Innovation Policies for Regional Structural Change: Combining Actor-Based and System-Based Strategies

Abstract

There seems to be a widespread consensus in academic and policy circles that the promotion of current economic strongholds and specialisations is no longer sufficient in order to ensure the long-term competitiveness of regions. New policy concepts such as smart specialisation emphasize the need to break with past practices and design and implement innovation strategies that boost regional structural change, i.e. policies that support regional economies to renew their industrial base by diversifying into new but related economic fields or creating entirely new sectors. This new strategic orientation for regional innovation policies has essentially been informed by evolutionary economic geography, which has offered novel insights into how regional economies transform over time and how new growth paths come into being. Applying a regional innovation system (RIS) perspective, recent work has enhanced our understanding of how such processes of regional economic change vary across different types of regions. RIS differ enormously in their capacity to develop new growth paths due to pronounced differences in endogenous potentials and varying abilities to attract and absorb exogenous sources for new path development. The policy implications following from these recent findings on the uneven geography of new path development have hardly been thoroughly discussed so far. General claims such as the need to avoid "one size fits all" strategies and develop place-based policies for regional industrial change remain vague and provide little guidance in this regard.The aim of this paper is to identify opportunities and limitations of regional innovation policies to promote new path development in different types of RIS. We distinguish between (1) organisationally thick and diversified RIS, (2) organisationally thick and specialized RIS and (3) thin RIS. Regarding path development, a distinction is drawn between the extenstion, modernization, importation, branching and creation of industrial paths, reflecting various degrees of radicalness of change in regional economies. The paper offers a conceptual analysis of conditions and influences that enable and constrain new path development in each RIS type and outlines the contours of policy strategies that are suitable for promoting new path development in those different types of RIS.Our point of departure is the well-known distinction between system-based and actor-based policy approaches. The former aims to improve the functioning of the RIS by targeting system failures, promoting local and non-local knowledge flows and adapting the organisational and institutional set-up of the RIS. Actor-based strategies, in contrast, support entrepreneurs and innovation projects by firms and other stakeholders. We argue that both strategies will have only a limited impact on regional economic change when applied alone. However, if they are combined, they are well suited to promote new path development. The paper discusses which specific combinations of system-based and actor-based poli...

Innovation networks and green restructuring: Which path development can EU Framework Programmes stimulate in Norway?

“…However, policy to support restructuring must strike the right balance between the two processes. Restructuring policies that place too much faith in path creation through basic and applied science may struggle to mobilise actors in peripheral regions or regions without a strong science base (Tödtling & Trippl 2005;Isaksen et al 2018). They may also fail to reach out to industry.…”

“…Different regional innovation systems are associated with different potential development paths and related policy and networking requirements. Fostering path modernisation (upgrading of existing industries based on new technologies) and branching (diversification into related industries) is important in 'thick and specialised' systems such as the oil-dependent Norwegian regions (Isaksen et al 2018). A recent study of the transition from offshore oil and gas to wind suggests how diversifying into related industries (branching) is a critical factor in enabling new path development in Norway (Steen & Hansen 2014).…”

“…These normally regional processes require different types of policy stimulus. Branchingmoving into new but related industries (Boschma 2017;Grillitsch et al 2018;Isaksen et al 2018)requires mobilising existing industries and bringing in complementary knowledge through international collaboration (Trippl et al 2017). Branching is more important in industrial regions with a need for restructuring.…”

Regional innovation policies for new path development – beyond neo-liberal and traditional systemic views

“…For more fine-grained typologies of new path development, see Martin and Sunley (2006), Tödtling and Trippl (2013) and Isaksen et al (2018). 2.…”

“…Whilst early contributions had placed a strong emphasis on technological relatedness, more recent work has begun to forge a broader understanding of the notion (Carvalho & Vale, 2018;Cooke, 2012aCooke, , 2012bTanner, 2014Tanner, , 2016 and to argue for a broader multi-actor and multi-scalar approach (MacKinnon et al, 2018;Zukauskaite et al, 2017). The creation of radically new industrial paths (or what can also be called unrelated diversification, see Boschma, 2017) represents a more radical form of change since it implies the emergence of entirely new industries or business models based on scientific discoveries, radical new technologies or forms of organization, user-driven innovation or social innovation (Isaksen, Tödtling, & Trippl, 2018). Key processes in 'seeding' new paths may include the establishment of new companies and spin-offs from technology-based firms (Feldman, 2007), accumulation and exploitation of knowledge in local universities (Vallance, 2016), as well as the inflow of entrepreneurs, firms, knowledge and other resources from outside (Binz, Truffer, & Coenen, 2016;Dawley, 2014;Trippl, Grillitsch, & Isaksen, 2017).…”