Contemporary economic activity is increasingly dominated by ‘knowledge-based’ activities. Increasingly internationalisation of competition has increased pressures on firms in all advanced economies to compete primarily in terms of product differentiation (Porter, 1990). This has changed the nature of the production process, placing an increasing premium on intangible inputs; macro-economic analyses (for a review see Temple, 1998) have determined that investment in physical assets and labour alone does not account for much more than half of the productivity growth in the developed world since 1945 (Romer, 1994; Solow, 1994). There is an increasing consensus that knowledge capital, the expertise embedded in individuals, networks and organisations, providing capacity for continual innovation, which accounts for the remaining growth. Knowledge capital facilitates innovation, in particularly those innovations, which allow the territorial exploitation of a deeper division of labour, creating competitive advantages for places and driving their economic growth (Wood, 2005). The neologism ‘knowledge economy’ refers to the range of changes, pressures and trends which have increased the importance of innovation, knowledge and learning to economic life (Milward (2003) B. Milward, Globalisation? Internationalisation and Monopoly Capitalism: Historical Processes and Capitalist Dynamism, Edward Elgar, Cheltenham (2003). Milward, 2003).