Grasping transformative regional development – Exploring intersections between industrial paths and sustainability transitions

Abstract

A comprehensive perspective of transformative regional development is pertinent considering complex present and future challenges such as the climate crisis. Particularly in face of ecological boundaries which manifest themselves in limited resources and result in social disputes, a realistic grip on transformative regional development is of utmost importance. To advance this field, we propose a research agenda that draws on the debates on regional industrial path development and sustainability transitions. We define two core dimensions: interrelations between several industrial paths and interrelations between regions and between spatial scales. We argue that both dimensions need to be considered against ecological boundaries and as embedded in social dynamics. We combine specific questions on these interrelations into a research agenda.

Keywords

Industrial path development socio-technical transitions transformative regional development inter-path relations multiscalarity ecological boundaries social dynamics

Introduction

Given the ever more pressing nature of complex, global challenges such as the climate crisis or the ongoing pandemic, leading academics have made calls to rethink and update approaches to regional development (Hassink et al., 2019; Martin, 2021b; Schulz and Bailey, 2014). Continuous rising inequalities are commonly identified as key issues for economic geography that have remained somewhat neglected by recent mainstream debates (Dorling, 2018; Martin, 2021a; Phelps et al., 2018) - less so the ongoing depletion of resources which provide the foundation of much of our economic activity, and the associated socio-spatial impact. We propose to re-integrate such a perspective of ecological boundaries and social dynamics into concepts of regional development, a perspective that we describe as transformative regional development. By transformative regional development, we mean regional development efforts which emphasise the content and direction of change through innovation by putting the addressing of grand challenges such as the climate and ecological crisis at their core, thereby adopting an explicitly normative position (Madsen, 2022; Uyarra et al., 2019). Such development efforts foreground (whole) socio-technical system change, respect ecological boundaries and recognise transregional effects (Loorbach et al., 2020; Schot and Steinmueller, 2018).

To advance this research frontier, we suggest combining insights from the debates on regional industrial (path) development and sustainability transitions. Until recently, integrated perspectives on regional industrial path development and wider societal change (as in focus in the debate on sustainability transitions) were scarce. While recent contributions (Fastenrath and Braun, 2018; Hansmeier et al., 2022; Njøs et al., 2020; Sjøtun and Njøs, 2019; Tödtling and Trippl, 2018) increasingly point to the intersections, we advance this integrative work by suggesting a systematic agenda for tackling core, interdependent aspects of both fields: regional industrial paths cannot be understood in isolation. Rather, first, they interact with each other and impact the directionality of regional development and second, they are embedded in space. There are important interrelations both between different regions and between different spatial scales. On both dimensions, we see contributions in the recent years – what commonly remains side-lined or ignored, however, is the fundamental role of the very resources that our economies and much of our livelihoods rely on. Transformative regional development must, therefore, be negotiated against ecological boundaries and recognise its embedding in society and associated dynamics.

We take the liberty to assume most readers will be familiar with both debates and refrain from introducing them in detail. Instead, the section ‘Starting points: Where regional industrial path development and transitions intersect’ highlights important starting points which we draw on to derive an integrated perspective on transformative regional development in the section ‘Core dimensions of interrelation in transformative regional development’. The section ‘Grasping transformative regional development – A research agenda’ specifies respective research questions for better grasping transformative regional development in future work. The section ‘Towards a realistic picture of transformative regional development’ concludes.

Starting points: Where regional industrial path development and transitions intersect

The research agenda draws upon two complementary perspectives on transformative regional development, regional industrial paths and socio-technical transitions. First, the industrial paths perspective is rooted in economic geography where it is widely applied to analyse and explain the development and specialisation of industries (i.e. their emergence, growth and decline) and corresponding innovation activities. The two main streams within the wider field of economic geography explicitly acknowledge evolutionary industrial dynamics through a lens of technology development and technological relatedness on the one hand (Frenken et al., 2007; Frenken and Boschma, 2007), and through a perspective focused on path creation through a combination of ‘mindful deviation’ (Simmie, 2012) and industry-specific system building (Isaksen, 2001; Isaksen et al., 2019) on the other. Both perspectives stress the importance of the regional context, whereby the latter puts more focus on technological change and industrial development as outcomes of human agency – contingent upon actors’ perceptions and structured by institutions. Second, the transitions concept contributes a wider perspective on innovation through the lens of systemic socio-technical change but is less nuanced regarding the underlying industrial dynamics. Rather, the evolution of industries is primarily considered vis-à-vis the industries’ roles in contributing to the fulfillment of societal functions (Geels, 2004; Truffer, 2008). The concept also allows for a wide range of influential factors and conceptualisations beyond techno-economic development (Markard et al., 2012).

Both perspectives conceptualize innovation as a socially embedded process that occurs in co-evolution between economic organisations and institutions (Geels, 2014; Gong and Hassink, 2019), or more broadly defined, between technologies, industrial development and associated structures (Nelson, 1994). In the literature on paths, agency tends to be mainly considered around the alteration of techno-economic paradigms. The transitions debate, however, puts agency in a broader context and considers a larger variety of actors, also including those from the civil society such as grassroots movements, NGOs or consumers (Fastenrath and Braun, 2018).

Early work on socio-technical transitions commonly foregrounded the involved system change dynamics (i.e. how change comes about) over normative questions over the values and benefits of the systems themselves (Helne and Hirvilammi, 2015; Schlaile et al., 2017). The transitions perspective does, however, facilitate the reflection about issues such as the directionality of change, as well as ‘failure’ and the wide-ranging intended and unintended consequences of industrial activities, be it in economic, social or environmental terms (Newell and Mulvaney, 2013; Sovacool et al., 2019; Turnheim and Sovacool, 2020). These are issues that have been, to some extent, taken up more recently by scholars in economic geography too (Afewerki and Karlsen, 2021; Blažek et al., 2020; Martin, 2021b). One concept which has gained great popularity, for example, is that of ‘mission-oriented innovation’ (Mazzucato, 2018). Recent contributions suggest an application to regional innovation policy via ‘challenge-oriented regional innovation systems’ (Isaksen et al., 2022; Tödtling et al., 2022). Given that the physical environment receives little attention in such adaptations, they may inadvertently, despite best intentions facilitate ‘business as usual’ instead of more fundamental change.

Both outlined research strands consider regional industrial development as context dependent. While the paths literature seeks explicit links to regional contexts, socio-technical transitions consider industry development against a wider societal context. Nevertheless, transition dynamics are highly place-dependent, and their specific trajectories differ between regions (Coenen et al., 2021). This is mirrored in the ongoing debate on the spatiality of socio-technical transitions (Coenen et al., 2012; Kanger, 2022). From a geographical perspective, regional transitions are crucially shaped by place-dependent local and regional dynamics, but also combine to form a national and in the end global transition process (Bauer and Fünfschilling, 2019). This, however, is not just a simple accumulation of regional transitions but they are much more complex, inter-dependent processes (Madsen, 2022) that may reinforce or impede each other through competition, collaboration, and learning (Loorbach et al., 2020).

In the last few years, numerous contributions have been made with the aim of integrating both debates. We will turn to some of their key themes in the following:

First, several contributions share a strong argument in favour of systemic perspectives. To better tackle the present global challenges they argue that a focus on actors, actor networks and institutions as part of a systemic perspective allows for greater sensitivity towards aspects such as multiscalarity, the direction of transformation, barriers to new path development, co-evolutionary processes and the need for policy coordination (i.e. Capasso et al., 2019; Tödtling and Trippl, 2018; Tödtling et al., 2022). These key arguments inform the first dimension of our research agenda, that of the industry–industry interdependencies.

Second, many contributions point to the pertinence of a relational perspective of territories and spatial scales. They make explicit the spatial reach of agency across scales from the local to the global (Boschma et al., 2017) or point to the important role of decisions that were made elsewhere (be it in a different region or on a different scale) for apparently place-specific transitions (e.g. Binz et al., 2020). Such arguments on the relationship between industry and space inform the second dimension of our research agenda.

Third, another common argument is on the consideration of ecological boundaries. This mirrors ongoing debates around the integration of environmental and evolutionary economic geography (Foxon, 2018; He et al., 2022; Patchell and Hayter, 2013). Based on a set of biophysical boundaries at the planetary scale (Rockström et al., 2009), and complemented by social objectives by Raworth (2012), the concept is commonly represented by a doughnut shape (Raworth, 2017), thereby illustrating the factual limitations of development. It has been extended and applied to different scales to assess nations’ (Fanning et al., 2022), regions’ (Dearing et al., 2014), or cities’ (Hoornweg et al., 2016) pathways towards sustainable development and therefore seems particularly suited as a concept against which to assess transformative regional development efforts.

Fourth and finally, the consideration of a broad actor base and the socio-political dynamics involved in transformative regional development has increasingly been called for in recent years. These contributions point to the importance of key factors that affect sustainability transitions, path development or industrial evolution and induce institutional change (i.e. Fastenrath and Braun, 2018; Grillitsch and Sotarauta, 2019; MacKinnon et al., 2019). ‘Action[s] or intervention[s] to produce a particular effect’ (Sotarauta and Suvinen, 2018: 90) of the involved actors, the interaction among them, as well as the ensuing social distributional issues (Dearing et al., 2014) conjointly form the social dynamics that deserve particular attention in both dimensions outlined above.

To conclude, the respective contributions share strong arguments in favour of explicitly systemic perspectives, and a consideration of spatial implications beyond single (container-like) territories. Ecological boundaries and social dynamics fundamentally constrain and condition transformative regional development which must be considered in future research and practice.

Core dimensions of interrelation in transformative regional development

Bringing forth key messages from recent contributions on intersections between regional industrial path development and sustainability transitions, we lay out what we see as the two core dimensions of interdependence between the phenomena in the following, that between several industrial paths (Interrelations between several industrial paths) and that between regions and between spatial scales (Interrelations between regions and between spatial scales). In both dimensions, ecological boundaries and social dynamics deserve particular attention. We then address interdependencies between both dimensions (Summary: The interrelation between industrial path development and transitions).

Interrelations between several industrial paths

As we have shown above, leading authors have identified the relevance of systemic approaches in the light of global challenges. Regarding regional industrial path development, we, therefore, argue that single industrial paths cannot be considered in isolation. Instead, they are continuously subject to reciprocal dynamics within and across regions (Martin and Sunley, 2006). Transformative regional development is unlikely to be based on single technological solutions and industries. Rather, innovative actors may explore synergies by recombining several existing and/or emerging technologies to create the desired outcomes (Stihl, 2022). Respective paths are hence loosely coupled to each other and co-evolve. Recent contributions on path interrelations highlight the range of potential interactions, including mutually supportive, but also competitive or simply neutral relationships between technologies and industries (Frangenheim et al., 2020). Such relations between different paths, however, are not solely based on technologies but involve a broader spectrum of influential factors (Tanner, 2014) such as the reliance on the same resources, markets or even place-specific institutions, culture or discourses (Breul et al., 2021; Carvalho and Vale, 2018; Eriksen and Isaksen, 2021; Frangenheim, 2022).

Whilst the relationship between several regional industrial paths has been studied with respect to the aim of regional economic growth, the combined effect of multiple paths in the context of transformative regional development (i.e. explicitly addressing its relation to sustainable regional development) remains less explored. We argue that the shape and direction of this co-development ought to be understood as fundamentally bound by ecological boundaries and influenced by social and societal dynamics.

Interrelations between regions and between spatial scales

Further, the relevance of a relational perspective on regions and different spatial scales has been emphasised. We define this as the second core dimension regarding the mutual impact between regional industrial path development and socio-technical transitions.

Industrial paths are rarely constrained to just one region, although they are likely to have a strong influence on the development of the region where they mainly stem from. While regional development is highly contingent upon place-based endowment factors and politics (Barca et al., 2012; Wanzenböck and Frenken, 2020), the build-up of skills and knowledge may occur endogenously within a region (building cumulatively on existing, regional knowledge) or exogenously (based on the incorporation of extra-regional knowledge), or most likely, in a combination of both (Balland and Boschma, 2021; Trippl et al., 2018). As experiences are shared and experimentation and learning are encouraged, regionally tried and tested solutions (technologies, business models, regulatory arrangements etc.) may also be taken up in other regions, which may or may not work for them (Hassink and Hülz, 2010). Within this process, regions may specialise differently, given that they are equipped differently with natural resources and other assets. Sites of technological innovation, production and application are often not co-located, thus commonly reinforcing old and creating new inequalities (Skjølsvold and Coenen, 2021; Tödtling et al., 2021). Extant work on regional industrial path development tends to side-line such unexpected or unintended consequences as part of transformative regional development.

Regional industrial paths are not isolated in the focal region but are usually linked vertically with global production networks and associated innovation systems (Binz et al., 2014). Likewise, transitions may be expected to manifest themselves in changes in the regional, national and international discourse, in regulatory frameworks and patterns of production and demand (Sjøtun and Njøs, 2019). It is well established that regional industrial path development relies to a considerable degree on formal and informal institutions as they impact actors’ mindsets and innovative capacities. Both formal and informal institutions may be observed at the regional (Rekers and Stihl, 2021) or at the national (Chlebna and Simmie, 2018) and global levels (Grillitsch and Rekers, 2016). They provide the regulatory and social infrastructure for the creation and further development of regional industrial paths.

In summary, to encourage transformative regional development, interregional learning processes are crucial. Actors as well as both formal and informal institutions at various spatial scales ought to align vis-à-vis this goal. While exploring the spatiality of transitions has gained great popularity, we still miss insights on how exactly formal and informal institutions in regions are shaped by dynamics on other spatial levels and vice versa. We argue that these interrelations must be analysed as crucially entangled with ecological boundaries and social dynamics.

Summary: The interrelation between industrial path development and transitions

Above, we have laid out two core dimensions of the interrelation between regional industrial path development and transitions. We have described them as a matter of relations between industries, and between industry and spatial dynamics. Thereby, we have shown that regional industrial path development has impacts on and is likewise structured by transitions: combined, regional industrial development paths may have positive, negative, or neutral effects on sustainable regional development. Different regions in transformative development are likely to influence each other, and multiple scales interdepend. Fundamentally, to be sustainable in the sense of long-lasting and beneficial for future generations, transformative regional development must remain within the safe and just operating space as defined by minimum standards of wellbeing and ecological boundaries. Finally, we argue that institutions, socio-cultural aspects, and social relations crucially influence and condition the behaviour of actors (including innovators, policymakers, and citizens/consumers).

Grasping transformative regional development – A research agenda

Structured by this perspective, we suggest enhancing our understanding of transformative regional development by tracing interrelations in the two, above discussed, core dimensions. We now turn to each dimension separately to lay out associated research avenues.

How does the interaction between multiple regional industrial paths affect transformative regional development? What is their combined effect?

To gain a more profound understanding, we need to consider industrial paths, associated technologies, and their interdependencies with a novel lens. Closely related, innovation that goes beyond a technological focus requires stronger attention.

One overarching question concerns the presence of certain industries in a region and their (combined) impact on transformative regional development. What might be beneficial combinations of regional industrial paths for transformative regional development? Are there any regional industrial mixes that might be particularly conducive or obstructive? Who promotes their legitimation and how, and who challenges it? Which combinations might slow down transformative regional development, even against expectations, and perhaps more importantly, how can we prepare for this? While much of the literature in economic geography has focused on technological relatedness as the denominator for inter-path relationships and the development of new paths, so-far less considered factors are likely to become more relevant.

We know that both regional industrial paths as well as transitions rely on formal and informal institutions. The role of actors in changing, maintaining, and disrupting these institutions to support new paths is increasingly explored, but needs further attention. Such a perspective of institutional work is particularly useful to better consolidate what the actual activities are that underlie transformative regional development. Who are the change-triggering actors and what are their underlying motivations for action (respectively inaction)? What drives them to look for environmentally beneficial (re)combinations of new and existing inventions over others? What are the power relations and vested interests that structure their opportunity spaces? How can actors of obsolete industrial paths, who do not seem to benefit from transformative regional development, become engaged in the building of new paths to enable just regional development which empowers regional actors? How do previously less considered types of actors (such as civil society initiatives or NGOs) contribute to the creation of new paths and how do they assess their value vis-à-vis aims of sustainable development? The dynamics they set in motion and their impact on transformative regional development remain poorly addressed so far. Questions of skills and learning are essential for transformative regional development – not only for path extension (sustaining existing paths), but also, crucially, in terms of learning from other industries – for example, about how to cope with changing demands for products, about novel (more sustainable) designs, or about the introduction of new business models.

Finally, transformative regional development necessitates an altered, more conscientious use and re-use of (natural) material resources in production. Combinations of regional industrial paths may create so-far unexplored synergy effects in this regard. How can material inputs within and between regional industrial paths be reduced and optimised? How can relevant intra-regional actor-networks and collaborations be promoted? Can regional inter-industrial collaborations for more efficient material use be created through promoting demands between industries (e.g. the use of industrial waste streams)? Can the change of (natural) material inputs in one regional industrial path (e.g. the replacement of fossil by biological materials) promote the transformation, respectively emergence, of other regional industrial paths? Tackling these questions might conceptually lead to an integrated multi-paths perspective that acknowledges interdependencies between industrial paths and their environmental and social impacts from the outset.

How does transformative regional development in different regions interdepend? What are interscalar relations?

It is well-established that transitions as well as regional path development are place specific. This is down to the socio-cultural context, historically grown institutions like values and norms, as well as the endowment with resources, available infrastructures, markets, and networks. This implies that transformative regional development occurs in different regions at different times and at different speeds. We only have little knowledge of interregional learning in the context of transformative change. How do regional best practice examples influence practices in other regions? What dynamics of interregional competition or collaboration may give momentum to learning for transformative regional development? What are the underlying preconditions, drivers, respectively hindrances of interregional learning? How can interregional learning potentials be identified and strengthened? Which actors need to get involved in transformative regional development, and how can interregional actor-networks be supported? Given that sustainability transitions are relatively advanced in some regions while others suffer from unexpected and unintended social and ecological cleavages it is important to ask who does or does not get involved and who does and does not benefit from transformative regional development. This is considered to some extent within regions, but less so from a transregional perspective. Importantly, interregional learning does not only include technological learning in a narrow sense, but it also includes the aspects of unlearning, learning from mistakes as well as learning about long-term impacts and consequences. Furthermore, institutional learning as well as learning around social innovation and (changing) societal demands, are likely to be highly relevant mechanisms for transformative regional development.

Relatedly, there is more research required regarding the interdependence between different governance levels, including the possibility of regions to influence supra-regional context conditions. What is, on the one hand, the role of various public actors at different scales? How do they contribute to the legitimation of regional industrial paths? What institutional settings would be conducive to interregional learning between public actors as well as between private actors (e.g. concerning the sustainable combination of regional industrial paths) in different regions and on different levels? What is, on the other hand, the impact of private companies? A still under-addressed question is the role and contribution of multinational (and commonly incumbent) companies for transformative regional development and interregional learning. Multinational companies often have ties on different spatial levels and may therefore act as boundary-spanning organisations. So far, they are more commonly ignored or portrayed as hindrances to transformative development, emphasizing their role as incumbents.

Finally, societal discourses on the local, regional and superregional levels can be powerful mechanisms to influence informal institutions. How are public and private actors in regions influenced by these, and how do they affect transformative regional development? Which disputes and negotiation processes shape the development of paths? Changing societal norms and values are likely to influence demands for products and technologies, and ecological boundaries form crucial constraints. However, how such more aligned demand patterns spread across space and how they affect transformative regional development is less explored.

Towards a realistic picture of transformative regional development

Our research agenda is based on two core dimensions of mutual impact: First, understanding regional industrial paths and their interrelations and the resulting impacts offers more detail on the emergence and modification of paths and associated technologies as part of transformative regional development. Second, highlighting spatial interrelations between different regions and between different spatial scales is intended to offer starting points to better understand what links industrial path development with broader transition processes along the spatial dimension. Our call to understand both dimensions as fundamentally restricted by ecological boundaries and influenced by social dynamics reinforces known but, in our view, under-considered arguments on regional development. Here, we follow leading scholars’ calls for a renewed focus on the content and direction of innovation in order to address grand challenges, and for going beyond assuming certain characteristics or capacities of spatial scales (Madsen, 2022; Schot and Steinmueller, 2018; Uyarra et al., 2019). At the same time, we are deeply aware that both ‘transformative regional development’ as well as ‘sustainability’ itself are slippery notions that refrain from defining explicit aims, yet transport implicit expectations of ‘improvement’, which is rarely addressed openly in either of the debates we draw on. We hope that our research agenda contributes an analytical approach whilst also encouraging whole-systems perspectives to address the fundamental underlying assumptions of our economies and societies (Feola, 2020).

What exactly do the interlinkages look like? Which specific mechanisms couple paths and transitions? These are overarching questions that may guide the analytical agenda. The task at hand is both of a theoretical and an empirical nature: Our research agenda points out conceptual gaps such as the identification of structural couplings between regional industrial path development and socio-technical transitions as they would likely constitute important levers in shaping the direction of transformative regional development. It may also be understood as a call for empirical work to shed light on the real-life complexities that transformative regional development entails, even though such interrelations and their impacts (especially over time) are difficult to identify empirically. In-depth, qualitative, single-case studies may tease out the specific nature of the two core dimensions. Systematic case comparisons, employing qualitative, mixed, or quantitative methods and focusing on one dimension, for example dealing with interrelations between industrial paths in a region, or with interrelations between regions or spatial scales and their impact on transformative regional development, would deepen our understanding. Both might allow us to infer typical patterns of transformative regional development. The systemic nature of the endeavour further requires highly interdisciplinary approaches that combine expertise across and beyond social sciences.

A number of neighbouring bodies of literature may prove instructive as touching points for further research: A refined conceptualisation based on varieties of capitalism (Hall and Soskice, 2013) may be useful, in particular in light of its focus on coordination, strategic interaction and innovation, which all crucially structure the interaction between paths and transitions (cf. Loewen, 2022 for a review and critical discussion). The Foundational Economy approach (Bentham et al., 2013) argues for the substantial but commonly under-considered role of material infrastructure and providential services such as education, health and care (Heslop et al., 2019), which may address social polarisation and regional inequality, but might benefit from more consideration of environmental sustainability and the inherent trade-offs between social and environmental goals in transformative regional development (Hansen, 2021). The regional innovation policy debate on smart specialisation (Foray et al., 2009) has already moved on to put ‘sustainability’ centre stage in place-based innovation (McCann and Soete, 2020). At the same time, it will remain crucial to acknowledge the difficult processes of prioritisation between the often conflicting goals that lie ahead for policy makers (Benner, 2022).

Regional industrial paths and socio-technical transitions develop in a deeply interdependent fashion and shape each other's evolution. Paths constitute transitions, but transitions as an aggregated phenomenon likewise impact the evolution of individual paths. Of course, it is relevant to look at industrial paths from a pure path perspective. Likewise, it may make good sense to purely analyse transition processes. Nonetheless, if we want to explore the underlying dynamics that shape the occurring development processes, how these dynamics unfold in space and over time, and which interdependencies exist, we argue that the research avenues laid out here will offer key starting points.

Footnotes

Acknowledgements

Given the history of this paper, there are numerous people to thank. First, we wish to thank the editor, Jamie Peck, and three anonymous reviewers at EPA for very constructive comments. We would also like to extend thanks to reviewers in previous rounds of review who helped us to improve our argument. Further, we thank the attendees of respective sessions at two GeoInno conferences (Stavanger and Milan), as well as several RSA conferences and smaller colloquia. Finally, colleagues have kindly read and constructively commented on previous versions (Lars Coenen, Teis Hansen, Sebastian Rohe) and offered instructive advice throughout the process (Markus Steen, Christian Binz, Robert Hassink). Any remaining faults are with the authors.

Declaration of conflicting interests

The authors declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The authors disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: This work was supported by the Deutsche Forschungsgemeinschaft (grant no. 316848319) and by Sweden's innovation agency Vinnova (grant no. 2016-04227).

ORCID iD

Camilla Chlebna

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