recently. Basically, this concept aims at redefining the role of a region in innovation processes,
to abandon the political focus on local and regional innovation networks (Asheim & Isaksen,
2002). It goes to the extent of bringing territorial innovation theories up to date. Geographical
proximity is imperative in regional Innovation System as unstated information can be shared
easier when actors of the innovation process are in a suitable detachment.
In addition, intensification of reliance between individuals of modernism needs constant
interactions which can be made easier by close relationship. This entails that limited to a small
area interaction can be reinforced by socio-cultural principles like customs which are entrenched
in a geographical area. Agglomeration is another entity that enables geography to influences
regional innovation systems is that it forces contribution to knowledge infrastructure by
concentrating universities, research centers; easier access to rules and regulations (Acs, 2000).
Basically, this entails that the shorter geographical distance between participants, the less the
coast of exchange knowledge and information and the faster communication between actors.
Another issue that influences regional innovation system is cognitive proximity. It shows that too
little cognitive proximity leads to misunderstanding and too much may cause a problem of lockin.
The outcome of cognitive geography is usually that one is not able to notice possibilities
on new technologies and markets as routines that are within an organization. Organizational
proximity is another issue that denotes the extent within relations taking place between actors in
a firm setting. Basically, this tends to depend on the rank of the autonomy which the cooperating
actors acquire. In addition, there is social proximity which is a social embedded relation that is
between actors at the micro-level (Cooke and Morgan, 1994). This is where socially embedded
relations are meant to be understood as relationships that are based on trust constituted of
friendship and past experiences. Therefore, too little social proximity may result in a decline of
the innovation capacity of firms caused by lack of trust and commitment and too much can
Geography in regional innovation system has shed new light on historically contigent
regional preconditions for innovation and economic growth, and has also revealed a weakness
in established systemic approaches to innovation attributes to their often limited appreciation
of these path dependencies (Andersson and Karlsson, 2002). In essence, this entails that the
geography of regional innovation system tends to draw attention to the demarcation, overlap and
relationships with extra-regional actors, networks and institutions.
The development of information and interaction technologies is another reason as to why
the role of geographical distance in regional innovation systems is perceived as diminishing by
scholars. This is so as the appearance of ICT changed the methods of generating, storing and
knowledge. Face-to-face interaction can be substituted by communication via virtual proximity
as there is technology. In addition, ICT increases the chances of changing tacit knowledge into
codified knowledge. Essentially, this shows that technological evolution has led to increase in
mobility of individuals and facilitated temporary geographical proximity.
Generally, geography matters as the idea behind territorial innovation models, stating that
the key factor of the growth and competitiveness is to be seen in local environment and
geographical proximity. it is beneficial for the transfer of knowledge and innovation processes.
This is so as the development of ICT facilitates the transfer of knowledge over long distance at
low cost and accelerates the codification of knowledge. In addition, the claim that geographical
proximity, regional and local levels still matters as it has proponents. Virtual proximity is not
able to be a surrogate for geographical proximity concerning transactions that are characterized
by ambiguity and complexity (Autio, 1998). Another aspect is that establishment of social
relations and community’s development from scratch cannot be done relying on new
technologies in the initial stages.
It is perceived that the role of geographical proximity in an organization’s innovation
performance depends on the firm, the size of the firm, and the target to which the distance is
considered. Geographical proximity positively influences the propensity of small firms to
collaborate with universities, where as for large firms the distance is less important because the
collaboration with world-class science is more valuable for them. Territorial closeness to other
firms improves innovation productivity of software firms and closeness to their clients does not
matter for their innovation performance. With regard to distance to investors, spatial proximity
impacts the likelihood of investments and is especially imperative for less experienced venture
capitalists. Thus, technological evolution has facilitated communications between actors of
Globalization and technological evolution influence the role of spatial distance in
innovation processes but local environment is still imperative for local firms. This is based on
the aspect of presence of close knowledge networks and institutional assistance. This is so as
geographical closeness used to be perceived as an essential circumstance to share implicit
knowledge and to improve trust among investors. Furthermore, it is very important to lend a
hand both within the local network region and with far-away partners. This will contribute to
establishment of territorial innovation models as open systems that are unavailable in interactive
learning by global connectivity (Autio, 1998). This is the case as scientists have emphasized the
local character of innovation processes and have perceived the region as a locus of innovation.
Problems that Regional Innovative Systems face
Although regional institutional framework is perceived as being highly influential for the
way actors perform, such regional conditions do not always primarily matter by shaping a local
arena for knowledge exchange and direct interaction between region actors. Moreover, the
miscellaneous variety of regional innovation system types brings about a considerable scale of
definition bewilderment and empirical justification issues (Andersson and Karlsson, 2002). It
makes it a problem for researchers and policy makers alike to predict what a regional innovation
system is. The advance goes through the absence of a amalgamated theoretical framework from