Evolving geographies of innovation: existing paradigms, critiques and possible alternatives

Abstract

Theory development on the geographies of innovation has been very successful in incorporating the changing patterns of knowledge dynamics due to globalization, lifting the gaze beyond processes of localized learning and increasingly acknowledging the multilevel, multiscalar governance of innovation. Arguably less attention has been directed to the changing qualities and impacts of innovation as a result of globalization, notably in view of social polarization and climate change. The aim of the article is to provide suggestions for how research on the geography of innovation can be improved by engaging with a more capacious understanding of innovation and territorial development. The authors explore how socio-ecological innovation can be introduced in contemporary discussions and practices of place-based smart specialization policy. They conclude by suggesting that future research should address and interrogate (1) the rise of the foundational economy as an expression of place-based innovation, which entails new forms of co-governance, and (2) the challenge of experimentalism in the public sector, a sector that looms large in lagging regions and the places that were deemed not to matter until they took their revenge on the mainstream political system.

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Evolving geographies of innovation: existing
paradigms, critiques and possible alternatives
Lars Coenen & Kevin Morgan
To cite this article: Lars Coenen & Kevin Morgan (2019): Evolving geographies of innovation:
existing paradigms, critiques and possible alternatives, Norsk Geografisk Tidsskrift - Norwegian
Journal of Geography, DOI: 10.1080/00291951.2019.1692065
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Evolving geographies of innovation: existing paradigms, critiques and possible
alternatives
Lars Coenen & Kevin Morgan
Lars Coenen, Melbourne Sustainable Society Institute, Faculty of Architecture, Building & Planning, University of Melbourne, Parkville VIC 3010,
Australia and Mohn Centre for Innovation and Regional Development, Western Norway University of Applied Sciences, Postboks 7030, NO-5020
Bergen, Norway; Kevin Morgan, School of Geography & Planning, CardiffUniversity, Glamorgan Building, King Edward VII Avenue, Cardiff,
CF10 3WA, UK
ABSTRACT
Theory development on the geographies of innovation has been very successful in incorporating
the changing patterns of knowledge dynamics due to globalization, lifting the gaze beyond
processes of localized learning and increasingly acknowledging the multilevel, multiscalar
governance of innovation. Arguably less attention has been directed to the changing qualities
and impacts of innovation as a result of globalization, notably in view of social polarization and
climate change. The aim of the article is to provide suggestions for how research on the
geography of innovation can be improved by engaging with a more capacious understanding of
innovation and territorial development. The authors explore how socio-ecological innovation can
be introduced in contemporary discussions and practices of place-based smart specialization
policy. They conclude by suggesting that future research should address and interrogate (1) the
rise of the foundational economy as an expression of place-based innovation, which entails new
forms of co-governance, and (2) the challenge of experimentalism in the public sector, a sector
that looms large in lagging regions and the places that were deemed not to matter until they
took their revenge on the mainstream political system.
ARTICLE HISTORY
Received 21 February 2018
Accepted 5 November 2019
EDITORS
Jan Hesselberg, Catriona
Turner
KEYWORDS
experimentalism,
foundational economy,
innovation, smart
specialization
Coenen, L. & Morgan, K. 2019. Evolving geographies of innovation: Existing paradigms, critiques and possible
alternatives. Norsk Geografisk Tidsskrift–Norwegian Journal of Geography Vol. 00, 00–00. ISSN 0029-1951.
Introduction
Innovation has become a global buzzword. It is some-
thing that many decision-makers in public and private
sectors aspire to as it is seen as a key determinant of
growth, both at the micro-level of individual firms and
at the macro-level of nations, regions and cities (Shear-
mur 2012). However, a more recent shift in policy
rationale for innovation can be observed. Increasingly,
the importance of innovation for wider societal goals
beyond economic growth, jobs and competitiveness is
being debated.
Schot & Steinmueller (2018) have recently suggested
three historical framings of innovation policy: inno-
vation policies 1.0–3.0. Innovation policy 1.0 –wherein
innovation policy is part and parcel of science and tech-
nology policy –has been primarily directed towards
research and development (R&D) based innovation,
drawing on a linear model of innovation that privileges
the technological discovery process. It emphasizes as a
rationale for policy the advancement and commercializa-
tion of scientific and technological knowledge. Inno-
vation policy 2.0, which is underpinned by the systems
of innovation approach and geared to objectives of econ-
omic competitiveness, growth and job creation, acknowl-
edges a broader knowledge base for innovation, supports
commercial use of a wider variety of knowledge and
seeks to strengthen the link between discovery and appli-
cation of knowledge. In Schot & Steinmueller’s account,
the most recent phase, innovation policy 3.0, involves the
explicit mobilization of science, technology and inno-
vation for meeting societal needs and addressing the
United Nation’s Sustainable Development Goals (Schot
& Steinmueller 2018). It addresses the issues of sustain-
able and inclusive societies at a more fundamental level
than previous framings or their associated ideologies
and practices.
While the debate on whether innovation policy 3.0 is
more than ‘old wine in new bottles’is currently raging
© 2019 Norwegian Geographical Society
CONTACT Lars Coenen lars.coenen@unimelb.edu.au
Norsk Geografisk Tidsskrift–Norwegian Journal of Geography
https://doi.org/10.1080/00291951.2019.1692065

(Fagerberg 2018), little attention has been paid to the
spatial and scalar differences and varieties of this latest
incarnation of innovation policy. At the same time, it
is fair to conclude that the widespread attention to inno-
vation in policy circles has been tightly wedded to
research on the geography of innovation, debunking
one-size-fits-all models and suggesting instead a place-
based approach (Tödtling & Trippl 2005; Barca et al.
2012). A geography, as Asheim & Gertler (2005) assert,
that is deeply uneven: innovative activity is not uni-
formly or randomly distributed across the globe but
tends to be spatially concentrated. Since the early
1990s, research on the geography of innovation has
shed light on the question of how nations, cities and
regions can generate the internal conditions and
dynamics necessary for innovation. At the same time,
the idea that cities, regions and spatial proximity are
essential for innovation has been evolving under the
weight of novel theorizing and empirical evidence (Mor-
gan 2004; Boschma 2005; Shearmur 2012).
Theorizing innovation geographies has been very suc-
cessful in incorporating the changing patterns of knowl-
edge dynamics, due to globalization lifting the gaze
beyond processes of localized learning and increasingly
acknowledging the multilevel, multiscalar governance
of innovation (Binz & Truffer 2017). However, in
doing so, research has been predominantly concerned
with rates and quantities of innovation (Sjøtun & Njøs
2019; Uyarra et al. 2019). Arguably less attention has
been directed to the changing qualities and impacts of
innovation as a result of globalization, notably in view
of social polarization and climate change. The aim of
this article is to provide suggestions for how research
on the geography of innovation can be improved by
engaging with a more capacious understanding of inno-
vation and territorial development. Through a critical
commentary and discussion of existing and emerging lit-
erature, we explore how socio-ecological innovation can
be introduced into contemporary discussions and prac-
tices of place-based smart specialization policy.
Evolution of regional innovation systems (RIS)
While the discourse on innovation may seem ubiquitous,
patterns of innovation remain concentrated in certain
sites and places, often emblemized by the epicentre of
technological revolution in Silicon Valley (Saxenian
1996; Miao et al. 2015; Pfotenhauer & Jasanoff2017).
It has become a truism that agglomeration and spatial
proximity are critical for innovation even though it is
equally accepted that these relationships are not univer-
sally positive but more nuanced and multilayered
than often assumed (Morgan 2004; Boschma 2005).
The significance of agglomeration and proximity are
now commonly accepted in the literature on the geogra-
phy of innovation dating back to the work of Alfred Mar-
shall in the early 1920s on the agglomeration advantages
of industrial districts (Asheim 1996), which was redis-
covered by the Italian theorists of the ‘Third Italy’(Bian-
chi 1998), rebranded by the work of Michael Porter
(Porter 2000) on clusters, and translated into strategies
of place-making for the creative class by Richard Florida
(Florida 2005). Spatial environments needed to come up
with new products and services, and new ways to
organize production and distribution of goods and ser-
vices are typically characterized by dense knowledge
pools, extensive networks and linkages, and supportive
institutional environments for risk-taking and entrepre-
neurship (Asheim & Gertler 2005).
Although a plethora of concepts describe and explain
the uneven geography of innovation (Moulaert & Sekia
2003), the regional innovation system (RIS) approach
can be seen as a synthesis of decades of research on the
topic (Cooke et al. 1997; Doloreux 2002; Asheim & Coe-
nen 2005; Isaksen et al. 2018; Asheim et al. 2019). At the
heart of the approach, innovation is conceptualized as a
relational, social and networked process between key
actors –firms, their supply chains, governments, and
universities –wherein institutions are guiding their
behaviour. In its capacity as an ordering framework,
RIS helps to describe and map the place-based structures
that condition innovation in a certain region and to
identify the presence of proximity advantages in a region.
In the early 2000s, the original RIS perspective was
criticized for being too bounded in its conception of
space (Bunnell & Coe 2001; Bathelt et al. 2004). Under
the influence of processes of globalization, it became
increasingly myopic and parochial in its delineation of
the analytical scope to consider only assets, resources
and processes of localized learning and innovation. In
response, regional innovation system analysis became
increasingly attuned to the influence of non-local net-
work linkages and the role of extra-regional institutions
(Cooke 2005; Moodysson et al. 2008; Martin & Moodys-
son 2013).
An important merit of the RIS approach has been its
fierce critique of ‘one-size-fits-all’models (Todtling &
Trippl 2005; Coenen et al. 2017). Instead, it offers a fra-
mework that captures the contextual, place-based nature
of innovation processes, often taking shape through var-
ious typologies (Cooke 2005; Asheim et al. 2015). It is
probably for this merit that the RIS approach has seen
a true proliferation in policy circles as a result of EU’s
smart specialization strategy (Camagni & Capello 2013;
Coenen et al. 2017; Morgan 2017; Uyarra et al. 2017).
Om this regard, all regional authorities are supposed to
2L. Coenen and K. Morgan

have in place regional development strategies that are
attuned to the specific conditions for innovation-based
development in their respective region in order to qualify
for EU cohesion policy funding –the world’s biggest and
most substantial territorial development policy. Smart
specialization is explicitly geared to do away with the
more generic, place-blind policy mobility to emulate
and transfer best-practice from successful regions such
as Silicon Valley, often resulting in the heroic but naive
effort to build high-tech cathedrals in the desert (Barca
et al. 2012). In arriving at place-sensitive smart specializ-
ation strategies, the RIS perspective has proven an indis-
pensable tool for analysing the specific conditions for
innovation in a region and designing place-sensitive
strategies.
The evolution of the RIS approach illustrates how
well-adapted and responsive theorizing the geography
of innovation has been to the changing patterns of
knowledge flows as a result of globalization. This is not
to deny that there are no more disputes and controver-
sies in the geography of innovation. As showcased by
the recently published handbook on the geographies of
innovation, edited by Richard Shearmur, Christophe
Carrincazeaux and David Doloreux (Shearmur et al.
2016), various areas of dispute keep the field far away
from turning into unified, homogenous body of knowl-
edge but one that highlight its pluralism and heterogen-
eity. The handbook identifies six areas of debate:
1. What is the most suitable focus of study or unit of
analysis for research on innovation geographies? Is
it a spatial unit such as a region or cluster or is it
the innovative agent, most often the firm?
2. Why study innovation geographies? Is it to be
informed about and inform individual agents loca-
tional strategies for innovation, as increasingly prac-
tised by economic geographers working in business
schools or is it to be informed about and inform inno-
vation-based local and regional development?
3. What kind of innovation should be studied? Is it new-
to-the-world innovation that is often highly visible
and impactful or is it small-scale incremental inno-
vation that determines firm adaptation and survival?
4. Can theorizing ‘successful’innovative regions be gen-
eralized to non-successful regions?
5. Should we primarily focus on the creation of inno-
vation or on the diffusion of innovation? What does
this tell us about the relationship between value cre-
ation and value capture from innovation?
6. To what extent are our theories on the geographies of
innovation biased by their spatial and temporal con-
text? Is there a bias towards the Global North? Why
are we primarily concerned with innovation in the
centres but at the expense of innovation in the
peripheries?
While addressing these questions would undoubtedly
produce highly insightful and resourceful findings on
the geography of innovation that would be of interest
far beyond the disciplinary realms of geographers and
the academic concerns of researchers alone, a fundamen-
tal question that is left unconsidered is ‘Why inno-
vation?’The contributions edited by Shearmur et al.
(2016) rather exclusively engage with the hegemonic
economistic rationale for innovation that it generates
growth and jobs, and is crucial for competitiveness.
Despite notable exceptions, the volume as a whole largely
shies away from reflecting on and scrutinizing the ques-
tion of for what, or rather for whom, is innovation good?
Taking the handbook edited by Shearmur et al. (2016)
as representative of the wider geography of innovation lit-
erature, we argue that the body of literature has been lim-
ited by a preoccupation with the conditions for
innovation, and skewed towards a particular kind of inno-
vation, namely market-based, technology-driven inno-
vation. This bias invites for some reflection on how this
partial engagement may have coloured our understanding
of the geography of innovation. Moreover, broadening
our understanding of what innovation is and why it mat-
ters opens up our perspective on where innovation hap-
pens and why there rather than elsewhere?
Questioning the purpose of innovation
Despite its increased knowledge and learning intensity,
our innovation-fuelled economies are facing some
intractable problems. The key challenge that comes to
mind to many, given recent extreme weather events, is
that of global warming and climate change. Notwith-
standing increased attention paid to greening the
economy and the widespread investment in clean tech-
nologies and eco-innovation, we are still on a crash
course towards destructive levels of temperature increase
(Rockström et al. 2016). Another problematic develop-
ment is one that is often referred to as runaway techno-
logical development (Karlsson 2007), which is illustrated
by the notion of smart cities and its Promethean prom-
ises to make our cities more sustainable, resilient and
liveable. The idea to increase the use of sensors and big
data to improve our urban systems of provision is facing
increasing opposition by urban dwellers. Instead of view-
ing smart urban technology as a means to improving
urban life, fear over loss of privacy and the risks of a sur-
veillance society have become increasingly prevalent
(Hollands 2008; Kitchin 2014). It seems that also in
other domains, such as the increased automation and
Norsk Geografisk Tidsskrift–Norwegian Journal of Geography 3

‘roboticization’of health-care services, driverless vehicles
and artificial intelligence, smart technologies increas-
ingly run the risk of turning the term ‘innovative’into
a misnomer (Karvonen et al. 2019). Common to the
aforementioned examples is that what is coined and
branded as ‘innovative’may be perceived by some as
turning innovation into solutions looking for a problem,
rather than the other way around.
1
In broad lines, three sub-bodies of literature can be
identified within innovation studies that have responded
to these fears and critiques of innovation: (1) a turn
towards responsible research and innovation; (2), a
turn towards mission-oriented innovation policy; and
(3) a more capacious understanding of innovation.
Responsible research and innovation
Responsible research and innovation (RRI) is in part a
policy concept and in part a theoretical construct with
a clear lineage back to the tradition of technology assess-
ment that had its heydays in the 1980s and 1990s (Schot
& Rip 1997). RRI seeks to give greater control over the
direction of research, technology development and inno-
vation to a broader group of stakeholders, most notably
the public. Following the definition of RRI suggested by
von Schomberg (2012, 54), as ‘a transparent, interactive
process by which societal actors and innovators become
mutually responsive to each other with a view to the
(ethical) acceptability, sustainability and societal desir-
ability of the innovation process and its marketable pro-
ducts’, it is not just an approach that advocates greater
democratic control over the desirability and outcome
of innovation, but does so by directly intervening in
the innovation process. Stilgoe et al. (2013) have further
suggested four criteria that are supposed to engender
responsible research innovation and research:
1. Anticipation to prompt researchers and innovators to
ask ‘What if?’questions
2. Reflexivity to hold a mirror up to one’s own activities,
commitments and assumptions in the innovation
process
3. Inclusion of ‘new voices’beyond the usual suspects in
the innovation process, notably to include members
of the wider public
4. Responsiveness to changes in the shape and direction
of innovation process that affect stakeholder and
public values, as well as responsiveness to changing
circumstances.
While there is little to comment on the ethical and nor-
mative soundness of the four criteria, we argue that the
trope of responsible research and innovation remains
limited in two ways. First, it primarily targets the design
and framing of research and innovation processes and
programmes but overlooks its implementation. It
remains surprisingly silent about the capabilities and
institutions needed to make it happen. Second, it (i.e.
trope of responsible research and innovation) tends to
‘black box’those who are supposed to constitute the
wider public and the new voices. Despite its thoughtful
guidelines, RRI remains a blanket approach, akin to a
one-size-fits-all framework that is in need of grounding
its global procedures to local circumstances.
The mission-oriented approach to innovation
policy
The mission-oriented approach to research and inno-
vation policy has been prominently advocated by Mari-
ana Mazzucato (2018a;2018b). The main contribution
of the approach is its ambition to bring innovation
back on track as a means to an end rather than an end
in its own right. Instead of assuming that all innovation
is desirable –as often seen in the systems of innovation
approach –the mission-oriented approach seeks to
attract greater explicit attention to the directionality of
the problem-solving process implied in innovation by
stating ex ante the problems that require to be solved
by innovators. As such, the mission-oriented approach
relates innovation funding directly to the grand societal
challenges such as climate change, ageing societies, the
refugee crisis, and food poverty. In doing so, it recognizes
the value of innovation beyond a strictly economic value.
However, in its implementation, the mission-oriented
approach remains heavily predicated on the notion of
the entrepreneurial state (Mazzucato 2015), as it assumes
a benevolent, well-endowed government in terms of
resources and capabilities to orchestrate and coordinate
collective action. This may be a heroic assumption
when acknowledging differences and diversity in govern-
ment capacity across countries and regions.
Both RRI and the mission-oriented approach to inno-
vation policy call for greater attention to directionality in
innovation processes and are more explicitly attuned to
the purpose of innovation. However, they are insensitive
to geographical context. We would argue that instead a
more capacious conceptualization of innovation would
be better suited, not only with a view to the desirability
of innovation but also with regard to appreciating the
spatial sensitivities of innovation.
A more capacious notion of innovation
New narratives of innovation are emerging that do not
depend on the conventional machinery of economic
4L. Coenen and K. Morgan

growth machines and many of these narratives can be
classified as socio-ecological models of innovation
(Healy & Morgan 2012; Truffer & Coenen 2012; Mar-
ques et al. 2018; Todtling & Trippl 2018). Although the
RIS3 guide to smart specialization (European Commis-
sion 2012) is largely predicated on a conventional science
and technology (S&T) model of innovation, a careful
reading of the guide reveals a somewhat schizophrenic
attitude because it contains not one but two models of
innovation. Apart from the explicit S&T model, which
encompasses both STI (science, technology and inno-
vation) and DUI (doing, using and interacting) modes
of innovation (Jensen et al. 2007) and innovation orig-
inating from differentiated knowledge bases (Asheim
et al. 2017), another model of innovation can be dis-
cerned in the RIS3 guide (European Commission 2012)
–one that can be called the ‘socio-ecological model’.
This implicit model deserves to be given more promi-
nence because its ends are very different to the explicit
model in the sense that they are not the instrumentally
significant ends of economic competitiveness, but rather
the intrinsically significant ends of human needs and
ecological integrity. As stated in the guide,
In the Open Innovation era, where social innovation and
ecological innovation entail behavioural change at the
individual and societal levels if the challenges of health,
poverty and climate change are to be addressed, the
regional governance system should be opened to new sta-
keholder groups coming from the civil society that can
foster a culture of constructive challenge to the regional
status quo. (European Commission 2012,37)
The RIS3 guide further states that ‘social innovation is
important for regional development’because, as well as
creating new business opportunities, it can ‘provide
new perspectives to citizens, and help the modernisation
of the public sector’(European Commission 2012, 112).
Forey et al. state, that in the socio-ecological model,
[the] public sector is central in the delivery of many ser-
vices of social and economic value. In this regard, it has a
pivotal role in answering …today’s major societal chal-
lenges such as demographic ageing, increased demand
for healthcare services, risk of poverty and social exclu-
sion, the need for better and more transparent govern-
ance, and a more sustainable resource management.
(European Commission 2012, 113)
Particularly the social innovation literature, pioneered by
Moulaert and colleagues, among others, has explicitly
pitched social innovation in contrast to technological
innovation, rather than seeing it as a continuum (Mou-
laert et al. 2013). We argue that this dichotomy ‘throws
the baby out with the bath water’and grossly understates
the enabling potential of technology and the knowledge
intensity of such ‘other’forms of innovation, such as
grass-roots innovation (Seyfang & Smith 2007) which
is exemplified by community energy initiatives, sharing
economy schemes, and recycling workshops, as well as
social innovations such as affordable housing initiatives,
time banks and community currencies.
Still, there are various differentials between conven-
tional innovation and more capacious, socio-ecological
understandings of innovation (Weber & Rohracher
2012; Coenen et al. 2017;2018; Schot & Steinmueller
2018; Diercks et al. 2019; Grillitsch et al. 2019). First,
socio-ecological models draw attention to other innovat-
ing agents (not just actors), including the firm but also
beyond it. Second, they emphasize that the purpose of
innovation is not limited to achieving competitive
advantage in the market-place but view the rationale
for innovation explicitly in response to social needs
and often informed by ideological norms and values.
Third, socio-ecological models understand the process
of innovation to move beyond the exploration and
exploitation of knowledge but explicitly recognize inno-
vation as an act of deliberative, collective problem-
solving. Moreover, they acknowledge the experimental
nature of innovation, understood as a deeply uncertain,
open-ended process of trial-and-error, also referred to
as bricolage. Fourth, while the socio-ecological models
acknowledge that innovation involves interactive learn-
ing, the relationships between actors are less transac-
tional but explicitly transformational. Particularly
social innovation actively promotes inclusive relation-
ships among individuals. Fifth, whereas orthodox inno-
vation tends to treat institutions as largely facilitative
and/or constraining but in doing so treating institutions
as largely static and inert, more capacious conceptualiz-
ations of innovation draw attention to institutional
entrepreneurship operating in tandem with technologi-
cal change and, very importantly, are mindful of the poli-
tics, conflicts and contestations implied in innovation.
Especially the latter is a notorious blind spot in many tra-
ditional studies of innovation. Lastly, it is still a challenge
to identify the policy implications and policy instru-
ments to stimulate ‘alternative’forms of innovation
that stand in contrast to the proven policy prescriptions
of fixing market and/or system failure in orthodox
innovation.
Given the significance and importance of policy rel-
evance for innovation studies in general and research
on the geography of innovation more specifically, as
well as the paradoxical critique that policymaking pro-
cesses and governance of innovation have remained
somewhat ‘black boxed’in innovation studies (Flana-
gan & Uyarra 2016), it is worthwhile to expand further
on the last aspect. We therefore continue this article
with an exploration of how socio-ecological innovation
Norsk Geografisk Tidsskrift–Norwegian Journal of Geography 5

could be introduced into contemporary discussions
and practices of place-based smart specialization pol-
icy. In the next section we explore two important
aspects of such governance by examining (1) the rise
of the foundational economy as an expression of
place-based social innovation, which entails new
forms of co-governance, and (2) the challenge of
experimentalism in the public sector, a sector that
looms large in lagging regions and the places that
were deemed by conventional wisdom not to matter
until they took their revenge on the mainstream politi-
cal system (Rodríguez-Pose 2018).
The foundational economy as a place-based
social innovation
Social innovations are social in both their ends and their
means; in other words, ‘they are innovations that are
both good for society and enhance society’s capacity to
act’(European Commission 2012, 112). One of the
most progressive models of social innovation today is
the foundational economy model, which carries enor-
mous implications for a place-based approach to inno-
vation, development and territorial politics (Bentham
et al. 2013; Fairbrother 2017). In contrast to conventional
models of innovation, which are primarily focused on
the fashionable high-technology sectors of the knowl-
edge economy, the foundational economy model focuses
on the unfashionable mundane sectors that are designed
to keep us ‘safe, sound and civilized’, such as health,
education, dignified care for the elderly, social housing,
agrifood, and energy (Marques et al. 2018).
The foundational economy includes goods and ser-
vices, which are the social and material infrastructure
of civilized life because they provide the daily essentials
for all households. These include material services via
pipes and cables, networks and branches that distribute
water, electricity, gas, telecommunications, banking ser-
vices and food, and the providential services of primary
and secondary education, health and care for children
and adults, and income maintenance (Engelen et al.
2017). Foundational goods and services are purchased
from household incomes or provided free at point of
use from tax revenues. The state is often a direct provider
or as funder, with public limited companies and outsour-
cing conglomerates increasingly delivering foundational
services. The requirement for local distribution makes
foundational activity immobile and much is protected
from global competition by regulatory requirements for
infrastructure investment, planning permission or gov-
ernment contracts (Barbera et al. 2018). Foundational
thinking rests on two key ideas, which break with estab-
lished ways of thinking and challenge taken-for-granted
assumptions about economy, society and politics
(Foundational Economy Collective 2018):
1. The well-being of citizens depends less on individual
consumption and more on their social consumption
of essential goods and services, ranging from water
and retail banking to schools and care homes. Indi-
vidual consumption depends on market income,
while foundational consumption depends on social
infrastructure and delivery systems of networks and
branches that are neither created nor renewed auto-
matically, even as incomes increase.
2. It follows that the distinctive, primary role of public
policy should be to secure the supply of basic services
for all citizens, not just a quantum of economic
growth and jobs. If the aim is citizens’well-being
and flourishing, then politics at national and subna-
tional levels need to be refocused on foundational
consumption and securing universal minimum access
and quality. When government is unresponsive, the
impetus for change will have to come from engaging
citizens locally and regionally in actions that have the
virtue that they break with the top-down politics of
‘vote for us and we will do this for you’.
From a geographical standpoint, one of the most radical
implications of the foundational economy perspective is
that it inverts and disrupts conventional thinking about
place-based development. Much of the latter thinking,
especially with respect to lagging regions under neolib-
eral modes of governance, revolves around the attraction
of inward investment to boost the local economy and this
entails locational tournaments as cities and regions seek
to outbid each other in a subsidy-fuelled race to the bot-
tom (Pike et al. 2007). In spatial terms, this race to the
bottom amounts to a zero-sum game because success
for one region spells failure for all the other regions
that were vying for the mobile investment.
In sharp contrast to the zero-sum game, the founda-
tional economy constitutes a positive-sum game because
all cities and regions have a significant stock of employ-
ment in the mainstream foundational sectors, since they
tend to be distributed by population rather than by
wealth. Employment in the foundational economy
tends to be as much as 30–40% or more of total employ-
ment, especially in lagging regions, and therefore it plays
an intrinsically significant role in meeting human needs
(Foundational Economy Collective 2018). In other
words, the foundational economy approach is analogous
to the status of public goods, which are deemed non-riv-
alrous because the fact that region ‘A’has them does not
mean that region ‘B’has been denied them. Promoting
the growth of the foundational economy breaks with
6L. Coenen and K. Morgan

the conventions of locational tournaments and zero-sum
games and reduces the scope for territorial competition
between cities, regions and countries.
Although the foundational economy seemingly could
be juxtaposed with the technology generating sectors of
the knowledge economy, we argue that –similar to the
notion of low-tech (Hansen & Winther 2011)–all foun-
dational sectors are extensive technology using and
knowledge-intensive sectors, and therefore the founda-
tional economy perspective should not be dismissed as
being inherently Luddite or antithetical to technology
per se. In employment terms, one of the main tasks
facing the foundational economy is to upgrade the
terms and conditions of work, especially in sectors
such as care for the elderly, which are high in social
value but low in economic reward, and this can only
be done through social innovation at the societal level
by national governments and civil societies agreeing to
view and value such work in more rewarding ways,
given its significance to human well-being (Bentham
et al. 2013).
Nonetheless, there is still considerable ambiguity with
regard to role of innovation in a foundational economy.
Further empirical and theoretical research is needed to
address a range of fundamental questions that so far
have not been addressed in the emerging literature on
the foundational economy. Despite differences in nor-
mative underpinnings, the RIS framework could be
potentially instructive in framing the following questions
and allowing for place-based and spatially comparative
studies: Who are the innovating agents in the founda-
tional economy? What characterizes the networks and
institutions that enable and constrain innovation in the
foundational economy? How is innovation in the foun-
dational economy different from innovation as we
know it in the knowledge economy? How do regional
characteristics condition the possibilities for advancing
principles of the foundational economy? In the next sec-
tion, we present a discussion in which we tease out some
of the governance aspects of the foundational economy.
For all its advantages, the foundational economy
perspective is politically challenging on three counts:
(1) it is constrained by the fact that treasuries are averse
to raising tax income to provide revenue support for
public services such as education, health and social
care; (2) it presupposes that governments are prepared
to engage in radical re-regulation to raise the social ‘ask’
of the private firms and public agencies that deliver
foundational services; and (3) it is predicated on the
concept of active citizenship inasmuch as citizens are
deemed to be willing and able to become co-producers
of the essential services that they collectively consume
(Morgan 2018).
The challenge of experimentalism in the
public sector
One of the great paradoxes of the ‘age of austerity’is
that many governments are promoting mission-driven
innovation at the same time as many of them are
shrinking the state, an ideological quest that runs coun-
ter to the fact that the state looms large in many of the
societal sectors facing challenges (e.g. energy, food,
transport, and public health) and in which such mis-
sions feature most prominently (Mazzucato 2018a).
Even so, the rapid growth of public sector innovation
(PSI) labs is one of the most tangible signs that govern-
ments at all levels of the multilevel polity are seriously
trying to grapple with the challenges of novelty and
transformation. The UK innovation foundation Nesta
is one of the most prominent pioneers of public labs
as a means of addressing societal challenges through
evidence-based local experiments (Morgan 2018).
GeoffMulgan, its chief executive, has documented the
growth of the lab movement and argues that such labs
need to be both insiders and outsiders at the same
time, which means they face the classic ‘radical’s
dilemma’:
If they stand too much inside the system they risk losing
their radical edge; if they stand too far outside they risk
having little impact. It follows that the most crucial skill
they need to learn is how to navigate the inherently
unstable role of being both insiders and outsiders;
campaigners and deliverers; visionaries and pragmatists
(Mulgan 2014)
Although there is no concise definition of a PSI lab,
Mulgan suggests that it might include ‘experimentation
inasafespaceatoneremovefromeverydayreality,
with the goal of generating useful ideas that address
social needs and demonstrating their effectiveness’
(Mulgan 2014).
Working at ‘one remove from everyday reality’might
allow PSI labs to introduce innovations at a small scale
into, for example, certain public service niches, but this
would still leave as unresolved the larger question as to
how the niche-level service innovations would be scaled
up in the mainstream public sector, a question that bede-
vils all transitions from local social innovations to sys-
temic innovation (Geels et al. 2008; Bugge et al. 2017).
Although the barriers to scaling up are many and varied,
depending among other things on national context, the
public sector in most countries is invariably beset by a
number of common problems. Three of these common
problems merit special attention because they seem
deeply entrenched in the public sector culture of
most countries, namely feedback, failure and learning
(Morgan 2018).
Norsk Geografisk Tidsskrift–Norwegian Journal of Geography 7

Feedback, failure and learning in
experimentalism
Although the significance of reliable feedback is widely
acknowledged, especially in evolutionary theories of
change, it is also widely assumed that such feedback is
readily available. However, the truth of the matter is
that feedback is filtered and tempered by a whole series
of factors, such as power, status, hierarchy, fear, and
ambition (Picciotto, 2015). That ‘whistleblower’laws
have been introduced in many countries to help public
sector workers find their ‘voice’clearly speaks volumes
for the fact that feedback faces formidable obstacles
and on no account should it be assumed to be easily
forthcoming.
If feedback is hard to manage, failure is even more
difficult to accommodate, especially in the public sector,
in which taxpayers’money is at stake (Coenen 2018).
Failure in the public sector can spell disaster for man-
agers and their political masters. Advocates of new
industrial policy, such as Dani Rodrik, are undoubtedly
right to argue that we need to have a higher tolerance
of failure because it is part and parcel of experimentation
and innovation and therefore the aim should be not to
try to outlaw mistakes but to reduce the costs of mistakes
by learning from them and by learning to ‘fail faster’
(Rodrik 2004). To have a more enlightened understand-
ing of failure in the public sector, policy innovators will
need to mobilize a wider constituency so as to include
such groups as public auditors, legal advisers and of
course politicians, the very people that are responsible
for fuelling the risk-averse culture that stymies inno-
vation in the public sector.
Last but not least, the public sector will need to allo-
cate more space, time and resources to learning about
what works where and why, if policy experimentalism
is to have practical traction, because monitoring and
evaluation are still seen as low status activities (Smeds
& Acuto 2018). The barriers to organizational learning
in the civil service –silo structures, staffturnover,
ineffective mechanisms to support the acquisition and
dissemination of good practice, and the lack of time
devoted to learning –are common to the public sector
in many countries and these features are manifestly at
odds with the assumptions of smart experimentalism
(Morgan 2017).
Place-based experimentalism
One possible way to overcome the deeply entrenched
systemic barriers is to insist on a more concerted appli-
cation of the place-based approach advocated a decade
ago by Fabrizio Barca (Barca 2009). The place-based
approach, we might recall, is predicated on a number
of key propositions, two of which are highly pertinent
to the experimentalist perspective. The first is that geo-
graphical context really matters, and context is under-
stood in the multidimensional sense to include social,
cultural, political, and institutional specificities (Bentley
& Pugalis 2014). The second proposition is that also
knowledge and power matter in the design and
implementation of territorial policies: the role of multile-
vel governance is critically important in this respect
because no single level of government has sufficient
knowledge to know what works where and why, hence
the need for local knowledge to be elicited from local
actors and for extra-local knowledge (and pressure) to
be brought to bear if and when local elites are unable
or unwilling to tackle the ‘persistent underutilization of
potential’(Barca 2009,vii).
In the multilevel architecture, as the Barca Report
conceives it, the upper levels of government are supposed
to set the general goals and the performance standards to
establish and enforce the ‘rules of the game’, while the
lower levels have ‘the freedom to advance the ends as
they see fit’(Barca 2009, 41). The ultimate purpose of
exogenous intervention in this scenario is to induce
local agents to commit their energy, knowledge and
resources to tackling untapped potential in their terri-
tory. However, what if they fail to do so by engaging
instead in rent-seeking and gaming the system? Accord-
ing to Barca (2009), the antidote to this risk is to utilize
the key principles of democratic experimentalism as
developed by Sabel & Zeitlin (2012), namely to make
the local decision-making process verifiable, open, exper-
imental, and inclusive. In other words, the following
principles should be established (Barca 2009, 45):
.a clear identification of objectives and standards,
measured by validated indicators, which can be com-
pared with what happens elsewhere and which are
open to monitoring and public debate
.a permanent mobilization of all interested parties,
stimulated by exogenous interventions, by the injec-
tion of information on actions and results
.an experimental approach through which collective
local actors are given an opportunity to experiment
with solutions while exercising mutual monitoring,
and alternative measures are tried and compared
through a systematic learning process, in which the
results are used to design new interventions.
In specifying the above principles of the place-based para-
digm, the Barca Report (Barca 2009) acknowledges the
early work on experimentalist governance thinking by
Sabel & Zeitlin, the most recent and most elaborate
8L. Coenen and K. Morgan

treatment of which was published in 2012 (Sabel & Zeitlin
2012). Sabel & Zeitlin’s early work appealed to Barca pri-
marily because it combined bottom-up localism and
agent empowerment with the top-down pressure for stan-
dards, testing and the dissemination of the results of loca-
lized learning beyond the confines of the locality. The fact
that this place-based approach has not yet delivered the
anticipated dividends reflects the deeply entrenched nature
of the above-mentioned public sector barriers. The impli-
cation is that we should redouble our efforts to address
these barriers through more concerted multilevel action
rather than jettison the multiscalar place-based approach.
The foundational economy is one example of a more
capacious conception of innovation and its fortunes
depend heavily on a combination of social innovation
in civil society and smart experimentalism in the public
sector, particularly from state sponsorship at all levels of
the multilevel polity. Although this vision might seem
remote from conventional models of innovation, we
would argue that it is already present in smart specializ-
ation policy thinking and practice (European Commis-
sion 2012), in which it appears as part of a socio-
ecological model of innovation. We need to distinguish
these two models of innovation, the conventional and
the capacious, because they carry radically different pol-
icy implications. The conventional smart specialization
policy repertoire enjoins regional policymakers to parti-
cularize their regional economies by differentiating their
activities for the sake of competitive advantage. However,
the logic of the foundational economy enjoins policy-
makers to universalize their regional economies for the
sake of sustainability and human well-being. Because
the foundational economy furnishes the infrastructure
of everyday life –the material goods and providential
services that are essential to human well-being in every
city and region –it signals what people and places
have in common and not what casts them as rivals.
Conclusions: implications and rethinking the
geography of a broader understanding of
innovation
By way of recap, the aim of this article has been to provide
suggestions for how research on the geography of inno-
vation can be improved by engaging with a more
capacious understanding of innovation and territorial
development. In this article we have explored how
socio-ecological innovation can be introduced in contem-
porary discussions and practices of place-based smart
specialization policy by suggesting a future research that
addresses and interrogates (1) the rise of the foundational
economy as an expression of place-based social inno-
vation, which entails new forms of co-governance and
(2) the challenge of experimentalism in the public sector,
a sector that looms large in lagging regions and the places
that were deemed not to matter until they took their
revenge on the mainstream political system.
This brings us to the spatial implications of a more
capacious conceptualization of innovation. First, in rais-
ing the question of where does innovation happen, it lifts
the gaze beyond an identification and mapping of clus-
ters and networks of knowledge-intensive organizations
and individuals. In addition to this supply-based focus,
it also draws attention to mapping, in which collective
articulations of unmet needs in relation to social and
environmental challenges meet innovative, problem-
solving capabilities and how these processes of interme-
diation are organized, governed and funded across space.
Second, with regard to the question of how to govern
place-based innovation there is a need to transcend the
common preoccupation with agglomeration economies
in ‘the places that matter’, to reach a greater appreciation
of how spatial context enables and constrains the messy
process of experimentation.
As a deliberative mode of governing innovation,
experimentation allows for a more direct engagement
with the challenge-driven ambitions targeting wicked
problems as laid out in contemporary innovation policy
thinking. Rather than emphasizing the entrepreneurial
discovery process underpinning the identification of
strategic avenues for place-based innovation, which
runs the risk of becoming captured by rent-seeking inter-
ests of incumbent and elites, it suggests that prioritiza-
tion for development and innovation is based on
principles of empowered deliberative democracy. This
means focusing on specific, tangible local problems high-
lighted by the foundational economy, such as drought,
ageing societies or economic hardship due to the disap-
pearance of local industries and involvement of ‘ordinary
people’affected by these problems as well as problem-
solvers, and an emphasis on deliberative development
of solutions to these problems. Experimentation would
then emphasize selection and investment in innovation
opportunity as an outcome of brokering and aligning
demand and supply for innovation, rather than an exclu-
sive focus on the supply side of the innovation system.
Thus, the incentive for problem-solving and innovation
would not be based on entrepreneurial opportunity
alone but would also extend towards an articulated
demand for ‘real’local problems.
Thus, implementation of innovation projects approxi-
mates the notion of living labs understood as sites
devised to design, test and learn from innovation in
real time in order to respond to particular societal, econ-
omic and environmental issues. It emphasizes exper-
imentation understood as collective search and
Norsk Geografisk Tidsskrift–Norwegian Journal of Geography 9

exploration processes in which a broad suite of stake-
holders such as firms, universities and actors from gov-
ernment and civil society are navigating, negotiating
and ideally reducing uncertainty about innovations
through real-world experiments, and gaining knowledge
and experience along the way in an iterative learning-by-
doing and doing-by-learning process.
Finally, experimentation would acknowledge insights
from experimentalist governance that argues that exper-
imentation is only meaningful in a multilevel policy archi-
tecture, as this allows for monitoring, evaluating and
translating lessons learned from local experiments beyond
its own local, territorial context. This implies that smart
experimentation only makes sense in relation to supra-
regional or networked governance structures, as they
allow for the ‘learnings’from experiments to institutiona-
lize, scale or diffuse, regardless of whether the ‘learnings’
are derived from successful or failed innovation.
We are not suggesting that experimentation should be
seen as a governance panacea to the economic, social,
political, and environmental challenges surrounding
innovation in and across different spatial contexts.
There are many unresolved debates and looming ques-
tions, particularly with regard to the ‘dark sides’of
experimentalist governance in terms of potentially fuel-
ling greater spatial and social inequality, insecurity, and
the rise of a precarious economy.
Note
1. Related to this discussion, the traditional geography of
innovation literature, until fairly recently and not with-
standing an early warning by Lundvall (1996) has been
more or less quiet on the uneven distribution of costs
and benefits of innovation (e.g. Dahl 2011; Breau et al.
2014; Florida & Mellander 2016).
Acknowledgements
The authors are grateful for comments from two reviewers,
Guest Editor Jan Hesselberg, Editor-in-Chief Kerstin Potthoff,
Bjørn Asheim, Robert Hassink, Brendan Gleeson, and Teis
Hansen. Lars Coenen gratefully acknowledges financial sup-
port from the City of Melbourne and the Department of
Jobs, Precincts and Regions, State of Victoria, Australia.
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