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innovation policies since their aim became partly the same, namely supporting the
innovative capabilities and thus competitiveness of SMEs. It also fits into what
Amin ( 1999 ) observed as a shift from a firm-centred, incentive-based, state-driven
and standardised regional economic development policies to bottom-up, region-
specific, longer term and plural-actor policies. These policy trends cannot only be
seen in European countries, but also in North America and some countries in Asia
(OECD 2011 ). Although we can therefore speak of a general phenomenon, there
are of course large differences between individual regions and countries con-
cerning the extent to which these trends take place. Generally, contributive factors
to regional innovation policies are a federal political system, decentralisation,
strong regional institutions and governance, a strong industrial specialisation in the
region, socio-cultural homogeneity and thus relationships of trust, large economic
restructuring problems and a strong commitment of regional political leaders.
One of the main strengths of the regional level for innovation support has been
called the ''garden argument'' (Paquet 1998 ): if the economy is regarded as a
garden with all kinds of trees and plants, for the gardener (government) there is no
simple rule likely to apply to all plants. Growth is therefore best orchestrated from
its sources at the level of cities and regions. At this level, rather than at the national
level, policymakers can better tailor policy in relation to demand (Nauwelaers and
Wintjes 2003 ; Lagendijk 2011 ). Regionalisation, therefore, allows for differenti-
ation in policies, which is necessary because of differing regional economic
conditions and institutional settings, thus different support needs of industries and
firms. Regionalisation also raises the enthusiasm and motivation of regional pol-
icymakers, as they are now able to devise ''their own'' policies. Moreover, because
of the large variety of institutional set-ups and initiatives in Europe and North
America, these laboratories of experimentation offer both national and regional
policymakers plenty of institutional learning opportunities (Hassink and Hülz
2010 ).
Closely related to this ''garden argument'' is the positive relationship between
institutional embeddedness in regions, entrepreneurial learning processes and
competitiveness (Lorenzen 2001 ). For their competitiveness firms depend on
innovation processes. In order to come to such innovation processes firms have to
exchange information and reproduce this information into knowledge, in other
words they have to learn. Due to an increasing cut-throat competition and shorter
product life cycles, firms, particularly SMEs, are increasingly dependent on
information and knowledge sources that are only available outside the firm. Firm
innovation processes therefore increasingly take place in interaction with other
organisations, be it with other business partners, such as customers, suppliers or
competitors or with public research establishments, higher education institutes,
technology transfer agencies and regional development agencies. Innovation
processes hardly ever take place in isolation any more. Innovations can thus be
understood as manifest results of cumulative learning processes of firms. The
spatial environment provides different institutional contexts for interactive learn-
ing. These contexts differ not only nationally, but also regionally and locally from
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