Knowledge Production in Swedish Functional Regions 1993-1999

Industrial classifications offer arguably poor schemes for classifying innovative activity. Moreover, a single measure incorporating technological relatedness between the inherent classes, captures the neglected issue of Jacobs (1969) and Marshall (1920), that the degree of relatedness of activities is an important determinant for development. Based on these observations, this paper uses a measure of technological relatedness, calculated from the frequency of patent co-classification to predict the importance of diversity or concentration of technologies for patent development in Swedish regions. Results strongly support that the likelihood of innovating is raised in regions with high technological diversity.