81 Northern Economic Review The role of a university in regional renewal: the case of Newcastle Paul Benneworth and Gert-Jan Hospers Introduction There is increasing acknowledgement that we are living in a knowledge economy, and there is a growing consensus that ‘knowledge capital’ is an increasingly important determinant of productivity growth, economic development and ultimately improvements in standards of living (cf. Temple, 1998, for a review). From the 1980s onwards, macroeconomists have noted that growth can no longer be accounted for in terms of investments in traditional ‘factors of production’: land, labour and machinery. Partly driven by recent trends around globalisation (Wes, 1996), and partly by the centuries-old shift from agriculture to manufacturing to services (Hospers, 2004), knowledge capital endowments are an important determinant of competitive advantage and hence the territorial distribution of economic activity. But there remains considerable uncertainty over its precise spatial implications, with predictions varying along a spectrum from the death of distance (Cairncross, 1997) to the rise of the mega-city (Budd, 2006). What is evident is the rise of a limited number of extremely successful exemplar regions, whose control over the way the knowledge economy is understood has led Armstrong (2001) to characterise these places as the ‘totemic sites of the new economy’. These changes have not gone unnoticed by policy-makers who have responded to the rise of the knowledge economy by switching their focus away from managing the location of productive industry towards investing in the sources of high-technology, knowledge based endogenous growth. Previous policy paradigms, focused on attracting large branch-plants, and stimulating innovation within large employers’ supply chains have given way to the so-called ‘third wave’ of regional industrial policies (Bradshaw and Blakely, 1999; Larosse, 2004). These new approaches seek to replicate Paul Benneworth is an Academic Fellow in the Institute for Public Policy at Newcastl e University. paul.benneworth@newcastle.ac.uk Gert-Jan Hospers is Assistant Professor of Economics in the School of Law, Economics and Governance Studies at the University of Twente. g.j.hospers@utwente.nl Northern Economic Review Issue 38 (Spring 2008), pp81-101 © 2008 St Chad's College, Durham University