José Luis González Pernía, Aloña Martiarena Arrizabalaga, Mikel Navarro Arancegui e Iñaki Peña Legazkue

A study on innovation capacity and entrepreneurial activity at a sub-regional level: The case of the Basque Country

We aim at gaining our understanding on the relationship between innovation capacity, entrepreneurial activity and regional competitiveness at a sub-regional level, by taking into account the heterogeneity of inner locations within a region. Our results show, on the one hand, that high and rapid growth firms benefit from local agglomeration economies which lead to incremental innovation-type R&D activities (i.e., exploitation of synthetic-knowledge) emerged in non-metropolitan areas where new ventures are more focused on `Development´ activities rather than on `Research´ activities. On the other hand, ventures located in metropolitan areas are more related to `Research´ activities (i.e., exploration of analytical-knowledge leading to radical innovation) which particularly take place in universities and technology centers sited in urban (or nearby) areas. Any advancement on regional development will depend on a balanced concentration of different types of innovation and entrepreneurial activities at a sub-regional level considering the idiosyncrasy and singularity of each sub-region.