Leveraging artificial intelligence for new regional path creation in peripheral regions

Recent advances in artificial intelligence (AI) give rise to new opportunities for regional path creation in peripheral regions when local capabilities are combined with the transformative potential of emerging technologies. Drawing on literature on the role of narratives and the influence of agency on path-development processes, we examine how a peripheral region can harness AI to move toward more resilient regional path creation archetypes. The study employs a novel approach consisting of an in-depth case study of the Faroe Islands, based on multiple secondary sources and key informant engagement, combined with systematic morphological scenario analysis. We identify three regional trajectories involving institutional reinforcement to move from persistent stagnation toward Faroese AI excellence, involving industry specialization to move toward technological elite with support, or involving grassroots mobilization to move toward grassroots AI leadership. Our findings reveal that locally grounded narratives about AI technologies can widen opportunity spaces in peripheral regions by aligning political vision, societal legitimacy, and native language assets. Peripheral regions seeking transformations driven by AI technologies should actively leverage their existing strengths, such as unique cultural or natural resources, while addressing fundamental challenges of political commitment, societal acceptance, and local language integration.