Innovation-oriented Land-use Policy at the Sub-national Level: Case Study from Germany

Abstract

This study investigates major features of land-use strategies that German municipalities have adopted to attract innovative firms (IFs). In this context a two-stage competition model is introduced: firstly a municipality should solve economic and interest conflicts related to its preference for high-quality sites for IFs against the land needs of simple manufacturers. The second part of the model describes location competition among municipalities with high-quality sites for the location of IFs. German municipal land-use policy is well combined with industrial policy; this paper reveals the strengths and weaknesses of the urban real estate market in Potsdam, and its future opportunities and risks as the location of different economic activities are determined in the planning process. Science Park Adlershof (Berlin) is an output of the spatialoriented technology policy, which creates incubators for innovative SMEs. Municipalities also cooperate, since it provides larger sites, generates economies of scale and contributes to a smooth suburbanisation process (see Leipzig). JEL Classification: H42, H54, L3, O18, O3, R14, R52, R58