Changes in regional knowledge bases and its effect on local labour markets in the midst of transition: Evidence from France over 1985-2015

Abstract

In the 2000s, the European labour market experienced a number of significant changes including the transition to a more knowledge-intensive economy as well as the introduction of various economic policies (e.g. Eurozone, subsidized jobs, and social tax cuts). In times like these, the role of knowledge, which is essentially the driving force of innovation and thus promoting technological change and economic growth, is shifting due to new labour market conditions. The present study aims to explore how processes of local knowledge bases have been altered in this transformative environment and how these have impacted on local employment growth. The investigation considers three different knowledge bases in conjunction, incl. knowledge size, knowledge creation, and knowledge application. The study is based on an econometric analysis of a panel of 94 France NUTS-3 regions covering the period 1985-2015, utilizing patent data from European Patent Office (EPO) Statistical Patent Database (PATSTAT), and regional data from European Regional Database (ERD). The result shows that the role of knowledge for employment growth has indeed changed towards more specialized inputs in applications while the importance of greater knowledge size remains still important.