Some Aspects of the Effects of the Regional Distribution of Scientific Talent on Regional Economic Activity

There is a persistent belief that regional R and D activity will have stimulating effects on the region's economic activity. In order to explore this view further, a multi-equation econometric model is derived to determine the extent to which the spatial distribution of scientific talent is in turn reflected in regional economic activity. The parameters of the model are estimated by the two-stage least-squares method. It is concluded that such economic variables as investment in plant and equipment, employment, and earnings are positively related to the distribution of scientific talent, although these relationships are relatively inelastic. It is also seen that the regional distribution of Department of Defense R and D expenditures tends to be extremely elastic with respect to the regional distribution of scientific talent. It is therefore concluded that concern for the scientific sophistication of a region's population, and the economic implications of this sophistication, is by no means misplaced.