# 18.38 Specialization, diversification and environmental technology life-cycle

Nicoló Barbieri and François Perruchas and Davide Consoli

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Abstract: The paper analyses whether and to what extent regional related and unrelated variety matter for the development of green technology, and whether their influence differs over the technology life-cycle. Using patent and socio-economic data on a thirty- year (1980-2009) panel of US States, our study finds that unrelated variety is a positive predictor of green innovative activities. When unpacked over the life cycle, we find that unrelated variety is the main driver of green technology development in early stages while related variety becomes more prominent as the technology enters into maturity.

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# 18.37 Disentangling link formation and dissolution in spatial networks: An application of a two-mode STERGM to a project-based R&D network in the German Biotechnology industry

Tom Broekel & Marcel Bednarz

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Abstract: The analysis of spatial networks’ evolution has predominantly concentrated on the formation process of links. However, the evolution of networks is similarly shaped by the dissolution of links, which has thus far received considerably less attention. The paper presents separable temporal exponential random graph models (STERGMs) as a promising method in this context, which allows for the disentangling of both processes. Moreover, the applicability of the method to two-mode network data is demonstrated. We illustrate the use of these models for the R&D collaboration network of the German biotechnology industry as well as for testing for the relevance of different forms of proximities for its evolution. The results reveal proximities varying in their relative importance for link formation and link dissolution.

# 18.36 Related variety, unrelated variety and the novelty content of firm innovation in urban and non-urban locations

Marte C.W. Solheim and Ron Boschma and Sverre Herstad

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Abstract: In this paper, we investigate whether the composition of experience-based knowledge accumulated by firms in urban and rural locations is reflected in the novelty content of their innovations. Looking at the manufacturing industry, and using Norwegian Linked Employer- Employee register data (LEED) merged with Community Innovation Survey (CIS) data, we find that unrelated experience variety within firms increases the probability of radical innovation, independently of firms’ location, whereas related variety increases the probability of incremental innovation in large-city regions. These results demonstrate that innovation capacity cannot be understood from the single perspective of R&D efforts and strategy as it also depends on experiences accumulated in ‘entire organizations’ and the locations in which accumulation occurs. Moreover, they suggest that for manufacturing firms, urban locations are not hot spot for radical change. Instead, they support incremental innovative activities by facilitating effective sharing of knowledge between related sectors.

# 18.35 Migration and invention in the age of mass migration

Andrea Morrison and Sergio Petralia and Dario Diodato

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Abstract: More than 30 million people migrated to the US between the 1850s and 1920s. In the order of thousands became inventors and patentees. Drawing on an original dataset of immigrant inventors to the US, we assess the city-level impact of immigrants patenting and their potential crowding out effects on US native inventors. Our study contributes to the different strands of literature in economics, innovation studies and economic geography on the role of immigrants as carriers of knowledge. Our results show that immigrants’ patenting is positively associated with total patenting. We find also that immigrant inventors crowd-in US inventors. The growth in US inventors’ productivity can be explained also in terms of knowledge spill-overs generate by immigrants. Our findings are robust to several checks and to the implementation of an instrumental variable strategy.

# 18.34 What kind of related variety for long-term regional growth?

Kadri Kuusk & Mikhail Martynovich

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Abstract: We investigate the evolution of relatedness linkages between Swedish industries during five sub-periods between 1991 and 2010. Distinguishing between the stable ties (present in all sub- periods) and non-stable ties (emerging, disappearing, etc), we demonstrate that the relatedness linkages change considerably over time. Furthermore, we show that the changes in the relatedness matrix matter for the impact of related variety on regional employment growth. We argue, therefore, that the relatedness linkages have a ‘best before date’ and that the choice of what relatedness indicator to apply and how deserves more consideration than it is usually given.

# 18.33 An Evolutionary Perspective on the British Banking Crisis

Neill Marshall & Stuart Dawley & Andy Pike & Jane Pollard & Mike Coombes

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Abstract: Developing an evolutionary perspective towards the changing anatomy of the banking sector reveals the enduring tensions and contradictions between spatial centralisation and the possibilities for decentralisation before, during and after the British banking crisis. The shift from banking boom to crisis in 2007 is conceptualised as a significant and on-going moment in the long-term evolution of the historical institutional-spatial dominance of London over other city-regions in Britain. The analysis demonstrates the importance of the institutional and geographical legacies of the British national political economy and variegation of capitalism established in the later nineteenth and early twentieth centuries in shaping contemporary geographical outcomes. Regulatory changes combined with financial innovation in the latter years of the twentieth century to create an opportunity for English regional and Scottish banks excluded from previous institutional-spatial centralisation to expand excessively and consequently several failed in the banking crisis. The paper considers the future trajectory of institutional-spatial centralisation in the banking sector amidst the continued spatial restructuring of the banking crisis, involving a re-drawing of organisational boundaries, overlapping institutional and technological changes and unprecedented uncertainty about the impact of Brexit on Britain’s wider political and economic landscape.

# 18.32 Ageing labour: How does demographic change affect regional human capital?

Paula Prenzel & Simona Iammarino

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Abstract: Human capital investments are frequently suggested as policy measure to cope with smaller and older labour forces caused by demographic change across Europe. However, the availability and composition of human capital is fundamentally intertwined with demographic structures, especially at a regional level. This paper analyses how ageing is related to the regional composition of human capital for 332 German regions between 1996 and 2010. The findings show that labour force ageing is associated with lower educational attainment, and that older labour forces have higher shares of traditional vocational degrees. On a national level, education expansion still sufficiently compensates for the effects of population ageing, but regional human capital composition shows distinct trends.

# 18.31 Unemployment resistance across EU regions: the role of technological and human capital

Riccardo Cappelli & Fabio Montobbio & Andrea Morrison

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Abstract: We investigate the impact of the 2008 crisis to study the relationship between economic and technological resilience in 248 European Union regions. For economic resilience we measure the difference between the level of unemployment rate before crisis and the level of unemployment rate at its peak after the crisis – i.e., the unemployment resistance. Using European Patent Office patents, we look at all technological crises in each region since 1978 and build a variable of technological resilience measuring the historical ability of a region to maintain its level of knowledge creation in face of adverse shocks – i.e., the technological resistance. We find that technological resistance is a good predictor of economic resistance. In particular, our results show that (1) important interaction effects exist between technological resistance and human capital, (2) technological resistance and the level of human capital are less effective in protecting female and elder adult workers in an economic crisis and (3) important country level effects are present.

# 18.30 The Principle of Relatedness

César A. Hidalgo & Pierre-Alexandre Balland & Ron Boschma & Mercedes Delgado & Maryann Feldman & Koen Frenken & Edward Glaeser & Canfei He & Dieter F. Kogler & Andrea Morrison & Frank Neffke & David Rigby & Scott Stern & Siqi Zheng & Shengjun Zhu

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Abstract: The idea that skills, technology, and knowledge, are spatially concentrated, has a long academic tradition. Yet, only recently this hypothesis has been empirically formalized and corroborated at multiple spatial scales, for different economic activities, and for a diversity of institutional regimes. The new synthesis is an empirical principle describing the probability that a region enters – or exits – an economic activity as a function of the number of related activities present in that location. In this paper we summarize some of the recent empirical evidence that has generalized the principle of relatedness to a fact describing the entry and exit of products, industries, occupations, and technologies, at the national, regional, and metropolitan scales. We conclude by describing some of the policy implications and future avenues of research implied by this robust empirical principle

# 18.29 Complex Economic Activities Concentrate in Large Cities

Pierre-Alexandre Balland & Cristian Jara-Figueroa & Sergio Petralia & Mathieu Steijn & David Rigby & César A. Hidalgo

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Abstract: Why do some economic activities agglomerate more than others? And, why does the agglomeration of some economic activities continue to increase despite recent developments in communication and transportation technologies? In this paper, we present evidence that complex economic activities concentrate more in large cities. We find this to be true for technologies, scientific publications, industries, and occupations. Using historical patent data, we show that the urban concentration of complex economic activities has been continuously increasing since 1850. These findings suggest that the increasing urban concentration of jobs and innovation might be a consequence of the growing complexity of the economy.