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THE URBAN SCENE OF INNOVATION In recent years we have seen an increased interest in the new role of cities in a dynamic and often globalizing business environment. Cities – or urban regions – are dynamic and self-organizing artifacts; they are the result of creative design, architectural implementation, land use policy and management of human resources within a cohesive framework imposed by their cultural and political history. Modem cities have become multi-faceted economic, social, cultural and environmental systems making up an organic assembly of multiple interacting subsystems. As a result, cities exhibit complex evolutionary patterns in which growth and decline are in turn present. The life cycle of cities thus, seems to demonstrate a stimulusresponse dynamics which is omnipresent in business life. Therefore, it makes sense to interpret urban dynamics in terms of a Schumpeterian search for new strategies that ensure continuity in changing – and often competitive – conditions [1]. Deliberate innovative strategies to rejuvenate city life are necessary as the challenges and problems facing cities are numerous, complex and difficult to manage. Examples are : the governance of balanced human co-existence in the city (e.g., social exclusion and high unemployment rates) and the management of urban capacity and density problems (e.g., urban environmental sustainability, urban traffic) [2]. In light of the great many challenges of the modern city, there is also a tendency to emphasize the new role of the city as the creator of a portfolio of locational opportunities (e.g., the agora city, the “glocal” city, the resourceful city, the learning city, etc.). The main question is of course whether sufficient and The Local Environment as a Supportive Operator in Learning and Innovation Marina van Geenhuizen and Peter Nijkamp 304 Entre la métropolisation et le village global effective governance strategies – in both the public and the private sector – can be developed that guarantee sustainable urban development [3]. In this context, it ought to be recognized that the city is a privileged spatial – economic actor as a result of scale and urbanisation advantages. A city is in principle able to produce positive externalities which favour innovative behaviour [4], in particular if multifunctionality , openness and spatial interaction is present. Thus, the functional network character of the city is decisive for its innovative potential. European cities are increasingly losing the protection provided by national borders. Vanishing borders mean the opening of regional economies to new networks and new social and economic influences, introducing particularly an increased competition between cities [5]. In a dynamic competitive environment, the generation and absorption of new technology and organisational innovation in the urban economy is of paramount importance for the future role of that city. At the same time, a strict environmental policy is needed to prevent that the basis for sustainability is eroded : non-sustainable urban growth implies by necessity that the whole urban economy will witness a process of socio-economic (and environmental) decay in the long run. It is, therefore, important to know in what way the local environment can contribute to learning processes in urban business locations that lead to innovation. A typical feature of present-day business is high uncertainty and risk, mainly due to the pervasive nature of new (generic) technologies, such as information and communication technology, biotechnology and new materials, and new modes of organisation and production. In addition, the increasing global competition and the shortening of technology life cycles have progressively increased the need for new knowledge. Accordingly, different kinds of knowledge are relevant for company managers : technical, commercial, managerial, and public policy (including mandatory requirements and potential sources for assistance). In a recently developed approach to urban and regional innovation, the focus of analysis is on the local environment as an uncertainty-reducing operator, or differently stated as a supportive operator in learning [6,7,8]. According to this approach, the mechanisms work through a collective and socialised process which allows for cost reduction and increase of effectiveness of decision-making in local firms. The uncertaintyreducing functions of the local environment broadly encompass the following activities : search for information, selection, signalling, transforming and transcoding of information, as well as the performance of control functions [7]. In approaches like this one, the role of tacit knowledge in uncertainty reduction and learning is often emphasized. Tacit knowledge – as an important vehicle for innovation – is wholly embodied in individuals and rooted in practice and experience. It is transmitted by apprenticeship and training by “watching and doing” forms of learning, strongly coloured by its social and cultural setting...

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