Social Mechanisms of Local Knowledge Spillover in the Geography of Innovation

Abstract

We connect the insight that social environments are conducive to individual creativity with the observation that creative persons are attracted to regions in which they can live out their creativity, and in doing so, indirectly contribute to the social environments and creative potential of those regions. We capture the resultant dynamics in a network theory of localized knowledge spillovers. We test this theory using two independently curated, historical datasets. The first consists of the geocoded places and years of the births and deaths of 142,902 creative persons of the secular world who lived in Europe between 1000 and 1900 A.D. The second dataset consists of geocoded places and founding years of 4,220 monasteries of the largest 81 Roman-Catholic Orders in Europe in that period. Between 1000 and 1900 A.D., monastery foundings were entrepreneurial acts, that is, local organizational innovations that require a high degree of creativity and problem-solving. As monastery foundings clearly fall outside the domain of the investigated creative persons, regional variation in monastery founding rates allow us to examine knowledge spillovers resulting from the agglomeration of creative persons in particular regions and at particular times. We extend the proposed network theory of knowledge spillovers to a life-cycle explanation for the rise and decline of regional clusters over time.