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This paper examines the determinants of innovation behavior in European firms that are predominantly small and medium in size. The aim is to assess the absolute as well as the relative impact on innovation behavior of firm-specific (i.e., internal) factors on the one hand and region-specific characteristics on the other. Two hypotheses are advanced and tested. The first is that—contrary in part to some recent literature on regional and national innovation systems—firm-specific determinants of innovation are more important than either region-specific or external factors. The second hypothesis is that in high-tech regions dominated by a small number of very large firms the innovation behavior of the smaller firms is more strongly influenced by regional factors than by factors internal to the firm. Whereas the first hypothesis is confirmed by the empirical results presented here, the second is not. Because firm-level innovation determinants are of great importance in the European regions investigated in this study, we suggest that local innovation policy should focus more on the specific needs of small- and medium-sized enterprises (SMEs) in particular regions than on improving regional conditions for innovation in general. The analysis is mainly based on data from the European Regional Innovation Survey (ERIS) and includes information from more than 8,000 interviews with manufacturing firms, service firms, and research institutions in 11 European regions. The logit analyses reported in this paper used data from some 1,800 manufacturing firms. [ABSTRACT FROM AUTHOR]

This article analyzes the regional distribution and economic effect of the "creative class" on the basis of a unique data set that covers more than 500 regions in 7 European countries. The creative class is unevenly geographically distributed across Europe; the analyses show that a regional climate of tolerance and openness has a strong and positive effect on a region's share of these people. Regional job opportunities also have a large effect on the size of a region's population of the creative class. The findings reveal some evidence of a positive relationship among creative class occupation, employment growth, and entrepreneurship at the regional level in a number of European countries. On the basis of the analysis, however, it is not clear whether human capital, measured by creative occupation, outperforms indicators that are based on formal education, or if formal education has the stronger effect. [ABSTRACT FROM AUTHOR]