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Technological relatedness and regional branching

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  • Ron Boschma

    ()

  • Koen Frenken

    ()

Abstract

The relatedness between the technologies used among firms in a region is thought to affect the nature and scope of knowledge spillovers. In this paper, we set out how the concepts of technological relatedness and related variety have enriched recent literature in economic geography. First, applying the notion of related variety has led to new insights in the externalities literature. There is increasing evidence that regions with different but technologically related activities (related variety) benefit more from spillovers. Second, the technological relatedness concept has provided additional insights to the question whether extra-regional linkages matter for regional growth: it is not inflows of extra-regional knowledge per se, but inflows of knowledge that are related to the existing knowledge base of regions that might be crucial. Third, the concept of relatedness has found its way in network analysis. There is evidence that collaborative research projects tend to create more new knowledge when they consist of agents that bring in related competences. Linking network dynamics to the industry life-cycle approach, one expects that cognitive proximity levels between cluster firms will increase over time, with detrimental effects on their performance levels. Fourth, the cluster literature often regards labor mobility as a key mechanism through which knowledge diffuses, but no attention has been paid to relatedness until recently. And fifth, studies demonstrate that countries and regions tend to expand into sectors that are closely related to their existing activities. To the extent that new industries emerge from related industries, the sectoral composition of a regional economy affects the diversification opportunities of regions in the long run. This process of sectoral branching occurs primarily at the regional level, because it becomes manifest through a number of knowledge transfer mechanisms (i.e. spinoff activity, firm diversification, labor mobility and networking) that tend to be geographically bounded.

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Bibliographic Info

Paper provided by Utrecht University, Section of Economic Geography in its series Papers in Evolutionary Economic Geography (PEEG) with number 0907.

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Length: 17 pages
Date of creation: Jun 2009
Date of revision: Jun 2009
Handle: RePEc:egu:wpaper:0907

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Related research

Keywords: evolutionary economic geography; technological relatedness; regional branching; related variety;

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Cited by:
  1. Harald Bathelt & Andrew Munro & Ben Spigel, 2011. "Challenges of Transformation: Innovation, Re-bundling and Traditional Manufacturing in Canada's Technology Triangle," Papers in Evolutionary Economic Geography (PEEG) 1111, Utrecht University, Section of Economic Geography, revised Jun 2011.
  2. Ron Boschma & Asier Minondo & Mikel Navarro, 2012. "The emergence of new industries at the regional level in Spain. A proximity approach based on product-relatedness," Papers in Evolutionary Economic Geography (PEEG) 1201, Utrecht University, Section of Economic Geography, revised Jan 2012.
  3. Fredin, Sabrina, 2012. "The Dynamics and Evolution of Local Industries – The case of Linköping," CIRCLE Electronic Working Papers 2012/7, Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy.
  4. Giulio Cainelli & Donato Iacobucci, 2012. "Agglomeration, Related Variety, and Vertical Integration," Economic Geography, Clark University, vol. 88(3), pages 255-277, 07.
  5. Frank Neffke & Martin Henning, 2011. "Inter-industry linkages in local economies," ERSA conference papers ersa11p1075, European Regional Science Association.
  6. Koen Frenken & Elena Cefis & Erik Stam, 2011. "Industrial dynamics and economic geography: a survey," Eindhoven Center for Innovation Studies (ECIS) working paper series 11-07, Eindhoven Center for Innovation Studies (ECIS).
  7. Porter, Julie, 2011. "Regional Economic Resilience and the Deepwater Horizon Oil Spill: The Case of New Orleans' Tourism and Fishing Clusters," Spatial and Organizational Dynamics Discussion Papers 2011-12, CIEO-Research Centre for Spatial and Organizational Dynamics, University of Algarve.

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