1.1 Introduction
Science, technology and innovation (STI) are fundamental to promoting sustainable development in cities, taking into account the fact that more than 90% growth in urban populations is expected in the next 30 years; it is important to determine what are the best conditions to maintain adequate infrastructure, reduce the use of resources, and prevent environmental deterioration and the risk of natural disasters, and STI have an important role because they can provide different solutions to improve the quality of life in urban areas (UNCTAD, 2013).
Cities that are global knowledge leaders are normally characterized by a high concentration of STI resources that attract the best human resources, effective researchers and institutions that generate quality research and social impact, a friendly commercial environment with an open culture, a knowledge-based economy conducive to the growth of emerging industries and close links with global STI networks generating growth development through international collaborations (Advertisement Feature, 2017).
Factors that promote growth and development in the regions around the world have close relationships with investments and the strengthening of research and development (R&D) in different socioeconomic contexts and local wealth, indicating the regional value added by a complex and holistic STI approach, which allows for a decrease in inequality and a strengthening of land-use planning based on knowledge that is key to smart cities (Dettori, Marrocu, & Paci, 2012). This approach has been applied by different regions generating transformations in the flows of investments, information and services in the main commerce hubs of (by order of importance) London, New York and Tokyo, followed by Madrid, Milan and Shanghai, as second hub; Latin American cities have begun to work to apply STI in urban management with the aim of connecting to the flows of global commerce (Caicedo Aspril, 2011).
Considering that most urban regions share a large number of similarities and productive dynamics, a strategic approach is needed to help differentiate between regions, beyond landscape and cultural aspects, through increased investment in R&D, which improves the value added and productivity. In Latin America, this strategy for global competitiveness is known as investment in STI.
In the cities, technology can improve urban planning and governance by using different strategies to improve transportation and water and energy supplies, localize settlements with lower risks and better localize urban infrastructure.
This study starts from the conception of a correlation among the concepts of R&D, regional differentiation and development. The existence of such a correlation is clear from the fact that the current global dynamics have shown that what generates more added value to cities and regions is their investment in STI, which helps to overcome the homogenization of productivity between urban regions.
The main argument in favour of STI as a key to differentiated regional development is based on the fact that regional agglomeration provides the best context for a knowledge economy (Hudson, 1999) and for the creation and dissemination of knowledge as well as for learning (Valdez-Lafarga & León-Balderrama, 2015). Moreover, innovation plays a predominant role in the postulates of Porter (2000) to sustain competitiveness. The author argues that, for the specific case of a region, prosperity is linked to the region’s competitive advantage, and the first driving force of competitive advantage is innovation that depends on the results and process of knowledge generation through science and technology.
Camagni (2003, p. 8) states that, from an urban economy perspective, the explanatory arguments of the competitive advantages of large cities and urban agglomerations always attach special importance to the effects derived from innovation, which is a dimension that generates economies of scale derived from the indivisibility of some processes and is the fundamental cause of the emergence of positive externalities. Therefore, a large number of metropolitan regions of the world are those that, with their stockpiling of physical, human capital, finance and knowledge, generate the largest volume of localization and urbanization economies and constitute an attractor for all types of activities, especially those with high STI content as a key element in the sophistication of markets and higher growth.
The analysis of STI as a competitiveness factor highlights the relationship among region, knowledge, innovation and diffusion, as well as the spatial dimension of the technical change supported by the construction of local and/or national innovation systems (Ramirez J. & Parra-Peña S., 2010), and demonstrates that the notions of technical change, innovation and competitiveness are closely related to development (Cimoli, Carlos, & Annalisa, 2005).
Globalization has opened up a wide range of opportunities for the productive sectors in developing countries to be competitive and exploit forms of improved growth and progress. However, a basic requirement for development is that the different production sectors increase their technological standards (Chadha, 2007, p. 415) to a great extent; it is now essential for industries to expand their STI efforts in a liberalized and globalized environment to be able to respond successfully to the current competition and production dynamics.
All of the above has generated increasing recognition among regional authorities that economic growth and the competitiveness of their regions depend to a large extent on the ability of the companies in these regions to innovate, which is why offering appropriate support to help local companies to be more innovative and competitive is now a key factor in regional policy (Cooke & Memedovic, 2003, p. 8).
Second, STI is not only crucial for regional economic competitiveness but also for the growth of basic productivity. The findings suggest that expenditures on R&D, industrial diversity and the distribution of human capital endowments can have an important effect on the generation of innovation and productivity (Mukim, 2012, p. 357).
Gordon and McCann (2005, p. 4) offer a vision of the relationship between innovation and regional development in which they focus on the role of agglomeration economies in the promotion of localized learning processes, such as indirect effects or other transfers of information, through which it is possible to identify the amount of benefits to localized regional companies as a result of the development of new products, services and processes.
Likewise, there is an extensive literature regarding the analysis of technical change and endogenous economic growth, where authors indicate that innovation plays a transcendental role because it becomes a catalyst for growth through the progressive increase and effectiveness of the factors of production. For example, Coe, Helpman, and Hoffmaister (1997) empirically demonstrate the positive impact of R&D on productivity, and Solow (1956) emphasizes the technological differences that explain a large part of countries’ productivity differentials.
In this way, regional productivity is also positively affected by the activity of STI and the improvement of public infrastructure in neighbouring regions given that technological knowledge, which is created and accumulated through STI activities, improves the production and diffusion of innovations and subsequently promotes the growth of productivity and competitiveness (Bronzini & Piselli, 2009).
At the global level, it is assumed that increases in R&D investment in any territory will lead to greater development, knowledge generation and innovation, which in turn will lead to greater economic growth. In Latin America, it is also assumed that the focus on and investment in STI can be one of the main drivers of economic growth, both nationally and regionally. Indeed, Goschin (2014, p. 24) has argued that any region that invests sufficient resources and is effectively involved in STI has the potential to achieve economic growth and that, in fact, there is a bidirectional connection between this focus and economic growth. A key place for regional development (measured by regional GDP per capita) often includes determinants of regional investments in R&D and the knowledge flows of research institutes and universities that are usually located together geographically and stimulate productivity and regional growth.
In addition, studies that consider R&D in combination with local wealth and socioeconomic conditions indicate that regional economic growth and innovation are also strongly mediated by how local social and economic conditions and, in particular, strong human capital growth configure the returns of investment in R&D (Usai, 2011).
In spite of the above, this hypothesis has already been questioned by the literature in various territories (Rodríguez-Pose & Villareal Peralta, 2015), and there are studies with results that suggest that, although the expenses of STI have an impact on the growth of innovation, the grouping of innovative activity and input factors associated with the advantages of a location are also important (Mukim, 2012, p. 359) and the promotion of STI activity can be considered a weak instrument even to reduce regional disparities (Bronzini & Piselli, 2009, p. 197). Some authors have expressed doubts about the infallibility of the correlation between R&D, growth and development, stressing that the ability to appropriate this knowledge should also be introduced into the equation so that knowledge can be converted into growth. These authors also suggest that the correlation depends on many other factors that allow for the strengthening of the socioeconomic environment so that it is conducive to innovation and entrepreneurship (Goschin, 2014, p. 25).
Fourth, and closely related to the variable of economic growth, questions arise regarding the role of STI in reducing regional inequalities. Although some research has found that the various R&D expenses do not affect the level of disparity in economic growth (Aritenang, 2013, p. 155), for several decades au...