiated by national/regional/EU governments)• Joined-up approaches (a combination of local and national initiative)• A decentralisation of responsibilities.

Bottom-up initiativesIn bottom-up activities, local governments (or other local actors) take the initiative to improve their position in the know-ledge economy. Cities can join forces to strengthen their knowledge foundations and activities. We found a number ofexamples where they:

• co-operate to create clusters. One example is the city of Rotterdam: it has recently included the technical universityof the neighbouring city of Delft in its cluster policy. The idea is that the cities’ cluster policies would be designed atleast on the level of functional urban regions (commuting regions) or even higher spatial levels.

• co-operate to improve the knowledge base. An example is the network of local universities in the Dutch-German bor-der region. The universities in Münster, Osnabrück, Dortmund, Enschede and Nijmegen are cooperating in researchand technology transfer via the Network of Euregional Universities (NEU). Furthermore, the regions of Münster, Osna-brück and Enschede/Hengelo work together to strengthen the networks between research & education institutes and

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companies. In the fields of logistics, surface technology, healthcare services and ICT the Knowledge Region (‘Wis-sensregion’) supports and enhances contacts. Partners involved are 3 polytechnics, 3 universities, 6 municipalities,CeNTech, Technologiehof and the Economic Development Agency of Osnabrück (www.wissensregion.de).

• co-operate for a better digital infrastructure. In the field of digital infrastructure, the German city of Münster co-ope-rates with Dutch partners across the border, namely the Dutch university of Twente (located in Enschede) and a Dutchregional development company (OOM NV). In 2001, they set up the worldwide first international internet exchangeNDIX. It has connection points in Enschede (Netherlands) and Münster (Germany). It leads to lower internet trafficcosts for the customers compared to the former situation when big internet traffic customers in Münster were con-nected to the internet exchange in Frankfurt/M. Companies that want to benefit from the proximity of NDIX can buypremises and offices in the business park Loddenheide, where the German NDIX connection point is situated. TheGerman-Dutch cooperation project NDIX is financially supported by the EU within the framework of the Interreg-IIIAprogramme from European structure funds.

• co-operate to strengthen the economic base. This is the basic aim of a recent network of three smaller cities: Eind-hoven (NL), Leuven (B) and Aachen (D). The very interesting feature of this network is the fact that it is business dri-ven: Philips, the electronics company, has important research facilities in each of the three cities. The company hasurged the three cities to develop a strategy in order to make the region as a whole stronger as a knowledge region.In the eyes of Philips, the ‘golden triangle’ of the three cities could well develop into a very innovative region that willremain attractive for companies to do research in. Currently, the partners are searching for areas of co-operation.

• co-operate to get more policy attention from the national government. The UK provides a very interesting example.Up till some years ago there was little recognition for the role and contribution of cities outside London in helping togrow the UK economy. The Core Cities Group was established with its main aim to increase the role and profile ofcities in national urban and economic policy. They have, in part, achieved this aim: the important role of cities in thenational economy has now become acknowledged by many policy makers.

In sum, it seems that cities are increasingly aware of the need for strategic co-operation, either to compensate for scaledisadvantages (this holds for smaller cities), to benefit from unexploited potentials (see the Rotterdam case), to get morepolicy attention (the UK case) or the argument put forward by big business that co-operation is needed to ensure a goodinnovative climate in Europe (as in the Eindhoven-Leuven-Aachen network). It should be noted that many European ini-tiatives, such as the Interreg funds, make it very attractive for cities to co-operate.

Top-down approachesIn the pure top-down approach, the national (or regional, in the case of some federal states) government unilaterally deci-des where public resources are invested. For instance, it may decide to invest heavily in only one or just a few promisingregions or cities only to create true centres of excellence. In its pure form, we did not find an example in Europe. Politi-cal processes make it very difficult for governments to explicitly favor one specific region over others, and to make clearchoices. Rather, in their regional policies, many countries support disadvantaged regions instead of focusing on alreadystrong ones. Perhaps the establishment of the IMEC in Leuven can serve as an example where the regional governmenthas dared to invest substantial resources in one specific centre.

Joined-up approaches of national and local/regional governmentsIn a joined-up approach, local authorities co-operate with national government and other actors to create and implementknowledge economy strategies that are better tailored to local needs.

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The UK provides a good example. There, the bottom-up approach of the core cities (described above) has invoked a co-operative approach. The Office of the Deputy Prime Minister started to collaborate with the Core Cities, Regional Deve-lopment Agencies and other Government Departments to develop new ideas for enhancing the economic competitive-ness of regional cities. In 2003, this led to a jointly issued report called ‘Cities, Regions and Competitiveness’. It arguesthat ‘stronger regional cities could add more cylinders to the UK’s economic engine and provide more space for Londonto further develop its unique global city role’. The report thus acknowledged that regional cities can benefit from the spre-ad effects of high growth in London and the South East, and can thereby support the role of the capital cities, by helpingto diminish agglomeration disadvantages. It also contains an action plan for strengthening productivity and the urbanrenaissance in the major regional cities, as the essential foundation for progressive improvements in the performance ofall regions. Following this report, the Deputy Prime Minister John Prescott asked the Core Cities to each prepare a pros-pectus detailing how they would deliver enhanced economic competitiveness and prosperity within their regions. Con-sequently, Manchester, together with key regional partners, developed the Manchester: Knowledge Capital (MKC) Pros-pectus. This prospectus can be considered as a further elaboration of the Core Cities’ objectives but in particular as afurther elaboration of its earlier City Pride vision. Major differences between Manchester: Knowledge Capital and CityPride are that there are now more partners involved, the goals have been made more explicit, and it is in particular a uni-que cross-regional, cross-sectoral partnership that is taking the lead.

In the Netherlands, national government also increasingly recognises the role of urban regions as engines of the know-ledge economy, and tries to develop a more tailor-made approach. As a result, national ministries increasingly co-ope-rate with local and regional governments to develop knowledge economy-related activities. One recent example is a newpolicy document of the Ministry of Economic affairs with the title ‘Peaks in the Delta’ (Ministry of Economic Affairs, 2004).In that document, the ministry expresses the desire to focus its regional investments on six promising regions (each con-sisting of several municipalities) in the country. At the same time, it proposes to put an end to the traditional financialsupport for the peripheral and predominantly rural Northern part of the country. This means a major shift in policy empha-sis. In the implementation of the new ideas, the ministry leaves the floor to the regions to come up with ideas. It encou-rages the six ‘spearhead regions’ to organise themselves internally, and come up with concrete and focused plans, towhich the Ministry could provide a contribution.

Finland has probably the longest tradition of focusing national and local resources on strong regional competences. Theidea behind the national Centre of Expertise Programme, launched in 1994, is to focus local, regional and national resour-ces on the development of internationally competitive fields of know-how. The programme pays special attention toSMEs to develop selected internationally-competitive fields of expertise, and stimulate technology transfer from univer-sities to firms. The Programme covers the whole country and it is carried out in regional Centres of Expertise, appointedby the Council of State, that work closely with universities and companies in their respective sectors. The Ministry of theInterior has an important role in the national co-ordination of the Centre of Expertise programme.

DecentralisationThe decentralization of responsibilities from national to lower-level governments can be an instrument to ‘localise’ know-ledge economy policies. The UK government is decentralizing some activities that are strongly related to the knowledgeeconomy. For instance, it is enhancing the role of Regional Development Agencies (RDA’s) in strengthening business-uni-versity links.

In table 5.4.1 the actions and their rationales are summarized. It shows the diversity of approaches that are applied today.

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Table 5.4.1 Governance of the local knowledge economy: an overview of actions

Type of action Examples Rationales

Bottom-up initiatives by local authorities Rotterdam/Delft co-operation; Articulation of specific local needs

City-network Eindhoven-Leuven-Aachen; Need for small cities to compensate for scale disadvantages

City network Münster-Enschede-Osnabruck Opportunity to benefit from unexploited potentials

Location quality demands of large companies

Availability of financial incentives (European funding)

Top-down initiatives by national/regional Foundation of the IMEC in Leuven Create ‘critical mass’; Invest in only one or few places to create

governments strong hotspots

Joined-up initiatives Core-cities strategy (UK); ‘Peaks in the Delta’ policy (NL) Desire of national governments to:

a) Add more cylinders to the economy (UK)

b) focus national investments using local knowledge and ‘energy’,

in order to improve competitiveness (NL)

c) improve intra-regional co-operation (NL)

Desire of local/regional governments to get more support from

national governments

Decentralization of responsibilities Decentralization of some innovation policies to Regional Arrive at more tailor-made policies on the local level

Development Agencies (RDA) (UK)

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6 Policy conclusionsThe key point made in this paper it that exploiting and further developing Europe’s distinctive urban strengths is an impor-tant though often ignored step to reach the Lisbon goals.

In this paper, we have argued that urban areas —different as they are— are focal points of the knowledge economy, inmany respects. To capitalise on local strengths, it is needed to 1) improve the link between research infrastructure andbusiness, on the local level; this can benefit both sides; 2) improve the match between education and the needs of thelocal economy and 3) encourage entrepreneurship. This paper has shown the large variations between cities concerningtheir potentials to thrive in the knowledge economy. Local actors know best where the opportunities and threats are. The-refore, to capitalise on this, national governments should make use of their knowledge, energy and networks; They couldencourage local actors to develop regional strategies in public private partnerships, and support these strategies in dif-ferent ways. Instruments are financial incentives, or allowing regions to experiment with legislation and regulation.

Human capital is the prime input in the knowledge economy. But cities are in need of very different types of humanresources, depending on their economic structure. This has implications for education policies: they should be morelocalised, in order to improve the alignment of the local education infrastructure with the local economic ambitions.

The same differentiated local approach is needed to tackle issues of social exclusion that are associated with the emer-ging knowledge economy. The roots and causes of exclusion are very different depending on the local context, and everycity needs to develop its own approaches. For instance, programmes to stimulate reintegration in the labour marketshould be based on specific local economic opportunities that depend on the local sector structure.

A more localized approach asks for stronger competences of policymakers on the local level. They should be given morefreedom to operate in order to develop innovative solutions. Also, in order to give them incentives to develop and imple-ment good ideas, a more entrepreneurial attitude is needed within local governments and semi-public organisations thatare responsible for local/regional economic development. One way to achieve this is to introduce performance-basedremuneration as a complement to fixed salaries.

Encouraging and promoting regional initiatives is not enough to develop the top sections of the knowledge economy. Akey question for Europe’s policymakers is how to create or support centres of excellence on a European scale. For anincreasing number of activities, there may only be room for one or a few top locations in Europe, because of the criticalmass and high investments needed, and because of unprecedented complexity and specialisation. Choices have to bemade. Europe has been successful in this respect in the aircraft industry (Airbus) and in the promotion of nuclear rese-arch (CERN in Hamburg). If Europe fails to create more of such centres, it will continue to lose talent and resources toother countries, notably to the US. It is alarming in that respect that many European pharmaceutical companies havemoved their research activities to the US where they find the desired spatial concentrations of specialised knowledgeand entrepreneurship. To create such centres in Europe, choices have to be made, and the current fragmented landsca-pe of research funding should change radically. For this, an increased co-ordination of research and innovation policieswithin and among the member states is needed.

This paper has argued that the knowledge economy is causing shifts in Europe’s urban system. The best cards seem tobe in the hands of internationally connected metropolitan areas that have a diversified economy, a strong knowledgebase, and a high quality of life. In the coming years, these cities’ relative position is likely to improve further: with incre-asing internationalisation of research and business, their cultural diversity and accessibility are clear assets to attract

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(foreign) firms and people; also, they will benefit from the trend of improving co-operation between universities and bus-iness, because they are strong in both respects. If this is true, a key policy question for national governments is whetherto back the winners or help the losers, or, in other words, whether to invest in the already thriving places, or in the wea-ker areas.

‘Backing the winners’ would lead to an increased concentration of human capital and knowledge intensive business inalready densely populated metropolitan areas; these regions could become even more attractive for investments fromabroad. Concentration has a price too, in terms of congestion and crowding out. Also, it may further hollow out the know-ledge base of provincial cities and disrupt the spatial balance.

The position of non-metropolitan urban regions needs specific policy attention. They are a vital part of Europe’s urbansystem, and typically have an important function for large hinterlands. To safeguard the vitality of these cities, policies needto be formed that strengthen their specialisation. If they want to maintain a spatial balance, governments could encoura-ge smaller, non-metropolitan cities to develop specific niches and specialisations in a creative way, and to engage in stra-tegic partnerships with other cities. Or, they could directly invest in facilities in fields where the region has potential. Bydoing this, they may create critical mass in some specific fields, which is increasingly needed in the knowledge economy.

In this paper, we have shown examples of emerging trans-border city networks that have the potential of achieving this.But this comes with a price: more specialised regions are more vulnerable to economic shocks. Another way nationalgovernments can counter the trend of mega-urbanisation is by encouraging and facilitating the roll-out of top-level elec-tronic infrastructure in non-metropolitan regions. This can at least partly help them overcome their accessibility deficit.Without policy intervention, these cities will lag further behind, as market actors tend to ‘cherry pick’ and prefer denselypopulated metropolitan areas.

In defining the geography of the knowledge economy, it is fruitful to think in networks consisting of nodes and linkages.Rather than defining space in terms of individual cities or city regions, it is possible to conceive regions in terms of accessto specialised knowledge resources. If we look at Europe’s urban system in this way, we may see larger regions withenormous knowledge resources and potential. If these resources would be better aligned to each other, the potential canbe fully reaped. The electronic company Philips recently encouraged the cities of Eindhoven, Aachen and Leuven to thinkin this way. Here again, cross-border co-operation is needed.This paper is largely explorative and leans heavily on case studies. It touches upon many issues that need further ela-boration. An issue for further research is how to measure the performance of urban regions in the knowledge economy.Given the different starting positions of cities, is would be useful to speak of relative performance rather than absoluteperformance: the cities ‘play in different leagues’ because their initial positions are so different. It would be interesting tomeasure ‘traditional’ economic performance indicators (developments in (un)employment, GDP/capita, productivity)alongside additional ones (share of innovative/knowledge intensive industries) and social exclusion measures. The frameof analysis and the typology can serve as a basis for a larger scale quantitative assessment that can serve as a basis forbetter policies.

More in-depth research is needed into the governance of knowledge economy. One topic is the alignment of nationalpolicies and local needs. This paper touches upon the way national policies affects the local knowledge economy, butmore research is needed, in more European countries, to discover differences and good-practises. Another relevant topicis the potential for urban networks. This paper shows that cities are aware of the needs of strategic partnership with othercities, but they are struggling to give ‘substance’ to urban networks. More research into this topic could describe options,bottlenecks, ‘best practices’ and generate ideas for ‘next practices’. A related topic concerns the extent to which the pri-vate sector —i.e. larger companies— can be involved in knowledge economy strategies.

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One finding in this report is that the spatial organisation of the knowledge economy is subject to major changes: tradi-tional administrative borders —that are the basis for policies— no longer coincide with the reality of ‘knowledge regions’and ‘knowledge networks’, often cross-border. This evokes a number of questions: how can we define and measureknowledge regions and networks? How can the governance of such areas or networks be improved? What are the impli-cations for national and European policy?

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44

STÄDTE IN DER WISSENSGESELLSCHAFT:NEUE HERAUSFORDERUNGEN FÜR DIE

REGIERUNG

September 2004

Willem van WindenLeo van den Berg

European Institute for Comparative Urban ResearchPO box 1738

3000 DR Rotterdam, NiederlandeTelefon: + 31 10 408 2740 / 1186

www.euricur.nl

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46

Zusammenfassende darstellungIn den Debatten über die Position Europas in der Wissensgesellschaft wird die Rolle der Städte nur selten erwähnt. DieseTatsache ist überraschend, da die Wissensgesellschaft eine sehr urbane Wirtschaft ist. Darüber hinaus wird durch dieverallgemeinernden Diskussionen über die Wissensgesellschaft – obgleich sie durchaus nützlich sind – ein sehr differen-ziertes Bild in den Hintergrund gedrängt. einigen städtischen Regionen geht es sehr gut, während andere Regionen hin-terherhinken. In dieser Diskussionsgrundlage möchten wir den Versuch unternehmen, diese Lücke zu schließen und dieAufmerksamkeit auf die Rolle der Städte und der städtischen Regionen in der Wissensgesellschaft lenken. Wir erörtern,warum die Städte wichtige Körperschaften in der Wissensgesellschaft darstellen. Dieses Dokument konzentriert sichdarüber hinaus auf die Interrelationen zwischen lokalen, regionalen und nationalen Maßnahmen und Maßnahmen der EUund fördert die Wissensgesellschaft auf städtischer Ebene. Es veranschaulicht die aktuellen Praktiken in verschiedenenLändern und ist bestrebt, die Diskussionen über eine verbesserte Regelung der Wissensgesellschaft anzuregen.

Das niederländische Ministerium für Inneres und Beziehungen im Königreich war Initiator des urbanen Projektes STRIKE(Strategies for urban Regions in the Knowledge Economy), das zu der Veröffentlichung dieses Dokuments geführt hat.Zu den weiteren nationalen Organisationen, die an diesem Projekt teilgenommen haben, gehört neben dem ODPM (Offi-ce of the Deputy Prime Minister) von Großbritannien auch das DATA (Délégation à l’aménagement du territoire et à l’ac-tion régionale) aus Frankreich. Darüber hinaus nahmen die Städte Aachen, Enschede, Eindhoven, Leuven, Manchesterund Münster an diesem Projekt teil. Sie verbindet nicht nur das gemeinsame Ziel, ihre Position in der aufkommendenWissensgesellschaft zu stärken, sondern auch ihre Bereitschaft, Erfahrungen auszutauschen und voneinander zu lernen.

Die Kernaussage dieses Dokuments ist, dass die Nutzung und Weiterentwicklung der kennzeichnenden urbanen Stärkenein wichtiger und dennoch häufig ignorierter Schritt ist, um die Ziele von Lissabon zu erreichen.

In diesem Dokument sehen wir die Entwicklung in Richtung einer Wissensgesellschaft als einen unabwendbaren Trend,der sich auf alle Städte auswirken wird. Dabei sind zahlreiche Eigenschaften erkennbar, die als solches nicht neu sind,sich jedoch in der letzten Dekade intensiviert hat. In der Wissensgesellschaft stellen Kenntnisse und Informationen diewichtigsten Inputs und Outputs dar; es ist eine zunehmende Verbreitungsgeschwindigkeit von Kenntnissen und Infor-mationen erkennbar; die Wissensgesellschaft ist eine Netzwerk-Wirtschaft, in der es zunehmend auf Konnektivitätankommt; in der Wissensgesellschaft haben Unternehmertätigkeit und Innovation einen wichtigen Stellenwert; die Wis-sensgesellschaft ist sehr volatil; und es kommt in immer mehr Sektoren – Forschung, Biotechnologie – auf die „kritischeMasse” an.

Urbane Bereiche – so unterschiedlich sie auch sind – sind in vieler Hinsicht die Brennpunkte der Wissensgesellschaft.Dies ist vorwiegend in Städten der Fall, in denen Kenntnisse entwickelt, verarbeitet, ausgetauscht oder vermarktet wer-den. Die Städte verfügen über die beste Kenntnis-Infrastruktur (Universitäten und sonstige Bildungseinrichtungen etc.);sie haben in der Regel einen höheren Anteil an hochqualifizierten Menschen; sie verfügen über die beste elektronischeInfrastruktur und sind über Flughäfen mit der globalen Wirtschaft verbunden; sie erfüllen eine Aufgabe als ein Ort, an demKenntnisse ausgetauscht und sich Talente und neue Kombinationen entwickeln können. Es ist daher kein Zufall, dassviele der großen Städte in den Neunziger Jahren des 20. Jahrhunderts eine bemerkenswerte Wiederbelebung erlebthaben. Gleichzeitig hat die Wissensgesellschaft die Tendenz, eine duale Wirtschaft zu erzeugen, in der eine zunehmen-de Polarisierung zwischen einer Klasse gut bezahlter und qualifizierter Arbeiter einerseits und einer Unterklasse anderer-seits existiert, der die Fähigkeiten und Ressourcen zur Teilnahme fehlt. Diese Polarisierung wird in den Städten, die mitdem Zerfall ganzer Industrien zu kämpfen hatten, besonders deutlich, und nimmt manchmal die Ausmaße einer räumli-chen Trennung an.

Dieses Papier zeigt unter Verwendung eines analytischen Rahmens, dass es in Bezug auf die jeweiligen wirtschaftlichenPotenziale und den Problemen einer sozialen Ausgrenzung umfangreiche Schwankungen zwischen den unterschiedli-chen Städten gibt. Dies hat politische Auswirkungen. Lokale Handlungsträger wissen am besten, worin die Chancen undRisiken bestehen. Daher sollten die nationalen Regierungen auf die Kenntnisse, die Energie und die Netzwerke der Städ-te zurückgreifen; die nationalen Regierungen und die EU könnten die Handlungsträger vor Ort ermutigen, regionale Stra-tegien in Bezug auf öffentlich-private Partnerschaften zu entwickeln und diese Strategien auf unterschiedliche Weise för-dern. Dies kann nicht nur in Form von finanziellen Anreizen geschehen, sondern auch, indem man den Regionen mehrHandlungsspielraum einräumt, um mit der Gesetzgebung zu experimentieren. Die gleiche differenzierte Vorgehensweiseist ebenfalls erforderlich, um die Aspekte der sozialen Ausgrenzung anzugehen, die mit der aufkommenden Wissensge-sellschaft zusammenhängen. Die Ursachen für diese Ausgrenzung unterscheidet sich in zahlreichen lokalen Zusammen-hängen, und jede Stadt muss daher ein eigenes Lösungskonzept entwickeln.

Ein eher lokal orientierter Lösungsansatz fordert auch stärkere Kompetenzen für die Politiker auf lokaler Ebene. Man soll-te ihnen einen größeren Handlungsspielraum einräumen, damit sie innovative Lösungen entwickeln können. Um ihneneinen Anreiz zur Entwicklung und Umsetzung guter Ideen zu geben, ist darüber hinaus eine noch unternehmerischereEinstellung bei lokalen Regierungen und halböffentlichen Organisationen erforderlich, die für die lokale bzw. regionaleEntwicklung der Wirtschaft verantwortlich sind. Gleichzeitig sollten es die nationalen Regierungen wagen, eine deutli-chere Auswahl zu treffen und ihre Investitionen auf die Bereiche zu konzentrieren, in denen die besten Erträge zu erwar-ten sind.

Regionale Initiativen zu ermutigen und zu fördern reicht nicht aus, um die „Erste Liga” der Wissensgesellschaft zu entwic-keln. Bei immer mehr Aktivitäten ist auf Grund der erforderlichen kritischen Masse, der hohen Investitionen und der völ-lig neuen Komplexität und Spezialisierung nur Spielraum für einen oder bestenfalls wenige erstklassige Standorte inEuropa. Es müssen Entscheidungen getroffen werden. Europa ist in dieser Hinsicht erfolgreich im Bereich der Luftfahrt-branche (Airbus) sowie bei der Förderung der Nuklearforschung (CERN). Für die Politiker in Europa stellt sich jetzt diewichtige Frage, wie man Zentren oder Netzwerke der Vortrefflichkeit im europäischen Stil entwickeln oder fördern kann.Sollte Europa nicht in der Lage sein, mehr dieser Zentren zu schaffen, wird es weiterhin qualifizierte Personen und Res-sourcen an andere Länder – hauptsächlich an die USA – verlieren. Es müssen Entscheidungen getroffen werden: dieaktuelle, bruchstückhafte Landschaft der Forschungsfinanzierung sollte radikal geändert werden. Eine zunehmendeKoordinierung der Forschung und Innovationspolitik innerhalb und unter den EU-Mitgliederstaaten ist erforderlich, vonder die Städte in großem Umfang profitieren werden.

Das Dokument deutet darauf hin, dass die Wissensgesellschaft eine Veränderung des Stadtsystems in Europa herbei-führen wird. Die Metropolen mit internationalen Verbindungen, einer diversifizierten Wirtschaft, einer starken Wissensba-sis und einer hohen Lebensqualität scheinen dabei die Trümpfe zu haben. Die relative Position dieser Städte wird sichwahrscheinlich noch weiter verbessern: auf Grund der zunehmenden Internationalisierung der Forschung und der Wirt-schaft gehören die kulturelle Vielseitigkeit und die Erreichbarkeit zu den klaren Vorteilen der Städte, um Firmen und Per-sonen (ggf. auch aus dem Ausland) anzuziehen; darüber hinaus werden sie von dem Trend profitieren, die Kooperationzwischen Universitäten und der Wirtschaft zu verbessern, da sie auf beiden Gebieten sehr stark sind. Für die Regierun-gen stellt sich die wichtige Frage, ob man die Sieger unterstützen oder den Verlierern helfen soll: in die bereits boomen-den Bereiche oder in die schwächeren Regionen investieren. Eine „Unterstützung der Sieger” würde eine verstärkte Kon-zentration des Humankapitals und der wissensintensiven Unternehmen in einer bereits dicht besiedelten Metropole zurFolge haben: Diese Regionen könnten für Investoren aus dem Ausland noch attraktiver werden. Konzentration hat aberauch ihren Preis in Form von Überlastung und Verdrängung. Darüber hinaus wird sie die Wissensbasis der Provinzstäd-te noch weiter aushöhlen und das räumliche Gegengewicht stören.

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Die Position der urbanen Regionen ohne Großstadtcharakter benötigen eine besondere Aufmerksamkeit von Seiten derPolitik. Sie sind ein wichtiger Bestandteil des europäischen Städtesystems und haben in der Regel eine wichtige Aufga-be für das große Umland zu erfüllen. Um die Vitalität dieser Städte zu erhalten, müssen entsprechende Verfahrenswei-sen festgelegt werden, die die Spezialisierung dieser Städte stärken. Wenn die Regierungen ein räumliches Gleichge-wicht aufrecht erhalten möchten, könnten sie kleinere Städte ohne Großstadtcharakter ermutigen, spezifischeSpezialisierungen zu entwickeln und sich in strategischen Partnerschaften mit anderen Städten zu engagieren. Alterna-tiv könnten sie direkt in den Bereichen in Anlagen investieren, in denen die einzelnen Regionen Potenzial besitzen: aufdiese Weise kann eine kritische Masse in bestimmten Bereichen entstehen, die zunehmend in der Wissensgesellschaftbenötigt wird.

Bei der Definition der Geographie der Wissensgesellschaft ist es von Vorteil, wenn man sich Netzwerke vorstellt, die ausKnoten und Verbindungen bestehen. Anstatt den Raum unter dem Aspekt von einzelnen Städten oder Stadtgebieten zudefinieren, sollten wir die Regionen als ein Zugang zu speziellen Kenntnisressourcen begreifen. Wenn wir uns in dieserHinsicht das urbane System von Europa ansehen, erkennen wir vielleicht größere Regionen mit enormen Kenntnisres-sourcen und Potenzial. Wenn diese Ressourcen besser aufeinander ausgerichtet würden, könnte das Potenzial in vollemUmfang ausgenutzt werden.

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LES VILLES DANS L’ECONOMIE DU SAVOIR :NOUVEAUX DEFIS EN MATIERE DE

GOUVERNANCE

Septembre 2004

Willem van WindenLeo van den Berg

European Institute for Comparative Urban Research. 1738

3000 DR Rotterdam, Pays-BasTéléphone : + 31 10 408 2740 / 1186

www.euricur.nl

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ResuméLe débat suscité par le futur de l’Europe en matière d’économie du savoir prend rarement en considération le rôle desvilles, ce qui est surprenant car ce genre d’économie relève surtout de l’économie urbaine. De plus, les discussions géné-ralisées très utiles qu’il provoque masquent généralement une image très différenciée : certaines régions urbaines réali-sent des progrès remarquables tandis que d’autres restent à la traîne. Le présent document de base tente de mettre enlumière cet écart et mettre l’accent sur le rôle des villes et des régions dans l’économie du savoir. Nous mettrons en avantle point expliquant pourquoi les villes représentent des entités importantes dans l’économie du savoir et en particulier,nous tenterons de faire ressortir les relations interdépendantes qui existent entre les actions locales, régionales, natio-nales et européennes, visant à promouvoir l’économie du savoir au niveau urbain. Ce document illustre les pratiquesactuellement en vigueur dans différents pays et cherche à susciter des débats sur la manière d’améliorer la gouvernan-ce de l’économie du savoir.

Le ministre hollandais de l’Intérieur et des Relations au sein du Royaume a été à la base du projet Urbact dans le cadrede STRIKE (Stratégies en faveur des régions urbaines dans l’économie du savoir). Le présent document est publié à lasuite de cette initiative. Parmi les autres organismes parties prenantes au projet, on peut citer le Cabinet du vice-premierministre du Royaume-Uni et la Délégation à l’aménagement du territoire et à l’action régionale de France. Les villes par-ticipantes sont Aix-la-Chapelle, Enschede, Eindhoven, Louvain, Manchester et Münster. Elles partagent un haut niveaud’ambition dans le but de renforcer leur position dans l’économie émergente du savoir et la volonté de favoriser l’é-change et l’apprentissage mutuel d’expériences.

Le point clé du présent document consiste à démontrer que la mise à profit et le développement poussé des différentesforces urbaines européennes constituent une étape importante, bien que souvent ignorée, dans la réussite des objectifsde Lisbonne.

Dans ce document, nous voyons combien le développement en faveur de l’économie du savoir représente une tendan-ce inévitable qui affecte toutes les villes. Il comporte quelques caractéristiques qui ne sont pas nouvelles en soi, maisqui se sont accrues au cours de la dernière décennie. Dans l’économie du savoir, la connaissance et l’information sontles principales ressources et les principaux rendements ; la vitesse de diffusion de l’information et du savoir est en per-pétuelle augmentation ; l’économie du savoir est une économie de réseau, où la connectivité importe de plus en plus ;dans l’économie du savoir on accorde une grande importance à l’entrepreneuriat et à l’innovation ; elle est très volatile ;enfin, dans un certain nombre de secteurs de plus en plus importants (la recherche, la biotechnologie), la « masse criti-que » prend de l’importance.

Les zones urbaines, avec leurs différences, sont des points centraux de l’économie du savoir à maints égards. C’est prin-cipalement dans les villes que l’on produit, transforme, échange et commercialise la connaissance. Les villes sont mieuxdotées pour héberger les infrastructures propres au savoir (universités, autres établissements éducatifs, etc.) et elles onttendance à regrouper des personnes présentant un degré d’instruction bien supérieur à la moyenne ; leur infrastructureen moyens électroniques est supérieure et elles ont un accès rapide à l’économie mondiale grâce à l’implantation d’aér-oports. Elles ont un rôle à jouer car elles favorisent l’échange de la connaissance et l’éclosion de talents et de nouvellescombinaisons. Le fait que de nombreuses grandes villes aient connu un redressement remarquable au cours des années90 ne relève donc pas du hasard. En même temps, l’économie du savoir a tendance à produire une économie duale, oùl’on assiste à l’accroissement d’une polarisation entre une classe de travailleurs instruits et bien payés et une sous-clas-se de personnes dépourvues de compétences et de ressources pour y prendre part. La polarisation est plus ressentie dansdes villes qui ont hérité d’industries en déclin, et parfois revêt la forme d’une ségrégation spatiale évidente.

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La structure analytique du présent document révèle qu’il existe de grandes variations entre différents types de villes, sil’on se réfère à leurs potentiels économiques et à leurs problèmes d’exclusion sociale. Avec les implications politiquesqui en découlent. Les acteurs locaux savent mieux que quiconque les opportunités et les menaces que cela représente.Par conséquent, les gouvernements nationaux devraient se servir du savoir, de l’énergie et des réseaux de leurs villes ;avec l’UE, ils devraient encourager les acteurs locaux à développer des stratégies régionales dans des partenariatspublic-privé, et soutenir ces stratégies de plusieurs façons. Une façon d’y arriver, est d’octroyer des incitants financierset de donner aux régions plus de liberté en matière de législation. Il faut adopter la même approche locale différentiéepour aborder les questions d’exclusion sociale qui sont associées à l’économie du savoir émergente. Les causes d’ex-clusion diffèrent dans les différents contextes locaux et chaque ville doit développer ses propres approches.

Une approche plus localisée requiert des compétences plus solides de la part des décideurs politiques sur le plan local.Ils devraient bénéficier de plus de liberté pour agir et développer des solutions novatrices. Pour pouvoir leur donner desincitants permettant de concevoir et implémenter de bonnes idées, il conviendrait également d’adopter une attitude plusentrepreneuriale au sein des gouvernements locaux et des organismes paragouvernementaux qui sont responsables dudéveloppement économique local/régional. Les gouvernements nationaux devraient en même temps oser faire des choixplus clairs et concentrer leurs investissements là où les meilleurs rendements peuvent être attendus.

Cela ne suffit pas d’encourager et de promouvoir les initiatives régionales pour développer la « division Un » de l’éco-nomie du savoir. Pour un nombre croissant d’activités, il n’y a peut- être de la place que pour un ou quelques endroitsde premier niveau en Europe, en raison de la masse critique et des investissements élevés nécessaires ainsi que de lacomplexité et de la spécialisation sans précédent. Des choix doivent être opérés. L’Europe a parfaitement réussi à cetégard dans le domaine de l’industrie aéronautique (Airbus) dans la promotion de la recherche nucléaire (CERN). Unequestion essentielle pour les décideurs européens concerne la manière de créer ou de soutenir des centres ou desréseaux d’excellence à une échelle européenne. Si l’Europe ne parvient pas à créer un nombre plus important de cegenre de centres, elle continuera à perdre ses talents et ses ressources qui s’envoleront vers d’autres pays, notammentles Etats-Unis. Des choix doivent être opérés : le paysage fragmenté actuel du financement de la recherche devrait évo-luer radicalement. Il faut accroître la coordination de la recherche et les politiques d’innovation au sein et parmi les étatsmembres de l’UE, car elle profitera grandement aux villes.

Le document suggère que l’économie du savoir cause des changements au niveau du système urbain européen. La meil-leure carte semble se trouver dans les mains des zones métropolitaines reliées sur le plan international et qui sont doté-es d’une économie diversifiée, d’une forte base de connaissance et d’un niveau de qualité élevé. La position relative deces villes est susceptible de s’améliorer davantage : avec une internationalisation croissante de la recherche et des acti-vités commerciales, leur diversité culturelle et leur accessibilité représentent un attrait évident pour les firmes (étrangè-res) et les individus ; elles bénéficieront également de la tendance qui consiste à améliorer la coopération entre les uni-versités et les entreprises, car elles sont solides à ces égards. Une question politique clé pour les gouvernementsnationaux consiste à savoir s’il faut soutenir les gagnants ou aider les perdants : investir dans les endroits prospères oudans les zones plus faibles. Le fait de soutenir les « gagnants » entraînerait une concentration accrue de capital humainet d’entreprises à haute intensité de connaissances dans des zones métropolitaines qui connaissent déjà une forte den-sité de population : ces régions deviendraient encore plus attrayantes pour les investissements en provenance de l’é-tranger. La concentration a également un prix à payer, en termes de congestion et d’éviction. Elle peut également creu-ser davantage la base de la connaissance des villes de province et perturber l’équilibre spatial.

La situation des régions urbaines non métropolitaines requiert une attention particulière de la part des politiques. Ellesconstituent une partie vitale du système urbain européen et jouent habituellement un rôle important pour les vastes arri-ère-pays. Afin de sauvegarder la vitalité de ces villes, il faut adopter des politiques qui renforcent leur spécialisation. Si

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les gouvernements désirent conserver un équilibre spatial, ils doivent encourager des villes non métropolitaines de pluspetite taille à développer des spécialisations types, et à s’engager dans des partenariats stratégiques avec d’autres vil-les. Ou bien, ils pourraient investir directement dans des installations pour lesquelles les régions présentent un certainpotentiel : ces mesures peuvent créer une masse critique dans certains domaines bien précis, qui sont de plus en plusnécessaires pour l’économie du savoir.

Au moment de définir la géographie de l’économie du savoir, il serait judicieux de penser à des réseaux constitués denœuds et de liens. Au lieu de définir l’espace en terme de villes individuelles ou de régions urbaines, nous devrions con-cevoir des régions en termes d’accès à des ressources de savoir spécialisées. Si nous abordons le système urbain euro-péen de cette façon, nous pourrions voir surgir de plus grandes régions dotées de ressources et de potentiel énormesen matière de savoir. Si ces ressources étaient mieux alignées les unes par rapport aux autres, on pourrait recueillir tousles fruits de ce potentiel.

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STEDEN IN DE KENNISECONOMIENIEUWE BESTUURSUITDAGINGEN

September 2004

Willem van WindenLeo van den Berg

European Institute for Comparative Urban ResearchPO box 1738

3000 DR RotterdamTelefoon: + 31 10 408 2740 / 1186

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SamenvattingIn debatten over de positie van Europa in de kenniseconomie, wordt de rol van steden zelden genoemd. Nogal verba-zingwekkend, aangezien de kenniseconomie echt een stedelijke economie is. Bovendien gaat onder algemene discus-sies over de kenniseconomie, hoe nuttig die ook zijn, een heel divers beeld schuil: sommige stedelijke regio's doen hetheel goed, terwijl andere achterblijven. In dit discussiestuk hebben we een poging gedaan deze kloof te dichten, en bren-gen we de rol van steden en stedelijke regio's in de kenniseconomie onder de aandacht. We trachten aan te tonen waar-om steden belangrijke eenheden zijn in de kenniseconomie. Meer in het bijzonder is in deze paper de aandacht gerichtop de onderlinge verbanden tussen lokale, regionale, nationale en Europese acties om de kenniseconomie op stedelijkniveau te bevorderen. De huidige praktijken in verschillende landen zijn in beeld gebracht, met het doel een discussie opgang te brengen over de verbetering van het bestuur van de kenniseconomie.

Het Nederlandse Ministerie van Binnenlandse Zaken en Koninkrijksrelaties was de initiatiefnemer achter het Urbact-pro-ject STRIKE (Strategies for urban Regions in the Knowledge Economy), dat heeft geresulteerd in publicatie van dezepaper. Andere nationale organisaties die aan het project deelnamen, waren het ODPM (Office of the Deputy PrimeMinister) in het Verenigd Koninkrijk, en DATAR (Délégation à l'aménagement du territoire et à l'action régionale) in Frank-rijk. De deelnemende steden waren Aken, Enschede, Eindhoven, Leuven, Manchester en Münster. Zij delen de hogeambitie om hun positie in de opkomende kenniseconomie te versterken, en de bereidheid om ervaringen uit te wisselenen van elkaar te leren.

De belangrijkste conclusie in deze paper is dat het exploiteren en verder ontwikkelen van Europa's onderscheidende ste-delijke sterke punten een belangrijke maar vaak vergeten stap is om de doelstellingen van Lissabon te realiseren.

In deze paper zien we de ontwikkeling naar de kenniseconomie als een onvermijdbare tendens die van invloed is op allesteden. Deze tendens heeft enkele kenmerken die op zich niet nieuw zijn, maar de afgelopen tien jaar steeds sterker zijngeworden. In de kenniseconomie vormen kennis en informatie de belangrijkste input en output; informatie en kennis wor-den steeds sneller verspreid; de kenniseconomie is een netwerkeconomie, waarin onderlinge verbanden steeds belang-rijker worden; in de kenniseconomie worden ondernemerschap en innovatie hoog beloond; de kenniseconomie is heelvluchtig; en ten slotte is "kritische massa" in een toenemend aantal sectoren (onderzoek, biotechnologie) van belang.

Ondanks hun verschillen vormen stedelijke gebieden in vele opzichten brandpunten van de kenniseconomie. Vooral insteden wordt kennis geproduceerd, verwerkt, uitgewisseld en op de markt gebracht. Steden zijn het beste uitgerust meteen kennisinfrastructuur (universiteiten, andere onderwijsinstellingen, enz.); er woont vaak een hoger dan gemiddeld aan-tal goed opgeleide mensen; zij zijn het beste uitgerust met een elektronische infrastructuur; zij hebben een goede aan-sluiting op de mondiale economie via luchthavens; zij hebben de functie van locatie voor kennisuitwisseling en vanbroedplaats voor talent en nieuwe combinaties. Het is daarom geen toeval dat een groot aantal grotere steden in de jarennegentig een opmerkelijke opleving heeft doorgemaakt. Tegelijkertijd heeft de kenniseconomie de neiging een duale eco-nomie te produceren, met een toenemende polarisatie tussen enerzijds een klasse van goedbetaalde kenniswerkers enanderzijds een onderklasse van mensen die niet over de vaardigheden en middelen beschikken om deel te nemen. Dezepolarisatie wordt het sterkst ervaren in steden met een erfenis van in verval rakende industrieën, en neemt soms de vormaan van een duidelijke ruimtelijke afzondering.

In deze paper wordt aan de hand van een analytisch kader aangetoond dat er grote variaties bestaan tussen verschil-lende soorten steden, wat betreft hun economische potentieel en hun problemen op het vlak van sociale uitsluiting. Ditheeft gevolgen voor het beleid. Lokale actoren weten het beste wat de mogelijkheden en bedreigingen zijn. Daarom die-

nen nationale overheden gebruik te maken van de kennis, energie en netwerken van steden; nationale overheden en deEU zouden lokale actoren kunnen stimuleren regionaal beleid te ontwikkelen in publiek-private samenwerkingen, en ditbeleid op verschillende wijze ondersteunen. Dat kan door financiële stimulansen te bieden en regio's meer vrijheid tegeven om te experimenteren met wetgeving. Dezelfde, gedifferentieerde lokale benadering is nodig om problemen metsociale uitsluiting aan te pakken die verband houden met de opkomende kenniseconomie. De oorzaken van uitsluitingverschillen in de diverse lokale contexten, en elke stad dient haar eigen aanpak te ontwikkelen.

Een meer lokale benadering vraagt om sterkere bevoegdheden van beleidsmakers op lokaal niveau. Zij dienen meerbewegingsvrijheid te krijgen om innovatieve oplossingen te kunnen ontwikkelen. Om hen te stimuleren goede ideeën teontwikkelen en uit te voeren, is het daarnaast van belang dat lokale overheden en semi-overheidsorganisaties die ver-antwoordelijk zijn voor de lokale/regionale economische ontwikkeling een meer ondernemende houding aannemen.Tegelijkertijd dienen nationale overheden de moed te hebben duidelijkere keuzes te maken en hun investeringen daar teconcentreren waar de beste opbrengsten worden verwacht.

Stimulering en bevordering van regionale initiatieven is niet voldoende om de "toplaag" van de kenniseconomie te ont-wikkelen. Voor een steeds groter aantal activiteiten is er misschien slechts ruimte voor één of een paar toplocaties inEuropa, vanwege de kritische massa en de hoogte van de benodigde investeringen, en vanwege het ongekend complexeen specialistische karakter. Er moeten keuzes worden gemaakt. Europa is in dit opzicht succesvol geweest in de lucht-vaartindustrie (Airbus) en de bevordering van nucleair onderzoek (CERN). Een belangrijke vraag voor de beleidsmakersin Europa is hoe expertisecentra of -netwerken op Europees niveau opgezet of ondersteund kunnen worden. Indien Euro-pa er niet in slaagt meer van dergelijke centra te creëren, dan zal het talent en middelen blijven verliezen aan andere lan-den, met name aan de VS. Er moeten keuzes worden gemaakt: het huidige gefragmenteerde landschap van onder-zoeksfinanciering dient radicaal te veranderen. Meer coördinatie van onderzoeks– en innovatiebeleid binnen en tussenEU-lidstaten is noodzakelijk, en zal de steden in hoge mate ten goede komen.

In deze paper wordt gesuggereerd dat de kenniseconomie leidt tot verschuivingen in het stedelijke systeem van Europa.De beste kaarten lijken in handen te zijn van internationaal verbonden metropoolgebieden met een gevarieerde econo-mie, een sterke kennisbasis, en een hoge kwaliteit van leven. De positie van deze steden in vergelijking met andere zalwaarschijnlijk nog verder verbeteren: bij een toenemende internationalisatie van onderzoek en bedrijfsleven zijn hun cul-turele diversiteit en toegankelijkheid duidelijke voordelen om (buitenlandse) ondernemingen en mensen aan te trekken;daarnaast zullen zij ook profiteren van de tendens tot verbetering van de samenwerking tussen universiteiten en bedrijfs-leven, omdat zij sterk zijn in beide opzichten. Een belangrijke beleidsvraag voor nationale overheden is of zij de winnaarsmoeten ondersteunen of de verliezers moeten helpen: investeren in de reeds gedijende plaatsen, of in de zwakkere regi-o's. Het "ondersteunen van de winnaars" zou leiden tot een nog grotere concentratie van menselijk kapitaal en kennis-intensieve bedrijven in reeds dichtbevolkte metropoolgebieden: deze regio's zouden nog aantrekkelijker kunnen wordenvoor investeringen uit het buitenland. Maar concentratie heeft ook haar prijs, namelijk verstopping en verdringing. Zij kandaarnaast de kennisbasis van provinciesteden verder uithollen en het ruimtelijk evenwicht verstoren.

De positie van niet-metropole stedelijke regio's behoeft specifieke beleidsaandacht. Zij vormen een essentieel onderdeelvan het stedelijke systeem in Europa en hebben gewoonlijk een belangrijke functie voor grote achterlanden. Om de vita-liteit van deze steden te waarborgen, moet er beleid worden vastgesteld dat hun specifieke kwaliteiten versterkt. Indienoverheden een ruimtelijk evenwicht willen handhaven, zouden zij kleinere, niet-metropole steden kunnen aanmoedigenom specifieke kwaliteiten te ontwikkelen, en om strategische partnerschappen met andere steden aan te gaan. Of zij zou-den direct kunnen investeren in faciliteiten op gebieden waar de regio's potentieel hebben: daarmee kan kritische massaworden gegenereerd op specifieke terreinen, en daaraan bestaat steeds meer behoefte in de kenniseconomie.

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Bij het definiëren van de geografie van de kenniseconomie is het nuttig te denken in netwerken die bestaan uit knoop-punten en verbindingen. Liever dan ruimte te definiëren in termen van afzonderlijke steden of stedelijke regio's, zoudenwe regio's moeten uitdrukken in termen van toegang tot gespecialiseerde kennisbronnen. Als we op die manier naar hetstedelijke systeem van Europa kijken, zien we misschien grotere regio's met enorme kennisbronnen en potentieel. Indiendie bronnen beter op elkaar afgestemd worden, kan het potentieel ten volle benut worden.

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