The Influence of Governmental Structures on Chances for Regions to be Innovative: Explaining the Importance of the Polity Dimension

When we look at the distribution of innovative regions in centralized France and federal Germany, we can see a rather monocentric structure in France with a strong concentration on Paris and a polycentric structure in Germany. This observation leads to the question if the governmental structure of a country has a systematic influence on its geography of innovation. Economics can show and explain that technological innovation processes cluster regionally, but related literature in this field underestimates the influence of politics and the role of the state in this context, as there are good reasons for a theoretical connection between governmental structures and chances for regions to be innovative. State action can initiate and foster innovation processes, e.g. through research funding, qualification and technology programs, but it is important that such policies fit the specific socio-economic context. It can be hypothesized that the closer the policy makers are to the socio-economic, and in this case, regional situation, the better the policies to stimulate regional innovation processes. Thus, it is assumed that, because innovation processes cluster regionally, and because regional governments within federal states are closer to the specific situation and can, therefore, offer appropriate policies, the chance for regional innovation in federal states is enhanced. We analyzed seven EU countries with different governmental structures. The real capability of their regions to design effective policies is additionally measured by their financial and administrative competences. The innovative output of the regions is measured by Eurostat-data on patent applications. We could find first support for a relationship between the governmental structure of a country and the chances of its regions to be innovative, and thus, for the role of the polity dimension for technological innovation processes. This paper brings in the importance of political science for understanding economic developments and makes clear that governmental structures are more than historic institutions; they are relevant socio-economic factors. Crucial points for discussion are, on the one hand, the consequences for centralized countries: Do disadvantages in the participation in global innovation networks arise because of a stronger concentration with a smaller number of innovative regions? Recently, some centralized states react to this issue with institutional reform and give more administrative and financial power to their regions. On the other hand, the EU including its funding opportunities for cities and regions is an important player which influences the state’s capabilities to foster regional innovation.