Exploiting the technology-driven structural shift to creative work in regional catching-up: toward an institutional framework

ABSTRACT

The development and application of technologies such as robots and artificial intelligence drive a shift toward non-routinized, creative work. A stylized narrative is that a few regions dominate the making of these technologies and enjoy a virtuous cycle of increasing employment, innovativeness, and in-migration of the creative class. Regions merely applying these technologies may get into a vicious cycle of increasing unemployment, out-migration, and decreasing innovativeness. Following the normative governance turn in regional political economics, this theoretical policy paper pitches a framework of three complementary institutions to direct the technology-driven structural change for regional catching-up. Firstly, a system for innovation and entrepreneurial activity creates jobs by supporting exploitation of complementarities of application, co-development activities, and product innovation within mature and emerging sectors. Secondly, education provides creative and entrepreneurial skills to exploit technological opportunities and upskills workers for emerging sectors. Thirdly, labour market and social security institutions are to allow rationalization in mature sectors, incentivize hiring and learning on the job, as well as encourage innovative ventures, notably in emerging sectors. Challenges of implementation of the framework due to path-dependence, co-evolution, and multi-scalarity as well as applicability in different varieties of capitalism are examined.

KEYWORDS:

• Structural change
• regional development
• technological change
• creative work
• institution
• catching-up

Acknowledgements

We thank two anonymous reviewers, Greg Hearn, Marco Vivarelli, Pier Paolo Saviotti, Smita Srinivas, Erkan Erdil, Iciar Dominguez Lacasa, Beata Woźniak-Jęchorek, Anastasia Constantelou and other participants of the Annual Conference of the European Association for Evolutionary Political Economy 2019 in Warsaw and 2021 in Napoli, and the International Workshop Rethinking Culture and Creativity in the Technological Era 2020 in Florence for their valuable input on earlier versions of this paper and presentations thereof.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

Ben Vermeulen gratefully acknowledges European Union Horizon 2020 Research and Innovation programme, [grant number 731726]. Eleonora Psenner gratefully acknowledges European Union Horizon 2020 European Training Networks programme, [grant number 955907], and financial support from IDM Südtirol for the project A Strategy for the Creative Industries South Tyrol.