Community strength, innovation and learning: new evidence from Victoria

Abstract

This paper investigates the role played by networks in learning regions. In particular, it explores the relationship between community strength and innovation in regional Victoria, Australia. The literature on innovation is increasingly pointing to the important role played by local and regional governance mechanisms in driving innovation. The effectiveness of formal structures governing learning regions is underpinned by informal networks. Networks are important as collective learning depends on a continuous flow of information and exchange, and this is built on relationships of stability and trust. Recent Victorian government research presents a unique opportunity to explore the role played by community strength, which can broadly be characterised as the strength of networks. The Victorian Indicators of Community Strength are 14 indicators that provide detailed data at the local government level. To test the theory of a connection between community strength and innovation across regional Victoria, patent data is used as a proxy measure for innovation. This data is then cross-referenced with various social and economic data sets, including the indicators of community strength. The analysis shows that among regional Local Government Areas in Victoria 56% of the variation in the patent rate can be explained by the combination of population density, tertiary education rates and various indicators of community strength, whereas just 23% of the variation in the patent rate can be explained by population density and tertiary education rates alone. Independent of population density and tertiary education levels, there is a statistically significant correlation between the number of patents registered per capita and several of the indicators of community strength. In particular, there is a significant positive correlation between the patent rate and the percentage of the population who are members of an organised group.