Regional industrial path development in different regional innovation systems: A conceptual analysis

The notion of path dependent regional industrial development has recently received increasing attention in economic geography, innovation studies and related fields. A core idea is that pre-existing industrial and institutional structures constitute the regional environment in which current activities occur and new activities arise. This may lead to a high degree of inertia of industrial structures and reflects the persistence of region-specific institutions, social forms and cultural traditions. The aim of this paper is to take a more nuanced view on regional economic development and to explore conceptually how various types of regions can renew themselves by moving beyond existing paths. Scholarly contributions to regional industrial path development have often emphasised firm-specific routines, norms and tacit knowledge that first of all underpin path extension, i.e., incremental product and process innovations in existing industries and along established technological paths. The paper extends this approach by looking at alternative paths that point to different forms of transformation of regional economies. A distinction between path renewal (branching of existing industries into different but related ones) and path creation (emergence of new industries) is drawn. The paper also extends the mainly micro-level and firm-based views of evolutionary economic geography with an institutional perspective, offered by the regional innovation system (RIS) concept. This enables us to capture the influence of the wider regional environment on the innovation capability of firms. We distinguish between different types of RISs: i) organisationally thick & diversified RISs, ii) organisationally thick & specialised RISs, and iii) organisationally thin RISs. The paper analyses in a conceptual way the relation between these RIS types and forms of regional industrial path development. We demonstrate that various types of regions, with their specific RISs, tend to transform themselves in different ways, i.e., they can be expected to embark on different development paths. We also discuss adequate policy approaches for the various types of regions.