How to Turn the Fate of Old Industrial Areas: A Comparison of Cluster-Based Renewal Processes in Styria and the Saarland

Abstract

The aim of this paper is to explore the role of regional innovation systems and clusters in the economic recovery of old industrial regions. We draw a distinction between three types of cluster-based renewal: an innovation-oriented adjustment of mature clusters (incremental change); the emergence of new agglomerations in established industries (diversification); and the rise of knowledge-intensive and high-technology activities (radical change). In the empirical part of the paper we compare cluster-based recovery processes in the regions of Styria and the Saarland. It is shown that Styria rebuilt its regional innovation system more successfully, enabling the innovation-oriented adjustment of a mature cluster, the rise of a new cluster in an established industry, and the emergence of knowledge-intensive activities. In the Saarland, in contrast, the regional innovation system has been more specialised, which has resulted in weak performance with respect to incremental change and diversification and high performance regarding radical change.