Financial Times Article Tuesday October 14th 2003

Heavy investment in the knowledge economy has pushed San Francisco and the Bay Area region of California into the top spot in an Index of World Knowledge Competitiveness.

Despite its economic downturn of recent years, the region scores highly in the amount of R&D expenditure by business and higher education public spending over the past year.

These are two of the main measurements compiled by Robert Huggins Associates, the think-tank based in Cardiff, the Welsh Capital, to compare the strengths and weaknesses of knowledge economy regions.

San Francisco remains one of the strongest regions in the world for employment in knowledge intensive sectors such as production of computers and high-technology devices, despite considerable job losses in Silicon Valley.

The World Knowledge Competitiveness Index underlines the dominance of US regions among leading centres of the knowledge economy.

The US has 43 out of the top 50 regions in the index, which uses 17 measures to gauge knowledge capacity, capability and utilisation of a region's economic performance.

Only eight of 45 European regions perform above the average, with only four in the top 50 - Stockholm (18th), Uusimaa, Finland (37th), Luxembourg (44th) and Switzerland (49th).

Regions that have improved considerably since Mr Huggins' first Competitiveness Index last year are Boston, New York and Rochester in the US, Brussels and Luxembourg in Europe and Kanagawa and Osaka in Japan.

But the biggest climber in the Index is Tokyo, up 39 places to 15th, the highest ranking no-US region.

The Chinese knowledge economies of Pearl River delta, Beijing, Shanghai and Tianjin make it on to the list primarily because of hig economic activity and rapid labour market growth.

Despite the ability of Hyderabad, Mumbai and Bangalore to attract knowledge-based investment, India lags far behind its US and European rivals.

By Roger Blitz in London

© Copyright Financial Times 2003