Regional Path Creation Research Articles

Opportunities or risks? Venture capital investments and regional path creation: Evidence from China

Venture capital, as an expectation of investors, has become an important vehicle for regional financialization. From the perspective of evolutionary economic geography, we figure out that venture capital investments in China significantly contribute to regional product expansion. Such a positive effect is not only concentrated in the core cities in the investment network but also benefits the periphery counterparts. However, venture capital investments may not completely break the path lock-in of left-behind regions to enhance their economic resilience. In this sense, the uneven geographic development led by venture capital should raise the awareness of policymakers and planners.

Industrial path creation, a business case approach: Daniel Alonso Group from steelmaking to wind power

The need for European reindustrialisation has boosted the debate on regional path creation. Through a business case approach, this work contributes to this literature by exploring the history of Daniel Alonso Group, a paradigmatic example of an entire sectorial trajectory. Born in the steelmaking region of Asturias (Spain) in 1957 as a small metalworking workshop, DAG is nowadays represented worldwide by Windar Renovables, a top firm in the wind power sector. DAG reflects the 3-stage cumulative process that allowed the Asturian metalworking sector to survive industrial restructuring and create new development paths: (1) birth around the steelmaking industry, (2) endogenous growth based on self-reinforcing dynamics (3) delocking, diversification, and international expansion moving towards Industry 4.0.

Renewable energy and industrial development in pioneering and lagging regions: the offshore wind industry in southern Denmark and Normandy

Abstract The increasing deployment of renewable energy (RE) hinges on the development and upscaling of manufacturing and logistics capacities, offering industrial development opportunities for regions and countries. In this paper, we analyse how contextual factors pertaining to pre-existing regional assets and multi-scalar institutional environments influence RE-related industrial development at the regional scale. To this avail, we purposefully selected two contrasting regional case studies of offshore wind energy-related industry developments in Southern Denmark (a pioneering region) and Normandy (France, a latecomer region) and discuss developments until 2020. Our qualitative analysis is informed by theoretical and empirical insights from the economic geography and sustainability transitions research fields. The identified contrasting regional path creation processes reflect substantial differences in context conditions, providing insights into how regions can capture value in the ongoing energy transitions.

Renewable energy transition in Senegal? Exploring the dynamics of emerging paths to a sustainable energy system

Research into the transition of energy systems has attracted considerable attention in recent years from a wide range of disciplines and perspectives. From evolutionary economic geography (EEG), scholars have emphasized the processes underlying the formation of new energy paths in energy system transitions. These processes have been well studied in Global North countries, but insights into the processes shaping the energy transition in sub-Saharan Africa are still limited. This study provides a contribution to fill that gap by exploring the emerging energy paths in Senegal through the lens of EEG, using the framework of regional path creation processes to analyze qualitative interview data from 17 experts in the Senegalese energy sector. Senegal is an instructive country to study, as its energy sector is undergoing substantial reform that has accelerated the deployment of large-scale renewable energy projects in recent years. The study uncovers three parallel evolving energy paths stemming from path transplantation, indigenous path creation, and path upgrading. Each path differs greatly in its legitimation and in the role of institutions as enablers. These results not only contribute to the ongoing scientific debate; but also provide insights for development agencies, national and regional institutions, NGOs and private actors involved in the Senegalese energy system.

Strategic coupling, path creation and diversification: Oil-related development in the ‘Straits Region’ since 1959

A growing body of literature in evolutionary economic geography (EEG) and global production networks (GPN) have pointed out the role of institutions in addressing questions of subnational regional path creation and uneven development. Through a synthesis of the EEG and GPN approaches, this paper proposes a framework to highlight the roles and functions performed by state-linked actors in the diversification and path creation. The trajectory of mid-stream oil-related development in Singapore and the wider Straits region since 1959 was used to illustrate how the state implements its industrial strategies and policies through different forms of state and state-linked actors over time, which in turn generates a symbiotic state-business relation for related diversification and subsequent coupling-recoupling-decoupling and path creation dynamics. Specifically, the establishment of oil-related business in Singapore (a city state without oil reserves) was examined through the instrumental roles and functions performed by various state-linked actors on the establishment of structural coupling with TNCs on oil storage facilities between 1959 and 1986, and then functional coupling with TNCs on oil and commodities trading between 1987 and 1997 before decoupling the lower value-added oil storage businesses and developing as a regional energy trading hub since 1998.

The role of critical conjunctures in regional path creation: a study of Industry 4.0 in the Silesia region

ABSTRACT Conceptualizations of path creation proposed in recent years neglect the role of time and temporal mechanisms. This paper argues that a more comprehensive understanding of inter-path relations that incorporates both agency and relationships among temporal sequences can be achieved using the concept of critical conjuncture, which is overlooked in the contemporary path-creation literature. This paper draws on a case study of the industrial region of Upper Silesia, Poland, where a new regional trajectory is emerging as the result of the unpredicted critical conjuncture of the endogenously driven path of the information technology services sector and the exogenous foreign direct investment-based path of the automotive industry.

Going beyond the line of sight: institutional entrepreneurship and system agency in regional path creation

ABSTRACT This paper explores the scope for system-level agency in new path creation. We identify the roles and challenges for state-led path creation and illustrate them through a case study of a novel and ongoing set of institutional entrepreneurship and system-building activities in the Galicia region of Spain, looking at the practices, relational processes, multilevel lobbying and regulatory change associated with an ambitious initiative to grow a new industry around uncrewed aerial vehicles (UAVs) through anchoring knowledge and legitimacy-building.

Technological revolutions, socio-technical transitions and the role of agency: Värmland’s transition to a regional bio-economy

ABSTRACT The paper draws on the literatures on techno-economic paradigms and socio-technical transitions to analyse the impact of technological revolutions on regional development. Based on interview data collected from policymakers and regional firms, the paper adopts a multi-scalar approach to analyse the role of agency and strategy formulation in the emergence of a new bio-based techno-economic paradigm and the early stages of a process of socio-technical transition towards a forest-based bio-economy in the Värmland Region of Sweden. The paper contributes to an understanding of the role of strategic agency in new regional path creation in the context of radically technological change.

Variance of destination region image according to multi-dimensional proximity: A case of the Greater Bay Area

Due to increasing accessibility and mobility, tourism destinations are broadening their spatial boundaries and cultural contexts. This study took as an example the Guangdong–Hong Kong–Macao Greater Bay Area, which consists of 11 cities, and explored how the new path creation of a regional tourism destination reshapes people's cognitive and affective images of the destination on a megalopolitan scale. Destination region image is neither a simple aggregation of the images of member cities nor dictated by the image of a single well-known destination. Both the physical and conceptual connections among multiple cities within the destination region are key nodes of the inclusive image of the region. Connectivity is not only embedded within institutional relations and discourses, but also represented through multi-functional tourism networks and regional culture. The study further explored the image heterogeneity of three proximity-based tourist clusters, divided in terms of cultural and geographical distance and previous travel experience. The research findings of this study can inform planning and marketing strategies for the path creation and development of metropolitan destination regions. • Three phases of path development in the Greater Bay Area are traced. • People's new cognitive system in response to regional path creation is identified. • The key node is connectivity in institutions, networks, and regional culture. • Image heterogeneity among proximity-based tourist clusters is identified. • Variances of destination region image have implications for destination innovation.

The role of system-building agency in regional path creation: insights from the emergence of artificial intelligence in Montreal

ABSTRACT The emergence of new industries that are not closely related to existing regional paths remains an underexplained process in evolutionary economic geography. This paper responds to this gap through a case study of a maturing ecosystem of activity related to artificial intelligence in Montreal, Canada. Conceptually it brings together recent thinking in economic geography about agency in path development with complementary concepts from the literature on technological innovation systems. The empirical findings demonstrate the role of multiple agents in system-building and legitimation activities that have varied across pre-formative and formative phases of new path development in this analytical knowledge field.

Legitimation, institutions and regional path creation: a cross-national study of offshore wind

ABSTRACT This paper assesses legitimation as a crucial dimension of industry emergence, addressing the neglect of institutional and political aspects of path creation in economic geography. It investigates how the legitimacy of emerging industries is built up over time and examines differences in legitimation across space. The paper focuses on the evolution of legitimation narratives in the context of national and regional differences in institutions, actors and assets. Based on a cross-national study of the offshore wind industry, the paper argues that cost reduction and value creation have made important contributions to legitimation in addition to climate change and energy security.

“Making energy transition work”: Bricolage in Austrian regions’ path-creation

In the quest for energy transition pathways, energy regions have become the instrument of choice in peripheralized Austrian regions. This paper unveils why “locked-in" regions usually struggling with systemic change can still create alternative paths. Based on the bricolage concept and the ASID heuristic, we develop a framework to examine the transition processes of three Austrian energy regions (Güssing, Hermagor, Murau). The case studies illustrate the significance of bricolage in mobilizing agential, structural, institutional and discursive resources towards regional path-creation, and show how strategic agents skillfully assemble these resources to mold the transition process in their favor. We thus conclude that (1) the bricolage approach can be a valuable analytical lens for all aspects of regional development in “locked-in” regions, and (2) the energy regions instrument reinforces existing power structures, suggesting why inclusive energy transitions might still fail despite resourceful and robust plans.

Rethinking Path Creation: A Geographical Political Economy Approach

A burgeoning strand of evolutionary economic geography (EEG) research is addressing questions of regional path creation, based on the idea that place-specific legacies and conditions play a critical role in supporting the emergence of new economic activities. Yet there has been little effort thus far to take stock of this emerging body of research. In response, the aims of this article are to offer a fresh synthesis of recent work and to develop a broader theoretical framework to inform future research. First, it presents a critical appraisal of the state of the art in path creation research. In an effort to address identified gaps in EEG research, this incorporates insights from sociological perspectives, the global production networks approach, and transition studies. Second, the article’s development of a systematic theoretical framework is based on the identification of key dimensions of path creation and their constitutive interrelations. This contribution is underpinned by a geographical political economy (GPE) approach that provides the ontological basis for the integration of the five key dimensions of path creation within an overarching framework and the positioning of regional processes in relation to the broader dynamics of uneven development. Informed by GPE, the argument is that knowledgeable actors, operating within multiscalar institutional environments, create paths through the strategic coupling of regional and extraregional assets to mechanisms of path creation and associated markets. To inform further research, the article outlines four concrete propositions regarding the operation of path creation processes in different types of regions and explores these through case studies of Berlin and Pittsburgh.

Path creation, global production networks and regional development: A comparative international analysis of the offshore wind sector

The question of how regions and nations develop new sources of industrial growth is of recurring interest in economic geography and planning studies. From an evolutionary economic geography (EEG) perspective, new growth paths emerge out of existing economic activities and their associated assets and conditions. In response to the micro-economic and endogenous focus of much EEG research, this paper utilises a broader evolutionary perspective on path creation which stresses the dynamic interplay between four sets of factors: regional assets; key economic and organisational actors; mechanisms of path creation; and multi-scalar institutional environments and policy initiatives. Reflecting the importance of extra-regional networks and institutions, this framework is also informed by the Global Production Networks (GPN) approach, which highlights the process of strategic coupling between firms and regions and its political and institutional mediation by state institutions at different spatial scales. We deploy this framework to investigate regional path creation in the context of renewable energy technologies, focusing specifically on the offshore wind industry. We adopt a comparative cross-national approach, examining the evolution of offshore wind in Germany, the UK and Norway. Of the three cases, Germany has developed the most deep-rooted and holistic path to date, characterised by leading roles in both deployment and manufacturing. By contrast, path creation in the UK and Norway has evolved in more partial and selective ways. The UK’s growth path is developing in a relatively shallow manner, based largely upon deployment and ‘outside in’ investment, whilst Norway’s path is emerging in an exogenous, ‘inside-out’ fashion around a fairly confined set of actors and deployment and supply functions. In conclusion, the paper emphasises the important role of national states in orchestrating the strategic coupling of regional and national assets to particular mechanisms of path creation.

Connecting to Global Production Networks: Challenges for Regional Actors in Northern Norway

Over the past few years, Northern Norway has been perceived as a land of opportunity. Announcements of offshore oil and gas discoveries off the coast of Finnmark have contributed to increased market activity in related sectors like service and construction. However, regional firms continue to score at the bottom of innovation indexes and seldom compete on international markets. Based on indepth interviews with representatives from key businesses in three sectors in Northern Norway, we examine the bottlenecks that have prevented these firms from gaining new market positions through the interplay of these regional firms and agencies with the Global Production Network (GPN). We adopt the concept of ‘‘strategic coupling’’ and explore whether an actor approach can contribute to an improved understanding of this relationship. The paper demonstrates that regional strategies and public policy differ between the sectors. Public policy is important for regional firms within the petroleum sector. However, the funds available for regional firms continue to be limited due to the size and relevance of the measures. In the construction sector, public policy instruments are important, but not sufficiently adapted to the challenges these firms face. While the petroleum sector receives support and backing from regional agencies in order to connect to GPN, the wind power sector is actively hindered by the same agencies. The former have the opportunity to take part in new regional path creation; the latter have experienced a lack of strategic cooperation and face the risk of reducing strategic couplings to GPN, leading to path dependent processes that lock these firms into traditional and low-tech sectors.(Published: May 2016)Citation: T. Nilsen and S. Karlstad. “Connecting to Global Production Networks: Challenges for Regional Actors in Northern Norway.” Arctic Review on Law and Politics, Vol. 7, No. 1, 2016, pp. 42–59. http://dx.doi.org/10.17585/arctic.v7.207

The role of elites in the co-evolution of international financial markets and financial centres: The case of Luxembourg

This article investigates the co-evolution of Luxembourg’s financial centre with influential developments on a macro scale since the late 1950s and employs insights from the evolutionary approaches of regional path creation and dependence. Framing the narrative from a historical perspective, this case study illustrates how a unique conjuncture of local conditions and intentional decision making by a small group of influential individuals in Luxembourg embraced and exploited the new opportunities of the internationalizing financial markets, thus forming the birth of Luxembourg’s financial economy. The article argues that only the role of the elite during this time makes the creation of Luxembourg’s financial centre plausible, whilst Luxembourg’s continuing financial path has been accompanied by a changing composition of previously local and often individualistic elite. The changing conditions of globalization have brought a new type of elite to the fore, in particular the organized power of large banks, which continue to reshape Luxembourg’s institutional environment in different ways. The fundamental shift in power between Luxembourg’s financial and political interest groups has also spawned increasingly complex interlinkages between institutional architectures across different geographical scales. By strengthening the conceptualization of the particular role of agency, this article adds knowledge to the prevailing concepts of (regional) path dependence in general and to the contingent development in financial centres in particular.

The Effects of Exogenous Shocks on the Development of Regional Innovation Systems

Drawing on previous studies related to the evolutionary aspects of regional innovation systems (RIS), this paper examines how an exogenous shock reduced organizational thinness, fragmentation and lock-in and thereby facilitated path creation and RIS emergence in a peripheral region. A longitudinal case study approach, based on primary data from 39 interviews conducted between 2008 and 2012, is used to investigate how a region was affected by the sudden entry and subsequent activity of a multinational oil company. A multi-level analysis illustrates how this exogenous shock facilitated change at the firm, public authority and macro (regional) levels and thus provides a holistic understanding of the complex mechanisms that underlie regional transformation. The analysis illustrates how the entry of the oil company reduced organizational thinness by stimulating the establishment of external firms. The existing regional actors then managed to reduce their organizational lock-in by adapting their skills and resource bases to new knowledge provided through interfirm relationships (reduced fragmentation), and this reduced organizational lock-in and fragmentation ultimately strengthened the industrial structure and further contributed to regional path creation. A number of innovations were observed, and in combination with the “thickened” institutional structure, this represented the means for an emerging RIS.

Policy activism and regional path creation: the promotion of offshore wind in North East England and Scotland

This paper argues for a broad evolutionary political economy understanding of local and regional path creation. We adopt a multi-actor and multi-scalar perspective, focusing on the roles of the state and regional policy interventions in mediating the creation of growth paths. The framework interprets attempts in North East England and Scotland to support path creation in the offshore wind sector through evolutionary inspired contextual policies. We demonstrate that the realisation of the these policies remains crucially conditioned by the dynamic and complex interplay between the national political economy of energy market regulation, industrial policy and inter-regional asymmetries in the governance of economic development.

Transversality and Transition: Green Innovation and New Regional Path Creation

Since Paul David first published his economic histories of path-dependent innovation, the subject has exerted fascination upon scholars of innovation and technological change and, latterly, regional scientists and economic geographers. This paper speaks of the third and fourth of these communities in the main, though it may have theoretical and empirical elements of interest to the first two as well. It begins with an overview of recent perspectives and critiques concerning the relevance of the path dependence concept to the understanding of regional economic development and its associated governance. It then goes on to discuss the contribution of evolutionary economic geography to thinking about “branching” from path dependence and the creation of new paths. Evidence for key generic spatial processes of path transition is provided before the main content of the paper concludes with new insights into the contributions of regional innovation policy to path evolution. Conclusions are then drawn.

Path dependence and regional economic evolution

In recent years, economic geographers have seized on the concepts of `path dependence' and `lock-in' as key ingredients in constructing an evolutionary approach to their subject. However, they have tended to invoke these notions without proper examination of the ongoing discussion and debate devoted to them within evolutionary economics and elsewhere. Our aim in this paper, therefore, is, first, to highlight some of the unresolved issues that surround these concepts, and, second, to explore their usefulness for understanding the evolution of the economic landscape and the process of regional development. We argue that in many important aspects, path dependence and `lock-in' are place-dependent processes, and as such require geographical explanation. However, the precise meaning of regional `lock-in', we contend, is unclear, and little is known about why it is that some regional economies become locked into development paths that lose dynamism, whilst other regional economies seem able to avoid this danger and in effect are able to `reinvent' themselves through successive new paths or phases of development. The issue of regional path creation is thus equally important, but has been rarely discussed. We conclude that whilst path dependence is an important feature of the economic landscape, the concept requires further elaboration if it is to function as a core notion in an evolutionary economic geography.