<p>This study examines research trends of regional innovation and industrial agglomeration from an evolutionary economic geography perspective, focusing on Japan’s industrial policy. This is a systematic literature review that explores industrial agglomeration theory, formulated by Alfred Marshall, applied to spatial economics, industrial cluster theory, and innovative milieus. Owing to advancements in globalization and the knowledge economy, the contemporary geographical scope of knowledge flows (i.e., drivers of innovation) encompasses multiple spatial scales (local to global). This is reflected in the development of new knowledge-based theories. Furthermore, research on the duration of industrial agglomerations has complemented the advantages of long-term, permanent spatial clusters. Additionally, the concept of “related variety,” which emphasizes industrial technological interdependency, offers valuable insights into strategic agglomerative resilience in the face of economic downturns. Hence, to integrate novel evolutionary economic geographiy theory into Japan’s industrial policy, the spatial characteristics of knowledge flow must be fully taken into account.</p>