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Do only big cities innovate? Technological maturity and the location of innovation.

Innovation enhances economic performance. High rates of innovation are associated with high rates of productivity growth, and faster productivity growth leads to higher real wages and improvements in standards of living. Consequently, many local policymakers are eager to encourage higher rates of innovation in their areas.

Theoretical and empirical studies of the geography of innovation find that relatively populous regions are the most conducive to innovative activity. Large and densely populated places offer more developed markets for the specialized inputs used in innovation. Populous places also offer innovators greater opportunities to learn from one another. On the surface, these ...

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