The role of knowledge in regions: a case of Lithuania

Abstract

The purpose of this paper is to discuss the role of knowledge in regions of Lithuania. Since the middle 1980's, the literature on regional economics has stressed that in some regions, flexible manufacturing systems and forms of network governance permit firms to capture and exploit knowledge externalities. These give rise to dynamic economies of learning, enabling firms in certain regions to maintain and exploit technological advantages that are intensive to shifts or differences in factor costs. The present situation in regions of Lithuania is described by looking at the macroeconomic performance, labour market and regional innovation system.