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abstract
The literature on economic geography suffers from a lack of attention to the emergence of new industries. Recent literature on “regional branching” proposes that new industries emerge in regions where preexisting economic activities are technologically related to the emerging industry. This article provides a more grounded basis for the emerging literature on regional branching by confronting the regional branching thesis with the realities of an emerging industry, namely, the fuel cell industry. The analysis is based on patent data and qualitative interviews conducted in a selection of European NUTS2 (nomenclature of territorial units for statistics) regions. The findings can be summarized as follows. First, the analysis reveals that in the case of the emerging fuel cell industry, regional diversification is dominated by firm diversification, which complements previous studies’ findings that entrepreneurial spin-offs dominate regional diversification. Second, the study corroborates the assumption that the process of regional branching relies on knowledge generated by nonindustrial actors such as universities and research institutes. Third, the findings suggest that care should be taken in ascribing the underlying logic of regional branching to the principle of technological relatedness alone. The article shows how some regional diversification processes occur in regions where preexisting economic activities are not technologically related to the emerging industry, for instance, when user industries apply new technologies to their product portfolio. The importance of further investigating and disentangling different dimensions of relatedness and their impact on regional branching is stressed.
Acknowledgments
An earlier version of this article was presented at the DRUID (Danish Research Unit for Industrial Dynamics) Summer Conference on 19–21 June 2012. I am grateful to participants at the DRUID Conference for comments. I am especially grateful to three anonymous Economic Geography reviewers’ feedback and to Henry Yeung’s editorial advice on earlier versions of this article. All errors and omissions remain my own.
Notes
The regional level refers to regions at the subnational level.
European NUTS2 regions are defined as “regions for the application of regional policies” within a threshold of 800,000 to 3 million inhabitants (European Communities Citation). However, there are large differences between NUTS2 regions since some fall outside of the threshold and others do not have any jurisdiction to implement regional policies. Nevertheless, NUTS2 regions are preferred to NUTS1 (“major socio-economic regions” and NUTS3 (“small regions for specific diagnoses”) regions for the spatial mapping of new industries.
Thus, the sample only included patent applications that have primary fuel cell relevant content. Patents with more secondary relevance to fuel cells were not included in this sample. Examples of the latter include material development that is relevant for many other types of electricity converters, including batteries and hybrid cells, tank devices with possible application options in fuel cell vehicles, or principles for handling different heat sources that are not restricted to specific fuel cell development issues.
Note that the quantity rather than the quality of knowledge production was measured.
Large firms can be the dominant applicants in several neighboring regions even if they are located in only one region since the figures are calculated based on where the inventors who have produced the patented knowledge reside. It is, however, assumed that the firm lies in commuting distance of the inventor.
http://www.jmfuelcells.com. This site includes financial reports, press releases, etc.
http://www.sfc.com. This site includes financial reports, press releases, etc.
New Enerday is a spin-off founded on the basis of Webasto subsidiary Enerday’s activities, and Nuvera Fuel Cells was originally a subsidiary of the Italian De Nora Group.
In a way, the sample of actors represents the surface soil in a soil profile (to maintain the geographic terminology). As such, this study says little about the undergrowth of actors that represent the underlying layer. This group can be characterized by higher levels of spin-offs. Nevertheless, almost 60 percent of all nonuniversity patenting in the sample regions is ascribed to the large players that have been examined in this study.