Overcoming inequality in regional innovation ecosystems : the Basque country and the advance of economic democracy

Abstract

Cities and regions across the world have embarked on designing and implementing place-based economic development strategies for clustering innovation and entrepreneurship. This rising trend can be seen in the proliferation of Innovation Districts and Regional Innovation Ecosystems across many metropolitan regions in the US, Europe, and cities in the Global South. While many of these strategies rely heavily on urban physical transformation, most of them are the manifestation of a well-defined economic development policy that has been proven conducive to rising inequality. Moreover, the policies designed for territorializing innovation through regional ecosystems have prioritized wealth creation in ways that ladders of opportunity are only accessible to specific sectors of society. In turn, this has contributed to increasing inequality and disproportionately affected minorities and disenfranchised communities. Together with the negative consequences of skill-biased technological change and its profound impact on labor, the proliferation of strategies for clustering innovation have also created challenges in spatial and socioeconomic segregation in regions. Using the case of the Basque Country in Spain, this thesis examines the conditions that have enabled the establishment of a successful regional innovation ecosystem while advancing economic democracy at the same time. By examining the political economy of Basque economic development planning, the emergence of cooperative networks of firms such as Mondragon, and the local social and cultural, enabling factors, this thesis will produce a set of recommendations to policymakers and practitioners engaged in developing regional innovation ecosystems.