Innovation and regional economic resilience: an exploratory analysis

Abstract

The varying rates of recovery of European regional economies from the 2007 to 2008 economic crisis have raised interesting questions about the sources of economic resilience. Policy discourse has increasingly asserted the role played by innovation in facilitating rapid recovery from economic shocks, whilst evolutionary thinking has highlighted the specific importance of innovation capacity. However, empirical evidence on this is lacking. This paper addresses this gap by providing new empirical analysis of the relationship between regional innovation capacity and the resilience of European regions to the crisis. It finds that regions identified as Innovation Leaders at the time of the crisis were significantly more likely to have either resisted the crisis or recovered quickly from it (i.e. within 3 years). This provides important insights for evolutionary approaches theorising the relationship between innovation and resilience. JEL Classification R1 · O3

Editorial Annals of Regional Science

“…Looking at the most downloaded papers, we see that the majority of the papers (3 out of 5) deals with the topic of resilience (Bristow and Healy 2018;Kitsos and Bishop 2018;Di Caro and Fratesi 2018). There are at least two explanations for this.…”

Varieties of capitalism and resilience clusters: An exploratory approach to European regions

“…Boschma () overcomes this ambiguity by suggesting the important role that related and unrelated variety can play in promoting resilience, particularly the transformation of the economy towards new development paths (see also Xiao et al, ). Other authors have emphasized the importance of innovation, and creativity more generally, in promoting the resilience of economies to economic shocks (Bristow & Healy, ; Cavaco & Machado, ; Crescenzi & Rodríguez‐Pose, ; Pinto & Pereira, ), which speaks to the adaptive theme of resilience. In a similar vein, others identify the important role that skills and higher levels of human capital can play in promoting resilient economies (Polèse, ), as well as the positive role that foreign direct investment (FDI) is suggested to play (Bristow et al, ).…”

Innovation in firms, resilience and the economic downturn: Insights from CIS data in Portugal

“…Martin, Sunley, Gardiner, and Tyler () found that economic structure has an influence on resilience but that many other “region‐specific” factors are prominent, including the relative importance of small enterprises, the degree of foreign ownership of local industry, export orientation, as well as institutional conditions. Innovation was found to play a key role by Bristow and Healey's () study on the response of European regional economies to the 2007 crisis. They found that regions identified as innovation leaders were more likely to have either resisted the crisis or recovered quickly from it.…”

“…As suggested by Bristow and Healey (), socio‐economic resilience, in particular of regions, is crucially connected to firms' innovation capacity and therefore highly dependent on learning processes associated with knowledge. The distinction between exploration—knowledge development—and exploitation—knowledge use—can be here particularly useful (Levinthal & March, ; Winter, ).…”