Bigger, better, faster, more! How to increase the intensity and relevance of the technological progress of European regions

Abstract

This work contributes significantly to previous research on the relationship between specific features of a regional knowledge space and the technological progress of the region. In particular, the main element of originality of this work is to have isolated the determinants of the technological progress intensity on the one side and those of the technological progress relevance on the other side. We acknowledge the importance of knowledge assets for new knowledge production, and we identify path-dependent processes that allow a region to become increasingly competitive in terms of innovation potential. In particular, adopting an evolutionary view of regional development, we describe the regional knowledge space through four crucial characteristics: 1) technological knowledge base, 2) technological cumulativeness, 3) technological diversification, and 4) technological relatedness. We then measure to what extent each of the knowledge space's characteristics differently affects the technological progress intensity and relevance of the region. A longitudinal study of 269 European regions over the period 1996-2012 was organized using data from the REGPAT and Eurostat databases. Our results show that the factors influencing the innovation intensity are not the same as those affecting the innovation relevance, except for technological relatedness. It appears, in fact, that technological relatedness is the key factor influencing the technological progress of regions, measured either in terms of intensity or in terms of relevance. Finally, implications for EU policies supporting and stimulating regional technological progress are discussed.