Regional Industrial Path Development Research Articles

The role of demand in regional industrial path development – examples from the Swedish periphery

ABSTRACT This paper deals with the role that demand can play in regional industrial transformation, focusing on new industry formation in peripheral regions. As we argue in this paper, demand can be an important driver for industrial transformation, yet often underscored in the literature on regional development. Demand includes aspects related to general consumption patterns, to co-development between users and producers, to public procurement, or to norms and values among consumers. Theory building departs from accounts on new path development, were peripheral regions are typically seen as providing unfavourable conditions for industrial transformation, due to a weak organizational and institutional endowment. The empirical analysis focusses on two cases of new regional industrial path development in Värmland, a peripheral region in Sweden, namely locally processed dairy products, as well as microbreweries. The analysis is based on in interviews with regional entrepreneurs and industry stakeholders. We highlight the multiple roles that demand has played in the renewal and creation these two new regional industrial growth paths in the Swedish periphery.

Cumulative causation in regional industrial path development – A conceptual framework and case study in the videogame industry of Hamburg and Shanghai

While broad evidence has been generated on the forces leading to divergent regional industrial path development, we still do not fully understand how initial structural differences between regions are dynamically attenuated in industrial path development processes. In other words, the cumulative causation processes instigating such differences are not well explored. In this paper, a process model is developed, which conceptualizes industrial path development as an iterative build-up of innovation system resources, which is conditioned by firm- and system-level agency. We argue that the specific configuration of system resource stocks, as well as firm- and system-level agency jointly condition the further evolution of a path each time a regional industry reaches a “critical moment”. Unpacking the cumulative system building process across development phases allows exploring how positive or negative cumulative causation patterns emerge in the path development process and how early interventions in the system building process may have knock-on effects at later stages.

Grasping transformative regional development – Exploring intersections between industrial paths and sustainability transitions

A comprehensive perspective of transformative regional development is pertinent considering complex present and future challenges such as the climate crisis. Particularly in face of ecological boundaries which manifest themselves in limited resources and result in social disputes, a realistic grip on transformative regional development is of utmost importance. To advance this field, we propose a research agenda that draws on the debates on regional industrial path development and sustainability transitions. We define two core dimensions: interrelations between several industrial paths and interrelations between regions and between spatial scales. We argue that both dimensions need to be considered against ecological boundaries and as embedded in social dynamics. We combine specific questions on these interrelations into a research agenda.

Emergence of new industries in peripheral regions: the role of narratives in delegitimation of onshore wind in the Arctic Finnmark region

ABSTRACT This paper discusses how narratives influence the legitimation of new industries in peripheral regions. We contribute to the literature a discussion of the emergence of green industries in peripheral regions, but particularly to the emerging debate in evolutionary economic geography on the role of legitimation in the emergence of new industries. Based on an empirical investigation of narratives regarding onshore wind in the Finnmark region in northernmost Norway, we caution against the focus in the literature on ‘successful’ legitimation, arguing that to better comprehend how new green industries emerge in regions there is a need also to understand delegitimation of new industrial activities and to investigate unsuccessful path creation processes, not only paths that have come into being and where legitimation has been ‘achieved’. Following from this we argue that our study on how representations (i.e., narratives) of emerging paths are linked to observable outcomes (e.g., delegitimation) teases out the need for further investigation of power relations, a topic that has received very little interest in research on regional industrial path development.

The role of powerful incumbent firms: shaping regional industrial path development through change and maintenance agency

ABSTRACT This article seeks to advance perspectives on powerful incumbent firms in (new) regional industrial path development. Drawing on recent insights from transition studies, it is argued that this actor group – hitherto often portrayed in a rather one-sided manner – plays a crucial role in shaping the pace and direction of regional path development through agency oriented towards both change and maintenance. Building on systemic perspectives at the intersection of evolutionary economic geography and innovation studies, a particular emphasis is placed on incumbent firms’ interventions to reconfigure or stabilize their surrounding regional innovation system to support their intentions. To this end, this article examines how incumbents exert their influence through various forms of power as means by which they promote or hinder regional industrial change. Empirically, the role of incumbent firms in three traditional automotive regions in Austria is investigated. It is shown how they leverage their power to propel the industry’s digitalization and suppress its decarbonization.

New regional industrial path development and innovation networks in times of economic crisis

ABSTRACT This paper presents novel research on how exogenous shocks and economic crises affect innovation, knowledge networks, and new path development in regions. Conceptually, we take a regional innovation systems perspective which views new path development as the outcome of innovation and knowledge exchange between firms and other actors, facilitated by a common institutional framework. Empirically, we draw on interviews and network data from the oil and gas industry in southern Norway. Following a long period of prosperity, the industry was hit by the oil price shock in 2014 and entered an economic crisis. The findings suggest that the shock triggered the firms to commit even more forcefully to innovation and to expand their knowledge networks geographically. To cope with the crisis, they applied a variety of strategies, which can be associated with different forms of path development. We draw conclusions for innovation policy in the context of exogenous shocks and crises.

Towards an integrated framework of agency in regional development: the case of old industrial regions

ABSTRACT This paper investigates the role of agency in regional industrial path development using an integrated framework that combines three recent conceptualizations of agency: (1) firm- and system-level agency; (2) trinity-of-change agency; and (3) reproductive and change agency. Our framework redefines firm- and system-level agency into organizational- and system-level agency to enable a more nuanced and multifaceted understanding of the agency of various regional actors. Empirically, we contribute to the literature by analysing the evolutionary trajectories of two coal regions with vastly contrasting development dynamics. Our research primarily attributes these divergences to the substantial differences in the nature and vigour of system-level agency. However, our empirical research reveals that most actors exerted both organizational- and system-level agency, although at profoundly different intensities and scales.

Revisiting path-as-process: agency in a discontinuity-development model

ABSTRACT In the literature on regional industrial path development, the path-as-process perspective conceptualizes the emergence, evolution, transformation, and decline of regional industries in the long term. However, critical questions about the role of agency in path development and transformation remain open, partly due to a frequent empirical focus on isolated episodes. This article argues that path development should be seen as a long-term sequence that includes episodes of path development interrupted by occasional episodes of transformation. These transformative episodes are driven by agency within a changing or stable structural context. Such a discontinuity-development model focuses attention on how and why agency patterns change and on which practices agents employ during critical junctures. An empirical vignette on the long-term development of tourism in Eilat, Israel, illustrates how the model can be applied and elucidates methodological challenges for further empirical research.

Regional Industrial Development: Review of Approaches to Regulation and Determining of Priorities

In the context of increasing economic and political risks, industry is a reliable guarantor of sovereignty of any country that ensures a decent standard of living for its population. The paper examines current global trends of industrial transformation and its regional aspects. The study aims to systematise scientific approaches to determining regional priorities, mechanisms of industrial development and criteria for optimal spatial location, as the evolution of the industrial system leads to their changes. A method of systematic literature review (SLR) was applied based on the analysis of publications relevant to the research purpose and objectives. Modern scientific literature has developed a whole range of concepts to characterise the existing industrial processes: the fourth industrial revolution, Industry 4.0, digital transformation of industry and new industrialisation. The analysis of publications has shown that these concepts are often mixed, thus, this research presented their definitions, areas of intersection and differences. Additionally, the study discusses approaches to regional industrial development and spatial location of industries, which were formulated in the scientific literature in the period 2011– 2021. Three concepts revealing regional aspects of modern industrial development — regional industrial path development, «smart» specialisation and regional industrial identity — were critically analysed. The review of foreign and Russian publications can be used to substantiate niche segments of regional industrial research. The paper identified the following study areas: development of methods for choosing a new industrial path; justification of regional priorities according to “smart” specialisation; creation of effective mechanisms for implementing regional industrial and innovation policies; analysis of correlations between cluster configurations and regional innovation activity.

Greening of regional industrial paths and the role of sectoral characteristics: A study of the maritime and petroleum sectors in an Arctic region

Recent studies on regional industrial path development call for new perspectives and studies of how a region’s endogenous and exogenous processes (e.g. networks, capital, knowledge) influence its industries, and more recently, the greening of those industries. To this end, recent research has focused on increasing our understanding of the roles of firm and non-firm agency and multi-scalar dynamics (e.g. value chains, national and global regulations). However, the literature has naturally tended to focus more on territorial dynamics (e.g. agglomerations, clusters, regional innovation systems) than on the role of sectoral characteristics to explain regional industrial path development and regional industry greening. To address this, we have developed a framework built on the sectoral innovation systems literature to provide a better explanation of the role of sectoral characteristics in regional industrial path development. We argue herein that the greening of regional industrial paths can be strongly influenced by sectoral characteristics (e.g. standards, markets, technological solutions, laws, regulations), and not merely by territorial characteristics. Our theory-based argument is practically exemplified by an investigation of how a new green technology, onshore power supply, has influenced the greening of two industries (i.e. maritime and petroleum) in the rural Arctic region of northern Norway.

Rethinking asset modification in regional industrial path development: toward a conceptual framework

ABSTRACT Asset modification is a key concept in the regional industrial path development literature. Extant research mainly focuses on the process of redeploying pre-existing assets and creating new assets, while little attention has been paid to asset reconfiguration. This article establishes a holistic conceptual framework that describes regional industrial path development as one in which regional actors (1) draw on their pre-existing assets and/or create new assets to prepare assets needed for the new industry; and (2) reconfigure these assets into a configuration that gives birth to the new industry. Finally, a typology linking this understanding to differentiated path development is proposed.

Overcoming barriers to new regional industrial path development: The role of a centre for research‐based innovation

AbstractHow regional industries can develop in an economically sustainable way is high on the research agenda. While the literature on regional change has focused primarily on historical case studies, it has said less about the barriers that hinder the desired change. This article contributes to a better understanding of barriers in regional innovation systems that hamper new regional industrial path development. Furthermore, the article analyses how a new knowledge organisation, the Centre for Research‐based Innovation Offshore Mechatronics in the Agder region of Norway, can contribute to overcoming these barriers. The Centre, which is a policy instrument funded by the Research Council of Norway, aims to contribute to path extension and potentially path modernisation. However, since its foundation, oil prices have dropped severely, resulting in new conditions for the Centre and its partners. The article concludes by discussing whether and how the Centre has contributed to overcoming the barriers that hinder developments beyond path extension.

Legitimation dynamics in industrial path development: new-to-the-world versus new-to-the-region industries

ABSTRACT While economic geography has contributed deep insights into the knowledge-related determinants of industry emergence, less is known about the legitimacy that people confer to the new industries. Based on a comparative case study in the potable water reuse industry (California, United States) and the video games industry (Hamburg, Germany), this article explores the legitimation dynamics in regional industrial path development. We elaborate on how system-building/reconfiguration and institutional work processes differ between industries that are new-to-the-world versus new-to-the-region. Our framework contributes to specifying the embedded agency that supports legitimation and thus path development in these two distinct industry formation trajectories.

Agency and actors in regional industrial path development. A framework and longitudinal analysis

Despite significant interest in regional industrial restructuring in economic geography, surprisingly, scarce attention has been paid to the changing role of agency over time. The current paper develops a framework for understanding the role of multiple types of actors and the agency they exercise for regional industrial path development. The framework is employed in a longitudinal study of industry development in Värmland, Sweden, from forestry towards a bio-economy. The analysis highlights how actors exercise very different types of agency in different periods of regional industrial path development.

Unravelling green regional industrial path development: Regional preconditions, asset modification and agency

Regions across the world are searching for ways to fashion new green growth paths and to promote green shifts in mature industries. The article aims to explore conceptually and based on illustrative empirical examples from the literature how green restructuring unfolds in regions. We propose a framework that explicates how regional preconditions in form of pre-existing industrial structures, organisational support structures, institutional set-ups and natural assets are transformed into various types of green path development through agentic processes of asset modification.

Multi-scalar knowledge bases for new regional industrial path development: toward a typology

ABSTRACT The topic of new regional industrial path development has recently received increasing attention in economic geography. The core idea is that actors in a specific region mobilize both intra-regional and extra-regional resources, especially knowledge, to develop a new regional industrial path. However, the extant literature has not yet fully explored how actors in different types of regions mobilize different forms of knowledge at various spatial scales to develop different types of paths. To fill this gap, we establish an analytical framework combining four key theoretical concepts, that is, new regional industrial path development, regional innovation systems, differentiated knowledge bases and multi-scalar knowledge sourcing. Drawing on this framework, we propose a typology distinguishing six scenarios. To inform future research, the paper outlines some strategies to operationalize this framework and illustrates these through a brief case study.

The dark side of regional industrial path development: towards a typology of trajectories of decline

ABSTRACT Over the past few years, scholarly debates on new path development have attracted increasing attention within the economic geography literature. This work distinguishes various trajectories of regional and industrial evolution. So far, these evolutionary trajectories have been mainly conceptualized as ‘positive’ forms of path development. However, in reality, many regions are undergoing phases that can be characterized as ‘negative’ trajectories. Despite their potentially detrimental social and political effects, negative pathways have to date largely been ignored in the extant literature. This paper seeks to shed light on the ‘dark side’ of path development by outlining a typology of ‘pathways of decline’. Three forms of negative pathways are identified, namely path contraction, path downgrading and path delocalization. Empirical illustrations are provided for each of them.

The multiple roles of demand in new regional industrial path development: A conceptual analysis

This paper contributes to the literature on new regional industrial path development by highlighting the multiple roles that demand can play in regional development. We develop a conceptual framework relating different roles of demand to different types of new path development. Based on the literature on regional development, we differentiate between the role of demand as anonymous consumer, sophisticated buyer, active co-developer, public procurer and norm and value setter. These roles influence different types of new path development, including path extension, path upgrading, path importation, path diversification and path creation. New path development can be triggered by changing norms and values in the society (e.g. environmental concerns and the growing demand for cleaner technologies), public procurement for innovation (governments demand new products or services and thereby steer economic development) or by users modifying existing products or developing novel solutions that are not yet on the market (e.g. user innovations). The various roles of demand, as well as its effect on new regional industrial path development, depend on the geographical context. We argue that taking a nuanced view towards demand will add a novel dimension to the debate on new path development in regions.

Towards a comprehensive understanding of new regional industrial path development

ABSTRACT Path creation is a key concept in economic geography. So far, particularly scholars within evolutionary economic geography have pioneered research on this topic. This paper critically discusses their work and proposes a broader understanding of how new economic activities emerge in regions, which is referred to here as ‘new regional industrial path development’. The paper develops a future research agenda, which stresses the need to develop a multi-actor and multi-scalar approach, to integrate the future into analyses of path development, and to offer a broader view on inter-path relations.

Unrelated knowledge combinations: the unexplored potential for regional industrial path development

The paper engages in a critical discussion of the related variety – regional branching argument and foregrounds a more differentiated perspective on regional industrial path development. It contributes by i) sharpening the definition of key concepts, namely specialisation and diversity, related and unrelated variety, ii) discussing their relevance in local and non-local spaces, iii) scrutinizing related variety as source for regional branching, and iv) developing a conceptual framework capturing the opportunity space for regional structural change that unveils the relevance of path upgrading, path importation, path branching, path diversification, and new path creation as different forms of new path development.