Regional industrial policy in times of big disruption: building dynamic capabilities in regions

ABSTRACT

This paper contributes to the literature by proposing that regions have to develop dynamic capabilities in order to successfully adapt to big disruption such as Industry 4.0. It explores both the strategic management and the regional studies literatures to explore why, how and what dynamic capabilities might be deployed at a regional level. The theoretical insights are illustrated in the case of the Emilia-Romagna region in Italy. Dynamic capabilities appear both to mediate between structure and agency in regional path development and to promote value creation and capture. Their consideration in Research and Innovation Strategies for Smart Specialisation (RIS3) might favour policy implementation besides policy definition.

KEYWORDS:

• Industry 4.0
• regional industrial policy
• dynamic capabilities

JEL:

• L23
• L52
• R11

ACKNOWLEDGEMENT

The authors thank the anonymous reviewers who provided helpful and constructive comments.

DISCLOSURE STATEMENT

No potential conflict of interest was reported by the authors.

Notes

1. These definitions of value creation and value capture are from Pitelis (2009).

2. Capability and competence are generally taken as equivalent in the literature, although a competence (the ‘ability to do something well’) should be the result of a capability (the ‘ability to do something’), as indicated in the Cambridge Dictionary.

3. Second edition of the seminal 1990 book.

4. Thereby generating lock-ins, which have been extensively analysed since Grabher (1993).