Retheorizing industrial–institutional coevolution: a multidimensional perspective

Figures & data

Figure 1. Multidimensional framework of industrial–institutional coevolution.

Source: Author’s elaboration.

Table 1. Typology of coevolution and selected forms of path development.

Level	Form of change		Resulting form of path development
	Incremental	Radical
Industrial	Gradual adaptation to slightly changing market conditions and technologies Further growth of existing clusters	No radical breaks	Path extension
Institutional	Reproduction and maintenance of institutions and careful adaptation of institutions to changing contexts	No radical breaks
Industrial	Gradual move towards various forms of upgrading among firms or clusters Acquisition of new technologies	Sudden upgrading after external shocks, through radical innovations, or through new business formation	Path upgrading
Institutional	Gradual acceptance of problems and upgrading needs Gradual shift away from risk aversion and towards a longer term planning horizon Gradual adaptation of institutions to upgrading promoted by policies and laws	Breakdown of existing institutions Creation of new institutions due to external shocks or through the implementation of new policies and laws
Industrial	Gradual adaptation to changing market conditions and technologies Gradual move towards new knowledge	Establishment of products or processes through innovation or market entry through new business formation	Path branching or diversification
Institutional	Possibly gradual convergence between institutions in related or unrelated industries Gradual shift away from risk aversion	Introduction of institutions in unrelated industries by institutional entrepreneurs
Industrial	Emergence of a cluster	Emergence of new firms through new business formation Establishment of new scientific, educational, or support infrastructure	Path creation
Institutional	Gradual crystallization of institutions Gradual shift away from risk aversion Gradual emergence of a competitive spirit and entrepreneurial attitudes	Introduction of new routines by new firms Defection from and displacement of established institutions by institutional entrepreneurs Creation of new institutions due to external shocks or through the implementation of new policies and laws
Industrial	Gradual narrowing of the industrial scope through re-specialization Lock-in due to overspecialization Gradual cluster decline through a loss of skilled labour or accumulated staff cutbacks	Sudden external changes in the demand of large multinational buyers Sudden cluster decline through sudden staff cutbacks or mergers	Path contraction
Institutional	Strengthening of damaging institutions and lock-in Gradual emergence of an inward-looking vision	Breakdown of existing institutions Loss of trust relationships
Industrial	Gradual foreign direct investment (FDI) inflows changing the structure of the industry Gradual cutbacks or loss of skilled labour	Sudden external changes, for example, transformation of state-owned companies Sudden cutbacks or loss of skilled labour	Path downgrading
Institutional	Gradual dissolution or substitution of existing institutions Adoption of myopic business philosophies	Breakdown of existing institutions Break-up of existing networks and related or underlying institutions Defection from established institutions

Sources: Author’s elaboration drawing on Benner (2020c), Bergman (2008); Blažek et al. (2020), Gong and Hassink (2019), Grillitsch et al. (2018), Hall and Thelen (2009), Isaksen (2015), Isaksen et al. (2018, 2019), Jolly et al. (2020); Lawrence and Suddaby (2006), Martin and Sunley (2006); Menzel and Fornahl (2010), Streeck and Thelen (2005), Tödtling and Trippl (2013), and Trippl et al. (2018).

Benner, M. (2020c). The spatial evolution–institution link and its challenges for regional policy. European Planning Studies, 28(12), 2428–2446. https://doi.org/10.1080/09654313.2019.1698520

 Web of Science ®Google Scholar

Bergman, E. M. (2008). Cluster life cycles: An emerging synthesis. In C. Karlsson (Ed.), Handbook of research on cluster theory (pp. 114–132). Elgar.

 Google Scholar

Blažek, J., Květoň, V., Baumgartinger-Seiringer, S., & Trippl, M. (2020). The dark side of regional industrial path development: Towards a typology of trajectories of decline. European Planning Studies, 28(8), 1455–1473. https://doi.org/10.1080/09654313.2019.1685466

 Web of Science ®Google Scholar

Gong, H., & Hassink, R. (2019). Co-evolution in contemporary economic geography: Towards a theoretical framework. Regional Studies, 53(9), 1344–1355. https://doi.org/10.1080/00343404.2018.1494824

 Web of Science ®Google Scholar

Grillitsch, M., Asheim, B., & Trippl, M. (2018). Unrelated knowledge combinations: The unexplored potential for regional industrial path development. Cambridge Journal of Regions, Economy and Society, 11(2), 257–274. https://doi.org/10.1093/cjres/rsy012

 Web of Science ®Google Scholar

Hall, P. A., & Thelen, K. (2009). Institutional change in varieties of capitalism. Socio-Economic Review, 7(1), 7–34. https://doi.org/10.1093/ser/mwn020

 Web of Science ®Google Scholar

Isaksen, A. (2015). Industrial development in thin regions: Trapped in path extension? Journal of Economic Geography, 15(3), 585–600. https://doi.org/10.1093/jeg/lbu026

 Web of Science ®Google Scholar

Isaksen, A., Tödtling, F., & Trippl, M. (2018). Innovation policies for regional structural change: Combining actor-based and system-based strategies. In A. Isaksen, R. Martin, & M. Trippl (Eds.), New avenues for regional innovation systems: Theoretical advances, empirical cases and policy lessons (pp. 221–238). Springer.

 Google Scholar

Hassink, R., Isaksen, A., & Trippl, M. (2019). Towards a comprehensive understanding of new regional industrial path development. Regional Studies, 53(11), 1636–1645. https://doi.org/10.1080/00343404.2019.1566704

 Web of Science ®Google Scholar

Jolly, S., Grillitsch, M., & Hansen, T. (2020). Agency and actors in regional industrial path development. A framework and longitudinal analysis. Geoforum, 111, 176–188. https://doi.org/10.1016/j.geoforum.2020.02.013

 Web of Science ®Google Scholar

Lawrence, T. B., & Suddaby, R. (2006). Institutions and institutional work. In S. R. Clegg, C. Hardy, T. B. Lawrence, & W. R. Nord (Eds.), SAGE handbook of organization studies (2nd ed., pp. 215–254). Sage.

 Google Scholar

Martin, R., & Sunley, P. (2006). Path dependence and regional economic evolution. Journal of Economic Geography, 6(4), 395–437. https://doi.org/10.1093/jeg/lbl012

 Web of Science ®Google Scholar

Menzel, M. P., & Fornahl, D. (2010). Cluster life cycles – Dimensions and rationales of cluster evolution. Industrial and Corporate Change, 19(1), 205–238. https://doi.org/10.1093/icc/dtp036

 Web of Science ®Google Scholar

Streeck, W., & Thelen, K. (2005). Introduction: Institutional change in advanced political economies. In W. Streeck & K. Thelen (Eds.), Beyond continuity: Institutional change in advanced political economies (pp. 1–39). Oxford University Press.

 Google Scholar

Tödtling, F., & Trippl, M. (2013). Transformation of regional innovation systems: From old legacies to new development paths. In P. Cooke (Ed.), Re-framing regional development: Evolution, innovation, and transition (pp. 297–317). Routledge.

 Google Scholar

Trippl, M., Grillitsch, M., & Isaksen, A. (2018). Exogenous sources of regional industrial change: Attraction and absorption of non-local knowledge for new path development. Progress in Human Geography, 42(5), 687–705. https://doi.org/10.1177/0309132517700982

 Web of Science ®Google Scholar