Labor Networks Connecting Peripheral Economies to the National Innovation System

Abstract

Understanding the characteristics of innovation in peripheral regions is critical to enhancing economic competitiveness and productivity in remote or rural communities worldwide. Metropolitan innovation success stories have limited application or policy relevance in peripheral areas due to a lack of critical mass in industry and population. This has seen an emergent body of literature consider the different dynamics of innovation in these areas. This article contributes both methodologically and conceptually to current academic discourse and debates by exploring innovation across the sparsely populated large spatial divides of regional Australia through the novel use of social network analysis and econometric modeling. It employs commuting data and a regression of 2000 to 2013 Organization for Economic Cooperation and Development patent data against select socioeconomic variables and commuting indexes. It finds that innovative activity is positively linked to population, commuting, and professional employment for smaller communities. This points to the movement of labor as an important factor, playing a role as an interregional conduit of tacit knowledge by extending the social capital networks of smaller peripheral communities.