Correlating the Knowledge-base of Cities with Economic Growth.

The competitive advantage of cities in the developed world is increasingly thought to lie in their superior access to the knowledge-base. The generation of new knowledge through investment in research and development leads to new products, services and processes which form the basis of the new economy. Attempts to correlate knowledge creation with economic growth have therefore tended to use R&D measures such as the numbers of research establishments in a rather narrow sense. This paper develops a much wider measure of the knowledge-base comprising tacit knowledge, codified knowledge and knowledge infrastructure for 19 European cities. With the exception of the two world cities, London and Paris, which significantly underperform, there is a broad relationship between the quality of the knowledge-base and economic change as measured by the competitive shift-share residual. [ABSTRACT FROM AUTHOR]