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Smart specialisation features prominently in the European regional policy context. This paper discusses how the configuration of the regional institutional framework affects smart specialisation dynamics and policy. It elaborates why and how institutional diversity and integration promote entrepreneurial discovery processes, spillovers and agglomeration effects, and thereby structural change in regions. Policy challenges arising from the regional institutional framework are identified, discussed and related to well-researched system failures of regional innovation systems.

The overall objective of this paper is to contribute conceptually to the questions why and how regions transform and it joins the debate on economic evolution and institutional change. The paper addresses the challenge of how to conceptualise the interdependencies of institutions of different types and spatial scales. It aims at developing a conceptual framework that i) appreciates the variety of institutional forms and the multi-scalar nature of institutional landscapes, ii) is tangible enough for operationalization in the context of empirical research, and iii) contributes to our understanding about institutional change and economic evolution in regions. The paper offers a review on how institutions have been conceptualised in the context of evolutionary economic geography, a proposal for understanding regional institutional frameworks and institutional change through a novel way of conceptualising institutional layering, a clear distinction between concepts such as agency, networks, social structures and institutional layers, and a discussion about how this can improve our understanding about regional transformation. The concept of institutional layering contributes to the literature on institutional change and institutional complementarity. Important mechanisms and drivers of institutional change within and between institutional layers are discussed. The emphasis in this paper lies on the dynamic interplay between institutional layers. One of the main advantages of the concept of institutional layering is that it illuminates the causality of institutional change. It demands to identify which institutional layer changes how and because of what reason, appreciating also the role of agency and power. In this context, the literature on institutional complementarity underlines the importance of interdependencies between different types of institutions for institutional change as well as economic outcomes. The concept of institutional layering contributes by providing an analytical framework for studying these interdependencies. Furthermore, several mechanisms are identified how the concept of institutional layering contributes to our understanding of regional transformation. The variety and connectedness of institutional layers in a region have an effect on learning and knowledge exchange, the probability to benefit from related variety, the forming of collective interests and resources, the exploration of path plasticity as well as institutional dynamics. Depending on the degree of variety and connectedness of institutional layers, regions will therefore experience differences in the speed of economic evolution, resilience, and the likelihood for continuous or disruptive changes. Using the two dimensions, variety and connectedness of institutional layers, the paper moves towards a typology of regions and relates it to existing empirical literature.

Co-location alone is not sufficient to ensure efficient and effective interaction between economic agents. Also, institutions at multiple scales shape the behaviour of organizations and provide incentives for interaction. However, institutions, as well as the impact of institutions on economic agents, are not static, but rather change over time. In this paper we investigate this dynamic process: How does institutional change at different geographical scales affect localized learning processes? Using an intensive case study of the medical technology sector in Southern Sweden, we trace in detail how institutions at the supra-national, national and regional scale have changed over the past 15 years and how these have affected the opportunities for localized learning between firms and hospitals. Our case makes three contributions. First, it provides a detailed empirical example of the interdependencies between institutions at the supra-national, national and regional scales. Second, as institutions shape the behaviour of organizations, we demonstrate that institutional change introduced at the extra-regional scale can have profound consequences for the establishment of local innovation linkages – and thereby for the opportunities for localized learning. Third, this leads us to reconsider the ambitions of regional policies that aim to enhance localized learning.

AbstractHuman agency has become a core topic in economic geography complementing traditional, structural approaches to explain regional development. This paper contributes firstly with a discussion of the theoretical and conceptual relationships between the agency of individuals, organizations, and systems. Secondly, it proposes a novel analytical framework for studying how human agency, combined with external changes affects regional economic development, and how regional structural preconditions and external changes explain the activation of change agency. Thirdly, the relevance of the framework is examined through comparative studies of about 20 years of industrial development in three Norwegian regions. This illuminates the importance of human agency in regional transformation processes, how regional preconditions influence but not determine the activation of change agency, as well as why and how regional policy plays a role in the emergence of change agency. Yet, future research needs to investigate the context conditions, which promote or hinder the activation of change agency, to trace change in economic activities over time and link it to causal mechanisms, and to pay attention to the unintended consequences of change agency in the longer‐term.

Human agency has become a core topic in economic geography complementing traditional, structural approaches to explain regional development. This paper contributes firstly with a discussion of the theoretical and conceptual relationships between the agency of individuals, organizations, and systems. Secondly, it proposes a novel analytical framework for studying how human agency, combined with external changes affects regional economic development, and how regional structural preconditions and external changes explain the activation of change agency. Thirdly, the relevance of the framework is examined through comparative studies of about 20 years of industrial development in three Norwegian regions. This illuminates the importance of human agency in regional transformation processes, how regional preconditions influence but not determine the activation of change agency, as well as why and how regional policy plays a role in the emergence of change agency. Yet, future research needs to investigate the context conditions, which promote or hinder the activation of change agency, to trace change in economic activities over time and link it to causal mechanisms, and to pay attention to the unintended consequences of change agency in the longer-term. ; publishedVersion