Papers in Evolutionary Economic Geography

June 9, 2015

# 15.19 Cross-specialization: A New Perspective on Industry Policy

Filed under: 2015 — Tags: , , , , — mattehartog @ 9:56 am

Matthijs J. Janssen

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In this paper we discuss how an economies’ established stronghold industries can form a basis for sustaining competiveness. As changing market circumstances demand strongholds to stay adaptive, their knowledge bases need to be enriched with knowledge that is uncommon to the industry itself. Inspired by insights from evolutionary economic geography, we argue why rather than (only) supporting related variety, policy makers should ‘cross-specialize’ by creating linkages between strong but unrelated industries. Experimentation based on bridging rich knowledge bases provides important opportunities for breakthrough innovation and, ultimately, economic diversification. Policy makers can facilitate uncommon interactions by creating various kinds of platform-like interfaces. One way to determine what technologies and themes are suitable in this regard is by taking a close look at cross-over industries. As these cross-over industries consist of parties able to communicate with both of the unrelated strongholds, they are highly relevant for policy interventions aimed at closing structural holes in the industry space. Looking at the case of the Dutch Topsectors, we describe how cross-over industries can be identified. We use skill-relatedness and employment data to construct the Dutch industry space, and apply network analytics for calculating cross-over centrality measures. We conclude by discussing research and policy implications.

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