# 22.07 Workplace Skills as Regional Capabilities: Relatedness, Complexity and Industrial Diversification of Regions

Duygu Buyukyazici, Leonardo Mazzoni, Massimo Riccaboni & Francesco Serti

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The literature reaches a unanimous agreement that industrial diversification is path-dependent because new industries build on preexisting capabilities of regions that are partly embodied and reflected in the skills of regions’ workforce. This paper explicitly accounts for regional capabilities as workforce skills to build skill relatedness and complexity measures, skill-spaces, for 107 Italian regions for the period 2013-2019. Data-driven techniques we use reveal that skill-spaces form two highly polarised clusters into social-cognitive and technical-physical skills. We show that industries have a higher (lower) probability of developing comparative advantage if their required skill set is (not) similar to those available in the region regardless of the skill type. We find evidence that similarity to technical-physical skills and higher complexity in social cognitive skills yields the highest probabilities of regional competitive advantage.

# 22.06 Regional diversification in Brazil: the role of relatedness and complexity

Mariane Santos Françoso, Ron Boschma & Nicholas Vonortas

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The paper contributes to the growing literature on the relationship between relatedness, complexity and regional diversification. It explores regional diversification in an emerging economy, focusing on diversification opportunities of regions with distinct levels of local capabilities. We investigate the importance of relatedness and economic complexity for sectoral and technological diversification in all regions of Brazil during the period 2006-2019. Regions tend to diversify in sectors/technologies requiring similar capabilities to those already available locally. In general, the higher the sector/technology complexity, the lower the probability of diversification. However, in high-complex regions, complexity reverses into a positive force for diversification. Our analysis shows catching-up and diversification prospects vary widely across different types of regions in Brazil.effect is supported by cognitive proximity as the share of EU-born foreign population is driving this result. Moreover, our analysis suggests that the effect of cultural diversity on innovative entrepreneurship is not due to human capital availability or moderated by entrepreneur’s absorptive capacity but rather stems from the diversity in cultural background itself. 

# 22.05 Cultural diversity and innovation-oriented entrepreneurship

Paula Prenzel, Niels Bosma, Veronique Schutjens & Erik Stam 

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A growing empirical literature has established a positive relationship between cultural diversity and entrepreneurship rates, often attributing this effect to innovative benefits of diversity. However, not all entrepreneurship is inherently innovative, raising the question of whether cultural diversity may increase the relative prevalence of entrepreneurs pursuing innovative instead of more replicative strategies. This study investigates the relationship between regional cultural diversity and the innovation-orientation of early-stage entrepreneurs and considers moderating factors by decomposing shares of foreign-born population by origin within and outside of the EU and by education level. Combining survey data from the Global Entrepreneurship Monitor with various measures of cultural diversity, we carry out a multilevel analysis for 166 European regions. The results suggest that entrepreneurs in more culturally diverse regions are significantly more likely to exhibit innovation-orientation. We find some evidence that this effect is supported by cognitive proximity as the share of EU-born foreign population is driving this result. Moreover, our analysis suggests that the effect of cultural diversity on innovative entrepreneurship is not due to human capital availability or moderated by entrepreneur’s absorptive capacity but rather stems from the diversity in cultural background itself. 

# 22.04 Uncooperative Society, Uncooperative Politics or Both? Trust, Polarisation, Populism and COVID-19 Deaths across European regions

Nicholas Charron, Victor Lapuente & Andrés Rodríguez-Pose 

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Why have some territories performed better than others in the fight against COVID-19? This paper uses a novel dataset on excess mortality, trust and political polarization for 165 European regions to explore the role of social and political divisions in the remarkable regional differences in excess mortality during the first wave of the COVID-19 pandemic. First, we investigate whether regions characterized by a low social and political trust witnessed a higher excess mortality. Second, we argue that it is not only levels, but also polarisation in trust among citizens – in particular, between government supporters and non-supporters – what matters for understanding why people in some regions have adopted more pro-healthy behaviour.  Third, we explore the partisan make-up of regional parliaments and the relationship between political division – or what we refer to as ‘uncooperative politics’. We hypothesize that the ideological positioning – in particular those that lean more populist – and ideological polarization among political parties is also linked to higher mortality. Accounting for a host of potential confounders, we find robust support that regions with lower levels of both social and political trust are associated with higher excess mortality, along with citizen polarization in institutional trust in some models.  On the ideological make-up regional parliaments, we find that, ceteris paribus, those that lean more ‘tan’ on the ‘gal-tan’ spectrum yielded higher excess mortality. Moreover, although we find limited evidence of elite polarization driving excess deaths on the left-right or gal-tan spectrums, partisan differences on the attitudes towards the EU demonstrated significantly higher deaths, which we argue proxies for (anti)populism.  Overall, we find that both lower citizen-level trust and populist elite-level ideological characteristics of regional parliaments are associated with higher excess mortality in European regions during the first wave of the pandemic. 

# 22.03 Improving government quality in the regions of the EU and its system-wide benefits for Cohesion policy

Javier Barbero, Martin Christensen, Andrea Contea, Patrizio Lecca, Andrés Rodríguez-Pose & Simone Salotti 

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We quantify the general equilibrium effects on economic growth of improving the quality of institutions at the regional level in the context of the implementation of the European Cohesion Policy for the European Union and the UK. The direct impact of changes in the quality of government is integrated in a general equilibrium model to analyse the system-wide economic effects resulting from additional endogenous mechanisms and feedback effects. The results reveal a significant direct effect as well as considerable system-wide benefits from improved government quality on economic growth. A small 5% increase in government quality across European Union regions increases the impact of Cohesion investment by up to 7% in the short run and 3% in the long run. The exact magnitude of the gains depends on various local factors, including the initial endowments of public capital, the level of government quality, and the degree of persistence over time. inked to higher mortality. Accounting for a host of potential confounders, we find robust support that regions with lower levels of both social and political trust are associated with higher excess mortality, along with citizen polarization in institutional trust in some models.  On the ideological make-up regional parliaments, we find that, ceteris paribus, those that lean more ‘tan’ on the ‘gal-tan’ spectrum yielded higher excess mortality. Moreover, although we find limited evidence of elite polarization driving excess deaths on the left-right or gal-tan spectrums, partisan differences on the attitudes towards the EU demonstrated significantly higher deaths, which we argue proxies for (anti)populism.  Overall, we find that both lower citizen-level trust and populist elite-level ideological characteristics of regional parliaments are associated with higher excess mortality in European regions during the first wave of the pandemic. 

# 22.02 The Dark Side of the Geography of Innovation: Relatedness, Complexity, and Regional Inequality in Europe

Flavio L. Pinheiro, Pierre-Alexandre Balland, Ron Boschma & Dominik Hartmann

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As regions evolve, their economies become more complex, and they tend to diversify into related activities. Although there is a bright side to this diversification process in terms of economic development, there may also be a dark side to it, as it possibly contributes to regional inequalities. The paper uses data on industries and patents to analyze the diversification patterns of 283 regions in 32 European countries over the past 15 years. We find that only the most economically advanced regions have the opportunity to diversify into highly complex activities. These regions tend to focus on related high-complex activities, while lagging regions focus on related low-complex activities, creating a spatial inequality feedback loop. This pattern creates a wicked problem for innovation policy: the strategy needed to improve the innovativeness of the European knowledge system might disproportionately benefit regions that are already developed and foster disparities.enrolling in specific locations.

# 22.01 The spatial patterns of student mobility before, during, and after the Bologna process in Germany

Philipp Gareis & Tom Broekel

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The paper contributes to the literature investigating students’ spatial mobility. By focusing on German higher education students with a novel dataset providing data from 1999 to 2015, we evaluate the impact of the change from a one-tiered to the two-tiered study structure of bachelor and master degrees (Bologna reform) on their inter-regional mobility and its underlying drivers. Our analysis confirms the system change to slightly alter inter-regional mobility of students. However, differences distinguish between different fields of study and universities und universities of applied sciences and indicate that the German higher education system is fairly resilient in its allocation of students. A Bologna-Drain of students moving from rural to urban regions to study master programs, can partially be confirmed for students of business studies. Our results reject the idea of (low) tuition fees discouraging students from enrolling in specific locations.

# 21.40 Mission-oriented innovation policy: The case of the Swedish ‘Vision Zero’ approach to traffic safety

Jannes Craens, Koen Frenken & Toon Meelen

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There is an increasing consensus among policy makers and academics that Mission-oriented Innovation Policy is needed to tackle the grand societal challenges of our time. However, there is little experience in actually carrying out this new type of policy. In this light, we investigate Sweden’s ambitious traffic safety policy known as ‘Vision Zero’. We consider this policy as a mission-oriented innovation policy towards a societal challenge, as it started from the articulation of a bold, societal goal (zero traffic deaths), fostered multiple types of innovations (technological infrastructural, regulatory), and involved a variety of actors (public, private and professional organizations). We explain what the Vision Zero policy entails, how stakeholders dealt with ‘transformational failures’, and what made the policy a success. We end with lessons for the development of new mission-oriented innovation policies to address societal challenges.

# 21.39 The importance of global value chains and regional capabilities for the economic complexity of EU-regions

F. Colozza, R. Boschma, A. Morrison & C. Pietrobelli

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At the intersection of regional and innovation studies, trademark research is producing stylized facts, methodological lessons and policy insights underlining the importance of softer intangible assets for regional resilience and growth. Despite all the recent attention, there are still several opportunities that the present agenda-framing piece tries to canvas, identifying at least two directions for further research: the geography of innovation/entrepreneurship and regional specialization/diversification. Not only do these emerge from a dedicated special issue in Regional Studies (to which this paper also serves as an Editorial), they also unfold in emerging research and policy trajectories.

# 21.38 Regions and trademarks: Research opportunities and policy insights from leveraging trademarks in regional innovation studies

Carolina Castaldi & Sandro Mendonça 

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At the intersection of regional and innovation studies, trademark research is producing stylized facts, methodological lessons and policy insights underlining the importance of softer intangible assets for regional resilience and growth. Despite all the recent attention, there are still several opportunities that the present agenda-framing piece tries to canvas, identifying at least two directions for further research: the geography of innovation/entrepreneurship and regional specialization/diversification. Not only do these emerge from a dedicated special issue in Regional Studies (to which this paper also serves as an Editorial), they also unfold in emerging research and policy trajectories.