The nexus between innovation and well-being across the EUS space: what role for urbanisation?

Blog by Camilla Lenzi and Giovanni Perucca

30 Jan 2019, 11:42 a.m.
Camilla Lenzi and Giovanni Perucca



The importance of innovation for economic performance and competitiveness, whatever the level of analysis adopted, is uncontroversial and there does not seem to be any alternative to an innovation-led economic prosperity.


By promoting development, innovation can also impact on subjective well-being. Several studies, in fact, found evidence of a strong association between subjective well-being and the level of wealth of countries and regions. Yet, beside indirect impacts operating through its effects on the economy, innovation may also affect subjective well-being directly.


In fact, access to innovation implies a broader varied of new and advanced goods and services, suggesting that the direct impact of innovation on subjective well-being is positive. This assumption is supported by the limited literature on this issue (Phelps, 2015; Dolan and Metcalfe, 2012, Binder, 2013), which, however, leave unexplained how does space mediate the interaction between innovation and subjective well-being.


This question is highly relevant for four reasons.


First, the geography of invention and innovation is not homogeneous over space. In particular, cities play a primary role in the development of new ideas and the introduction of innovations into the market. Cities are the incubators of innovation (Vernon, 1960) because of the enhanced operation of agglomeration economies and localised knowledge spillovers in urban settings.


Second, there is abundant evidence of the differentiated nature and type of innovation processes across space (Saxenian, 1994), suggesting that innovation follows differentiated spatial patterns. For example, the geographies of invention and technology-intensive activities (in the form of patents and R&D) and innovation (in the form of product and process innovation) do not perfectly overlap.


Third, not only are the geographies of invention and innovation highly selective in space, but also the effects and the benefits deriving from invention and innovation are differently distributed and reaped across space, depending on the absorptive capacity of regions and the type of innovative activities (Capello and Lenzi, 2014).


Lastly, in a spatial perspective, innovation is particularly subject to spatial spillover effects and geographical distance plays a prominent role in shaping the diffusion of innovation across space and over time, especially in the early stages of diffusion while it tends to smooth over time until it vanishes (Comin et al., 2012).


Based on these motivations, we examined empirically, in a spatial perspective, which types of innovative activities, i.e. more technology-intensive (patents) contrasted to less technology-intensive ones (trademarks) impact most on well-being, in which types of region (i.e. highly urbanised regions contrasted to medium and low urbanised ones) and through which spatial channels (i.e. through geographical spillover effects).


The empirical analysis combines data on individual subjective well-being in the EU (derived from various Eurobarometer surveys in the period 2007-2011 and comprehending more than 163 thousand observations) with data on regionalised patents and trademarks retrieved from EUROSTAT.


The results indicate that when focusing on the regional level of analysis, different types of innovation may play a different role in different spatial contexts: more technology-intensive innovations impact on well-being only in highly urbanised areas, whereas less technology-intensive innovations are associated with greater individual well-being in all settings.


The interpretation of these findings is linked to the different natures of the two types of innovation. In order to make technology-intensive innovation impact on well-being, there is need for a more sophisticated demand more open to radical innovations, and, possibly, a certain scale to conduct research activities efficiently. These conditions primarily obtain in more urbanised areas. Differently, less technology-intensive innovations (being to a great extent closer to the commercialisation stage) are, on average, more easy to be appreciated by market demand, less radical, and, possibly, do not require a substantial scale for their creation.



Binder M., 2013, “Innovativeness and subjective well-being”, Social Indicators research, 111(2): 561-578.

Capello, R., Lenzi, C., 2014, “Spatial heterogeneity in the knowledge, innovation and economic growth nexus: Conceptual reflections and empirical evidence”, Journal of Regional Science, 54(2): 186- 214.

Comin, D., Dmitriev M., Rossi-Hansber, E., 2012, “The spatial diffusion of technology”, NER 18534, available at

Dolan, P., Metcalfe, R., 2012, “The relationship between innovation and subjective wellbeing”, Research Policy, 41: 1489-1498.

Phelps, E., 2015, Mass flourishing how grassroots innovation created jobs, challenge, and change, Princeton University Press.

Saxenian, A.L., 1994, Regional Advantage. Culture and Competition in Silicon Valley and Route 128, Cambridge, MA; Harvard University Press.


Read the paper on Urban Studies - OnlineFirst here



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