IDEAS home Printed from https://ideas.repec.org/p/egu/wpaper/2323.html
   My bibliography  Save this paper

Turning technological relatedness into industrial strategy: The productivity effects of Smart Specialisation in Europe

Author

Listed:
  • Giacomo Lo Conte
  • Andrea Mina
  • Silvia Rocchetta

Abstract

In this paper we explore the impact of place-based innovation policy in Europe. We focus on the effects of Smart Specialisation strategies on the labour productivity of regional economies. We design an analytical framework that takes into account the entrepreneurial discovery process through which the policy is implemented, and connect the technological relatedness of regions with their specialisation choices. We use an IV estimation approach capable of handling endogeneity problems, and apply it to an extensive dataset of 102 NUTS2 regions extracted from the European Commission Smart Specialisation Portal. The results show that Smart Specialisation strategies increase labour productivity as long as the priorities are set in sectors related to pre-existing technological capabilities, indicating the fundamental importance of path-dependency in diversification choices. The findings deepen our understanding of regional development and innovation strategies, and have relevant implications for the implementation of appropriate policy instruments.

Suggested Citation

  • Giacomo Lo Conte & Andrea Mina & Silvia Rocchetta, 2023. "Turning technological relatedness into industrial strategy: The productivity effects of Smart Specialisation in Europe," Papers in Evolutionary Economic Geography (PEEG) 2323, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Dec 2023.
    • Handle: RePEc:egu:wpaper:2323
    as

    Download full text from publisher

    File URL: http://econ.geo.uu.nl/peeg/peeg2323.pdf
    File Function: Version December 2023
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Riccardo Crescenzi & Mara Giua, 2020. "One or many Cohesion Policies of the European Union? On the differential economic impacts of Cohesion Policy across member states," Regional Studies, Taylor & Francis Journals, vol. 54(1), pages 10-20, January.
    2. Feldman, Maryann P. & Kogler, Dieter F., 2010. "Stylized Facts in the Geography of Innovation," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 381-410, Elsevier.
    3. Ron Boschma & Asier Minondo & Mikel Navarro, 2013. "The Emergence of New Industries at the Regional Level in S pain: A Proximity Approach Based on Product Relatedness," Economic Geography, Clark University, vol. 89(1), pages 29-51, January.
    4. Silvia Rocchetta & Andrea Mina & Changjun Lee & Dieter F Kogler, 2022. "Technological knowledge spaces and the resilience of European regions," Journal of Economic Geography, Oxford University Press, vol. 22(1), pages 27-51.
    5. Artur Santoalha, 2019. "Technological Diversification and Smart Specialization: the role of cooperation," Working Papers on Innovation Studies 20190109, Centre for Technology, Innovation and Culture, University of Oslo.
    6. Frank Neffke & Martin Henning & Ron Boschma, 2011. "How Do Regions Diversify over Time? Industry Relatedness and the Development of New Growth Paths in Regions," Economic Geography, Clark University, vol. 87(3), pages 237-265, July.
    7. Mari José Aranguren & Edurne Magro & Mikel Navarro & James R. Wilson, 2019. "Governance of the territorial entrepreneurial discovery process: looking under the bonnet of RIS3," Regional Studies, Taylor & Francis Journals, vol. 53(4), pages 451-461, April.
    8. Pierre-Alexandre Balland & Ron Boschma & Joan Crespo & David L. Rigby, 2019. "Smart specialization policy in the European Union: relatedness, knowledge complexity and regional diversification," Regional Studies, Taylor & Francis Journals, vol. 53(9), pages 1252-1268, September.
    9. Paul Bishop & Peter Gripaios, 2010. "Spatial Externalities, Relatedness and Sector Employment Growth in Great Britain," Regional Studies, Taylor & Francis Journals, vol. 44(4), pages 443-454.
    10. De Noni, Ivan & Ganzaroli, Andrea & Pilotti, Luciano, 2021. "Spawning exaptive opportunities in European regions: The missing link in the smart specialization framework," Research Policy, Elsevier, vol. 50(6).
    11. Stefano Breschi & Francesco Lissoni, 2003. "Mobility and Social Networks: Localised Knowledge Spillovers Revisited," KITeS Working Papers 142, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Mar 2003.
    12. Silvia Rocchetta & Andrea Mina, 2019. "Technological coherence and the adaptive resilience of regional economies," Regional Studies, Taylor & Francis Journals, vol. 53(10), pages 1421-1434, October.
    13. Emanuela Marrocu & Raffaele Paci & David Rigby & Stefano Usai, 2023. "Evaluating the implementation of Smart Specialisation policy," Regional Studies, Taylor & Francis Journals, vol. 57(1), pages 112-128, January.
    14. Anastasia Panori & Christina Kakderi & Ilias Dimitriadis, 2022. "Combining technological relatedness and sectoral specialization for improving prioritization in Smart Specialisation," Regional Studies, Taylor & Francis Journals, vol. 56(9), pages 1454-1467, September.
    15. C. A. Hidalgo & B. Klinger & A. -L. Barabasi & R. Hausmann, 2007. "The Product Space Conditions the Development of Nations," Papers 0708.2090, arXiv.org.
    16. David J. Teece & Richard Rumelt & Giovanni Dosi & Sidney Winter, 2000. "Understanding Corporate Coherence: Theory and Evidence," Chapters, in: Innovation, Organization and Economic Dynamics, chapter 9, pages 264-293, Edward Elgar Publishing.
    17. Richard Nelson, 1995. "Co-evolution of Industry Structure, Technology and Supporting Institutions, and the Making of Comparative Advantage," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 2(2), pages 171-184.
    18. David L. Rigby, 2015. "Technological Relatedness and Knowledge Space: Entry and Exit of US Cities from Patent Classes," Regional Studies, Taylor & Francis Journals, vol. 49(11), pages 1922-1937, November.
    19. Donato Iacobucci & Enrico Guzzini, 2016. "Relatedness and connectivity in technological domains: missing links in S3 design and implementation," European Planning Studies, Taylor & Francis Journals, vol. 24(8), pages 1511-1526, August.
    20. David L. Rigby & Christoph Roesler & Dieter Kogler & Ron Boschma & Pierre-Alexandre Balland, 2022. "Do EU regions benefit from Smart Specialisation principles?," Regional Studies, Taylor & Francis Journals, vol. 56(12), pages 2058-2073, December.
    21. Koen Frenken & Frank Van Oort & Thijs Verburg, 2007. "Related Variety, Unrelated Variety and Regional Economic Growth," Regional Studies, Taylor & Francis Journals, vol. 41(5), pages 685-697.
    22. Mariana Mazzucato, 2013. "Financing innovation: creative destruction vs. destructive creation," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 22(4), pages 851-867, August.
    23. Dieter F. Kogler & David L. Rigby & Isaac Tucker, 2013. "Mapping Knowledge Space and Technological Relatedness in US Cities," European Planning Studies, Taylor & Francis Journals, vol. 21(9), pages 1374-1391, September.
    24. Tom Broekel & Ron Boschma, 2012. "Knowledge networks in the Dutch aviation industry: the proximity paradox," Journal of Economic Geography, Oxford University Press, vol. 12(2), pages 409-433, March.
    25. Nicoló Barbieri & François Perruchas & Davide Consoli, 2020. "Specialization, Diversification, and Environmental Technology Life Cycle," Economic Geography, Taylor & Francis Journals, vol. 96(2), pages 161-186, March.
    26. Freeman, Robert N., 1987. "The association between accounting earnings and security returns for large and small firms," Journal of Accounting and Economics, Elsevier, vol. 9(2), pages 195-228, July.
    27. Artur Santoalha, 2019. "Technological diversification and Smart Specialisation: the role of cooperation," Regional Studies, Taylor & Francis Journals, vol. 53(9), pages 1269-1283, September.
    28. Pier Saviotti & Koen Frenken, 2008. "Export variety and the economic performance of countries," Journal of Evolutionary Economics, Springer, vol. 18(2), pages 201-218, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Quatraro, Francesco & Scandura, Alessandra, 2020. "Regional patterns of unrelated technological diversification: the role of academic inventors," Department of Economics and Statistics Cognetti de Martiis LEI & BRICK - Laboratory of Economics of Innovation "Franco Momigliano", Bureau of Research in Innovation, Complexity and Knowledge, Collegio 202001, University of Turin.
    2. Lars Mewes & Tom Broekel, 2020. "Subsidized to change? The impact of R&D policy on regional technological diversification," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 65(1), pages 221-252, August.
    3. Hidalgo, César A., 2023. "The policy implications of economic complexity," Research Policy, Elsevier, vol. 52(9).
    4. Abbasiharofteh, Milad & Kogler, Dieter F. & Lengyel, Balázs, 2023. "Atypical combinations of technologies in regional co-inventor networks," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 52(10), pages 1-1.
    5. E. Marrocu & R. Paci & D. Rigby & S. Usai, 2020. "Smart Specialization Strategy: any relatedness between theory and practice?," Working Paper CRENoS 202004, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    6. Sandro Montresor & Gianluca Orsatti & Francesco Quatraro, 2023. "Technological novelty and key enabling technologies: evidence from European regions," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 32(6), pages 851-872, August.
    7. Elekes, Zoltán, 2016. "A regionális növekedés új tényezői az evolúciós gazdaságföldrajzi kutatásokban. A változatosság és a technológiai közelség [The new factors of regional growth in research into evolutionary economic," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(3), pages 307-329.
    8. Silvia Rocchetta & Andrea Mina & Changjun Lee & Dieter F Kogler, 2022. "Technological knowledge spaces and the resilience of European regions," Journal of Economic Geography, Oxford University Press, vol. 22(1), pages 27-51.
    9. Ron Boschma, 2018. "The geographical dimension of structural change," Papers in Evolutionary Economic Geography (PEEG) 1839, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Nov 2018.
    10. Matthias Firgo & Peter Mayerhofer, 2015. "Wissens-Spillovers und regionale Entwicklung - welche strukturpolitische Ausrichtung optimiert des Wachstum?," Working Paper Reihe der AK Wien - Materialien zu Wirtschaft und Gesellschaft 144, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik.
    11. Gergő Tóth & Zoltán Elekes & Adam Whittle & Changjun Lee & Dieter F. Kogler, 2022. "Technology Network Structure Conditions the Economic Resilience of Regions," Economic Geography, Taylor & Francis Journals, vol. 98(4), pages 355-378, August.
    12. Yang Li & Frank Neffke, 2022. "Relatedness in regional development: in search of the right specification," Papers in Evolutionary Economic Geography (PEEG) 2208, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Apr 2022.
    13. Niccolò Innocenti & Luciana Lazzeretti, 2018. "Relatedness and growth: The impact of creative industries to the wider economy," Papers in Evolutionary Economic Geography (PEEG) 1819, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Apr 2018.
    14. Matthias Firgo & Peter Mayerhofer, 2015. "Wissensintensive Unternehmensdienste, Wissens-Spillovers und regionales Wachstum. Teilprojekt 1: Wissens-Spillovers und regionale Entwicklung – Welche strukturpolitische Ausrichtung optimiert das Wach," WIFO Studies, WIFO, number 58342, April.
    15. Kim, Seung Hwan & Jun, Bogang & Lee, Jeong-Dong, 2021. "Technological relatedness: How do firms diversify their technology?," SocArXiv 47ank, Center for Open Science.
    16. David L. Rigby & Christoph Roesler & Dieter Kogler & Ron Boschma & Pierre-Alexandre Balland, 2019. "Do EU regions benefit from smart specialization?," Papers in Evolutionary Economic Geography (PEEG) 1931, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Nov 2019.
    17. Petralia, Sergio & Balland, Pierre-Alexandre & Morrison, Andrea, 2017. "Climbing the ladder of technological development," Research Policy, Elsevier, vol. 46(5), pages 956-969.
    18. Pier-Paolo Saviotti & Andreas Pyka¤ & Bogang Jun, 2020. "Diversification, structural change, and economic development," Journal of Evolutionary Economics, Springer, vol. 30(5), pages 1301-1335, November.
    19. Adam Whittle & Balázs Lengyel & Dieter F. Kogler, 2020. "Understanding Regional Branching Knowledge Diversification via Inventor Collaboration Networks," Papers in Evolutionary Economic Geography (PEEG) 2006, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Feb 2020.
    20. Dieter F. Kogler & Ronald B. Davies & Changjun Lee & Keungoui Kim, 2023. "Regional knowledge spaces: the interplay of entry-relatedness and entry-potential for technological change and growth," The Journal of Technology Transfer, Springer, vol. 48(2), pages 645-668, April.

    More about this item

    Keywords

    Related diversification; Specialization; Regional policy; Innovation policy; Place-based Policies;
    All these keywords.

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:egu:wpaper:2323. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/deguunl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.