Entrepreneurship, innovation and regional growth:
a network theory
Robert Huggins
•
Piers Thompson
Accepted: 23 January 2015 / Published online: 15 February 2015
Ó Springer Science+Business Media New York 2015
Abstract Despite the growing acknowledgement
that entrepreneurship is an important driver of regional
innovation and growth, the role of the networks in
these processes has been less formally examined. In
order to address this gap, this paper proposes that the
relationship between entrepreneurship, innovation and
regional growth is governed by a series of network
dynamics. Drawing upon aspects of endogenous
growth theory and the knowledge spillover theory of
entrepreneurship, it is proposed that the nature of the
networks formed by entrepreneurial firms is a key
determinant of regional growth differentials. In par-
ticular, network capital, in the form of investments in
strategic relations to gain access to knowledge, is
considered to mediate the relationship between en-
trepreneurship and innovation-based regional growth.
It is suggested that network dynamics should be
further incorporated into theories concerning the link
between knowledge spillovers, entrepreneurship and
regional growth. The paper concludes with a series of
theoretical, entrepreneurial and policy implications
emerging from the study.
Keywords Networks Á Entrepreneurship Á
Knowledge spillovers Á Innovation Á Regions Á Growth
JEL Classifications L26 Á O31
1 Introduction
Innovation is commonly acknowledged to be a prin-
cipal means by which regions foster economic growth
and competitiveness (Capello and Nijkamp 2009;
Cooke et al. 2011; Harris 2011). At the same time, it
is increasingly suggested that entrepreneurship is also a
key source of such growth (Audretsch and Thurik
2001; Audretsch and Keilbach 2004a, b; Audretsch
et al. 2006). Furthermore, alongside these perspectives
there is a growing school of thought which suggests
that the networks facilitating flows of knowledge
within and across regions are a key source of innova-
tion and growth (Huggins and Izushi 2007; Huggins
and Johnston 2009). However, despite these develop-
ments, the role of networks within entrepreneurial
models of regional growth has been less formally
examined. Therefore, identifying a regional growth
theory that integrates network dimensions alongside
entrepreneurial- and innovation-related components
R. Huggins (&)
School of Planning and Geography, Cardiff University,
Glamorgan Building, King Edward VII Avenue,
Cardiff CF10 3WA, UK
e-mail: hugginsr@cardiff.ac.uk
P. Thompson
Nottingham Business School, Nottingham Trent
University, Burton Street, Nottingham NG1 4BU, UK
e-mail: piers.thompson@ntu.ac.uk
123
Small Bus Econ (2015) 45:103–128
DOI 10.1007/s11187-015-9643-3
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