The global and the local

David A. Wolfe

Chapter 6 in The Governance of Innovation Spaces, 2026, pp 124-147 from Edward Elgar Publishing

Abstract: This chapter examines the interaction between the global scale and regional and local innovation systems. The deepening integration of regional economies into the global one paradoxically accentuates, rather than diminishes, the significance of local context for innovative activities. The conceptual progression from global value chains to global production networks (GPNs) and global innovation networks (GINs) highlights the increasing importance of high value-added activities – engineering, product development, R&D, and intellectual property – for regional economic development. Integrating the international business perspective on MNE locational strategies – the chapter analyses how multinational enterprises (MNEs) distribute R&D and high value-creating activities across regional nodes in global networks. It distinguishes between competence-exploiting MNE strategies, which transfer established knowledge to lower-cost locations, and competence-creating strategies, which tap into distinctive regional knowledge assets and innovation capabilities. The benefit that regional economies realize from GIN investments depends on the quality of local institutions, the strength of civic capital, and the effectiveness of strategic coupling between global networks and local innovation activities. The processes of strategic coupling and decoupling can alter regional developmental trajectories, opening new “windows of locational opportunity” while rendering some regions vulnerable to disinvestment. It examines – within these networks – the Toronto-Waterloo Innovation Corridor's growing role in artificial intelligence and machine learning research, and its successful attraction of expanded MNE R&D mandates, illustrating how regions with distinctive local assets and strong civic governance can embed themselves effectively in GINs.

Keywords: Global Production Networks; Global Innovation Networks; Multinational Enterprises; Strategic Coupling; Locational Advantage; Knowledge-based Economy (search for similar items in EconPapers)
Date: 2026
ISBN: 9781035320783
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