Forms of Innovation and the Core-Periphery Divide: (Non-) Technological Innovation and Geo-Remoteness in Israel

Abstract

Scholarly interest in innovation in the periphery has recently grown, along with the prevalence of studies investigating different forms of innovation. Given the relative paucity of research in these fields, this study aims to examine the probability of technological and non-technological innovation in peripheral areas, compared to core regions. Drawing on a sample of over 3800 Israeli firms, we analyzed how their peripheral geographic location impacts their chances to innovate, in comparison to firms in Israel's core regions. The results showed that the probabilities to technologically innovate in most of the defined peripheries significantly exceed the probabilities in the core. Those probabilities decrease with the region's increasing peripherality. Peripheral firms that do tend to technologically innovate were found to be deeply embedded in their region's economy. Unlike technological innovation, peripheries' non-technological innovation activity was found to benefit from urban agglomerations that endow local economies with an (technological) innovative buzz. The results have policy implications for the promotion of regional economic growth.