University of Kiel, Germany Evolutionary Economic Geography, B.Sc. Geography

1. Lecture 1 - Introduction: economic geography and its recent paradigms
Evolutionary
Economic
Geography
Summer
Semester
2021
Final lecture
01/06/2021

2. 8) 20-05: Strategic Thinking in Regional Development, Strategic
Spatial Planning and Regional Attractiveness
9) 25-05 (Tuesday): Recap > Corporate Spatial Responsibility, and
Strategic Coupling
10) 27-05 (Thursday): Strategic Coupling recap >
Smart Specialisation Strategies in Today’s Globalized World
11) 01-06 (Tuesday): New Directions in Economic Geography
Extra recording: Global Value Chains (google drive for recordings)
Lectures, April, May, June 2021
Tuesday, 10:15 – 11:45 | Thursday, 10:15 – 11:45
OLAT

3. Where do we stand
Human impact on Earth's
geology and ecosystems
OLAT
e.g. global warming
We have been
Discussing this

4. Economic geography
Production, consumption,
distribution
Global value chains
and their impacts on
ecosystems
Global production
networks (TNCs)
Geographies of
innovation
Geographies of
entrepreneurship
Investment
attraction (FDI)
Labour market
Socioeconomic
transformation
Strategic directions
Structural change
Path-dependencies
Path-renewal//path-creation
Time-based
competition

5. Strategic Coupling and Tesla?
Open innovation
OLAT > J_25-05 - Lect. 9 - Corporate...
Tesla Motors follows the
coupled innovation
process by establishing
strategic partnerships.
Coupled innovation refers to innovation in
cooperation with supplemental partners.
These partnerships can be formulated as
joint ventures and alliances.
Tesla Motors applies open
innovation and its coupled
process by establishing R&D
collaborations with major
companies

6. Contrasting principles of Closed to Open innovation
(Chesbrough 2003) > inter-firm strategic partnerships
In comparison to strategic coupling
not necessary a win-win situation
to/towards local communities

7. Tesla Motors Partnerships (Holmberg, 2011).
Partnerships:
 Alliances
 Joint ventures
 Loans
(US Government)
Tesla's Battery Tech Explained

8. Three pillars of a
smart specialisation strategy (policy)
1) Entrepreneurial discovery and spillovers > the
discovery is the fact that it is possible to move from
one product/good/service to another on the basis of a
similar set of engineering capabilities and techniques;
2) Entry and agglomeration > of similar and
complementary businesses (cluster formation);
3) Structural changes > in the form of the transition from
an old business to a new one.
With // without a specific policy

9. 1) Entrepreneurial discovery
From ideas to > new domains > new
business > entering new paths
It precedes the innovation stage and
consists of the exploration and
establishment of a new domain of
opportunities (technological and market),
potentially rich in numerous innovations
that will subsequently occur.
It increases innovation probabilities
It is the demonstration that something is possible – for example,
moving from the manufacture of nails to glasses; developing from
traditional silk manufacture to a production of technical fabrics;
integrating nanotechnologies into the wood pulp production

10. 2) Entry and agglomeration
New opportunities because they are useful
The social and business value of the
discovery is that it informs the whole
system that a particular domain of R&D and
innovation is likely to create new
opportunities for the regional economy.
Entry (market/system) constitutes the
confirmation that others see this
discovery as meaningful.
Entry is a key ingredient of smart
specialization so that agglomeration
externalities (clusters) can be realised.

11. 3) Structural changes
New areas of opportunity
The potential success of discoveries
and new activities that aim to explore
and open up a new area of
opportunities will ultimately translate
into some kind of structural changes
within the regional/local economy
3.1) Transition
3.2) Modernisation
3.3) Diversification
3.4) Radical foundation
Differences
are difficult
to grasp

12. Structural changes
Example
The case of silk/textile firms in Lyon
exemplifies such a transition pattern
from traditional technologies for old
declining markets to new
technologies allowing these firms to
enter new markets.
3.1) Transition
A new domain emerging from an existing industrial system (a
collection of R&D, engineering and manufacturing capabilities that
sustain innovation).
Lyon

13. Structural changes
Development of ICT applications in
tourism and the exploration of
biotechnology potentials in the agri-
food industry.
3.2) Modernisation
When the development of specific applications of a general
purpose technology produces a significant impact on the efficiency
and quality of an existing (often traditional) sector.
 Protecting crops
 Drones in agriculture
 Irrigation systems
 Improving nutritional value

14. ICT in agriculture (e.g.)
3.2) Modernisation
Please keep in the mind potential drawbacks of modernisation

15. Structural changes
Such synergies make the move towards a new, growing market,
more attractive and profitable (e.g. banks offering insurance)
3.2) Diversification
Concerns potential synergies (economies of scope) that are likely to
materialise between an existing activity and a new one.
Modernise and Diversify?
A challenge
‘regions
diversify by
branching into
industries that
are related to
their current
industries’
(Neffke et al.
2009).

16. Structural changes
3.4) Radical foundation
A new domain is founded with no direct link
with existing structures (industrial/services).
Government intervention is needed to address underinvestment in
entrepreneurial discovery or insufficient capabilities to undertake
entrepreneurial discoveries or to move from idea to practice/business.
https://www.metromile.com/

17. Role of smart specialisation
Let’s assume that the regional economy includes
 A large agri-food sector characterised by weak to moderate
innovation capacities > sleeping giant
 A high-tech cluster > excited goblins
 Low-tech SMEs operating as subcontractors for the automotive
sector, which is based in other regions. > hungry dwarfs
The sleeping giant, as well as the hungry dwarfs, badly need
structural changes – modernisation or diversification – and this
will happen through a smart specialisation strategy that
involves them.

18. Role of smart specialisation
Ex ante actions are carried out well to support the formation of
entrepreneurial knowledge and capabilities, an inclusive strategy
will produce results enabling strong entrepreneurial discovery
projects to be developed > in all parts of the economy.
(Inclusive) Smart specialisation
strategy
Winner taking it all
Nice projects + funding

19. Current examples of smart specialisation
Examples here
Technology Circular bio-economy
Energy transition

20. Current examples of smart specialisation
Examples here
More participation
Cross-sec. policies Foster decision-making

21. Current examples of smart specialisation
Examples
Implementing Smart Specialisation: An analysis of practices across Europe
Smart Specialisation Platform on Agri-food, the
Region of Tuscany (Italy)
Participation in the thematic partnership has
enabled an organisational change at the level of
regional ministries, with an improved
communication on Smart Specialisation.
It also allowed for a behavioural change among
regional officers/stakeholders with more effective
collaboration among various operational
programmes in the lead region
Effective
collaboration
for
organisational
change

22. Current examples of smart specialisation
Multi-level governance that fosters innovative
market solutions via open data
The Six City Strategy, is carried out by the six largest cities in Finland -
Helsinki, Espoo, Vantaa, Tampere, Turku and Oulu.
Source
(Finland)

23. Current examples of smart specialisation
The Six City Strategy
The cities have opened their data
portals to encourage its commercial
use and help companies scale-up
their business to the six cities.
The project portfolio ranges from
smart mobility, clean technologies
and agile piloting, to creating
development environments for
product testing and boosting open
data for business. Source
Open data for business

24.  Challenged in regions with less developed research and innovation
(R&D) > triggering questions about the universal applicability of its
concepts and methods.
Challenges: smart specialisation
Needs to be more open to
incorporating foreign direct
investment (FDI) and global value
chains (GVCs) into its conceptual
discourse and its policy
Needs strengthening policy delivery
rather than policy design
The entrepreneurial discovery process (EDP) implicitly assumes a mature
institutional framework, which is hardly realistic in the case of regions with
less developed R&I systems Examples
Source
Source

25. State-of-the-art regional development theories highlight the important role of
informal institutional factors such as
Challenges: smart specialisation
 Trust
 Responsibility
 Professionalism
 Partnership and
 Shared leadership
(McCann and Ortega-Argile´s 2014)
This contrasts with the under-developed institutional framework
in lagging-behind regions, which together with risk-averse or
“play it safe” mentality > limits the space for experimentation,
manoeuvre and flexibility in decision-making and public initiatives
Several factors
could hinder
implementation
A potential solution to this problem lies in the improvement of
multi-scalar coordination
(Asheim et al. 2011; Todtling et al. 2013).

26. Evolutionary Economic Geography

27. Slow innovation (e.g. Mayer; Steen & Dhondt)
New Directions in Economic Geography
Many innovation policies seem to be based on the idea that speed is good
More than speed, society needs room for exploration, reflection and learning, and
attention for social processes within innovation projects, in order to make these
projects have significant and sustainable impact
If we stress speed as the most critical performance
element of innovation, then we transform the
innovation process into a technocratic approach with the
wrong elements at the core.
need for
speed

28. Slow innovation: one line of reasoning
Innovation that is good for the planet and people
(Loch et al. 2005).
Quick-fixes or one-size-fits-
all will not help innovation -
we should be thinking in
terms of guiding
principles which can help
us maximize chances for
innovations to happen.

29. Slow innovation: alternative line of reasoning
(Shearmur 2015).
An unspoken assumption (Glaeser 1999;
Shearmur 2012) that innovation is
essentially an urban phenomenon since
interactions and networking are facilitated
by the geographic co-mingling of actors.
Principle
Proximity between actors—a proximity that
enables information exchange and collaboration—
is crucial (Boschma 2005; Carrincazeaux and Coris
2011)….
Innovation unfolds mainly
 Innovation takes place in
creative cities (Florida 2002)
 Or in larger metropolitan
areas (Glaeser 2011)
 Patents and new products
are more likely to be
introduced in large cities
(Acs, Anselin, and Varga
2002; Audretsch and
Feldman 1996)

30. Innovation processes in non-urban geographies also occur
Slow innovation: alternative line of reasoning
Research that describes innovation in places that are not particularly well connected
(Cooke 2011; Fitjar and Rodriguez-Pose 2011; Knox and Mayer 2009).
As a result,
innovation theories
do not sufficiently
consider the context
of the periphery and
how this context
may foster or hinder
the development of
innovative products,
technologies and
services
(Mayer)

31. Explanations for this are varied > exploit local knowledge:
 These isolated places may replace buzz and geographic proximity by various
types of social and network proximity, may rely on local knowledge that is
difficult to communicate, may be closely connected with local resources, or may
innovate in certain areas
 Environmental sustainability
 Agriculture
 Nature-oriented tourism activities for instance, which are areas often
overlooked by large-city protagonists.
Slow innovation: alternative line of reasoning

32. Slow innovation: lessons
Innovation processes based on local knowledge and slow principles
Small and Medium-Sized Towns
(Servillo et al, 2017; Dijkstra, Garcilazo &
McCann, 2013; ESPON, 2013)
Prosperous or advanced
urban-regions
(Kemeny & Storper, 2020; Hersperger et al. 2019 ; Fratesi &
Wishlade, 2017)
Low-growth and
low-income regions as in
‘The lagging regions report’
(EU Commission, 2017)
Counteract mainstream geography of innovation

33. Small and medium-sized towns (SMSTs) have long been
overlooked in the urban and economic geography
literature.
However, in recent years, scholars have started to pay
attention to these types of urban places.
This is in part due to the fact that recent empirical studies
have shown that in industrialized countries, smaller cities
(and even rural areas) have performed better in terms of
population and economic growth than advanced urban
regions (Dijkstra, Garcilazo, & McCann, 2013; McCann &
Acs, 2011).
Slow innovation in peripheral territories

34. Lagging regions, SMSTs and local communities
within > still matter to secure cohesive regional
development patterns (McCann & Ortega-Argilés, 2019).
*A number of non anglophone sources concur with this argument
Source of economic and social dynamism
for many prosperous urban regions
(Kemeny and Storper, 2020; Rodríguez-Pose, 2018)*
(Torres de Araujo 2020 Rodrigues Carvalho 2018 Pinilla & Sáez 2017)
Slow innovation in peripheral territories

35. Slow Innovation: how?
(Knox and Mayer 2013)
Aligns > territorial governance > evolutionary EG > Local values

36. Slow innovation > Fast innovators
Slow innovators interact with less frequency and rely on slow-
decay information and knowledge, whereas
 Fast innovators interact with higher frequency and rely on
faster decaying information and knowledge.
Currid (2007) shows,
success in fashion
rests on the rapidity
with which new trends
can be identified,
validated, and
translated into clothes
that can be sold.
Designers need to be in the
thick of a major
metropolis
Responding to market(ing); consumers

37. Slow innovators are less dependent on intensive outside
interactions—which does not imply that they have a lower variety of
external contacts, just that their outside interactions are > less
frequent and probably > more strategically chosen.
Keep in mind that in “fast” environments > the quantity of false
information, useless knowledge, and failed collaborations,
presumably far higher for fast innovators in interaction-intensive
environments. > Metropolitan environments attract innovators who
proceed by trial and error, whereas smaller cities attract innovators
operating in a more stable; long-lasting environments.
Hypothesize that:
Slow innovation may be the key to transforming the economy
towards a renewed industrial path (neo-industrial
development) > adopting sustainability-oriented practices
Slow innovation > slow innovators

38. Slow innovation > slow innovators
Periphery as a space in which creativity can more freely unfold
because innovators are positioned at the fringes and are more
free to experiment with unconventional ideas (Grabher 2018).

39. Slow innovation > slow innovators
High-performance sports gear
and wear — will not be
reacting to short-term market
signals
Whilst there are fashions in
these industries, market signals
are fairly constant: safer,
tougher, and more
appropriate equipment for a
harsh environment.
Firms that have already
developed products based upon
this type of knowledge may be
better able to do so again.
Such innovators have no pressing
need to be located in proximity to a
cluster or large urban area.
(Malerba 2002)

40. Norddeutsches Doktorandenkolloquium Wirtschaftsgeographie
25. bis 26. Februar 2
021
Territorial autonomy
(endogenous development dynamics)
Regional determinism
(exogenous development dynamics)

41. Evolutionary Economic Geography

42. Mission-oriented innovation policies
Source
Before advancing > this discussion aligns with

43. Mission-oriented innovation policies
Mission-oriented innovation policy responds to these
‘grand challenges’ by identifying and articulating
concrete problems that can galvanise production,
distribution, and consumption patterns across various
sectors.
In doing so it recognises that:
 Economic growth has not only a rate but also a direction
 Innovation requires investments and risk taking by private and public actors
 The State has a role in co-creating and shaping markets
 Successful innovation policy combines the need to set directions from above
with the ability to enable bottom up experimentation and learning
 Missions may require consensus building in civil society.
Source
Mazzucato 2018

44. Mission-oriented examples
German Energiewende
Focuses on concrete problems that
require system-wide transformation
across different types of sectors, and
involves partnerships
between different actors
(private, public, third sector, civil society)
Going to the moon required
innovation in aeronautics, robotics,
textiles, and nutrition etc Mazzucato 2018

45. “mission-oriented” policies that are aimed at achieving specific objectives
Mission-oriented innovation policies
Must enable bottom-up experimentation and
learning so that the innovation process itself
is nurtured through dynamic feedback loops
and serendipity (Rodrik, 2004)
Mission-oriented
policies are not just
about throwing funds
at problems but doing
so in specific ways
For examples in Germany
(Cantner and Pyka 2001)
Mazzucato 2018

46.  The active role being taken by governments and transnational organizations to
develop strategies for a greener economy can be seen through a mission-
oriented lens—as can those being developed to create more wellbeing for an
ageing population, and better jobs for modern youth (European Commission,
2011)
 In fact, these challenges—which can be environmental, demographic,
economic, or social—have entered innovation policy agendas as key
justifications for action, providing strategic direction for funding policies and
innovation efforts
Mission-oriented policies can be defined as systemic public policies that
draw on frontier knowledge to attain specific goals

47. A mission-oriented approach highlights the need to make a precise diagnosis of
the technological, sectoral, or national innovation system that an innovation policy
wishes to transform
Mission-oriented policies as place-based
 Missions should be well defined. More granular definition of the technological
challenge facilitates the establishment of intermediate goals and deliverables, and
processes of monitoring and accountability
Mazzucato 2018
 A mission does not comprise a single R&D or innovation project, but a portfolio of
such projects. Because R&D and innovation is highly uncertain, some projects will fail
and others will succeed. All concerned should be able to accept failures and use them
as learning experiences.
 Missions should result in investment across different sectors and involve different
types of actors. To have highest impact, missions should embrace actors across an
entire economy, not just in one sector and not just in the private or public realm.
 Missions require joined up policy making, whereby the priorities are translated into
concrete policy instruments and actions to be carried out by all levels of the public
institutions involved. While these missions should involve a range of public
institutions, it is crucial that there is a strategic division of labor among them, with
well-defined responsibilities for coordination and monitoring.

48. Choosing and implementing mission-
oriented policies
Missions should be broad enough to engage the public and attract cross-
sectoral investment and remain focused enough to involve industry and achieve
measurable success > Missions stimulate the development of a range of
different solutions to achieve the objective
Mazzucato (2018)
From
challenges to
missions
A culture of
experimentation
and risk-taking
is a crucial
element in the
philosophy of
missions.

49. SDG 14 “Conserve and sustainably use the oceans, seas and marine resources for
sustainable development”
could be broken down into various missions,
for example “A plastic-free ocean.”
Innovation
This could stimulate research and innovation in means to
clear plastic waste from oceans or in reducing use of
plastics, innovation in new materials, research on health
impacts from micro-plastics, behavioral research, and
innovation to improve recycling or drive public
engagement in cleaning up beaches.
Each of these areas can be
broken down into particular
“projects.”
Mazzucato (2018)

50. Choosing and implementing mission-
oriented policies
Societal relevance
Ambitious but
realistic research
and innovation
actions
This mission could have a clear target to reduce the amount of plastic
entering the marine environment by 90%, and of collecting more than half
of the plastic currently present in oceans, seas, and coastal areas by 2025.
Targeted,
measureable,
and time-
bound
Cross-
disciplinary,
cross-sectoral,
and cross-actor
innovation
Multiple, bottom-
up solutions > a
combination of
various solutions,
focusing on
different facets of
the problem
MISSION
Bottom-up solutions
Mazzucato (2018)

51. Evolutionary Economic Geography

52. Degrowth debate within EEG
‘Degrowth’ became an interpretative frame
for a new (and old) social movement where
numerous streams of critical ideas and
political actions converge.
It is an attempt to re-politicise debates
about desired socio-environmental
futures and an example of an activist-
led science now consolidating into a
concept in academic literature.
A project of voluntary societal shrinking of
production and consumption aimed at social and
ecological sustainability.
It quickly became a
slogan against
economic growth
(Bernard et al., 2003)
Degrowth is a critique of the current
development hegemony (Rist 2008).

53. Degrowth: Essence > alternatives
The idea of ‘socially sustainable degrowth’ (Schneider et
al. 2010), or simply degrowth, was born as a proposal for
radical change.
The contemporary context of neo-liberal capitalism
appears as a post-political condition, meaning a political
formation that excludes the political and prevents the
politicization of particular demands (Swyngedouw 2007).
Within this context, degrowth is an attempt to re-
politicise the debate on the much needed socio-ecological
transformation, affirming disagreement with the current
world representations and searching for alternative ones.

54. Degrowth: streams as degrowth
Degrowth is therefore a possible path to preserve ecosystems by the
reduction of human pressure over ecosystems and nature, and a
challenge to the idea that decoupling of ecological impacts from
economic growth is possible.
Environmental goods are commonly cared
Economic growth and development can be
reconciled with earth's ecological limits (Hickel &
Kallis, 2019; Kenis & Lievens, 2015).

55. Degrowth: streams as degrowth
The essence of this source is the emerging need for more meaning in life
(and of life) in modern societies. It is a critique of life-styles based on the
mantras of working more, earning more, selling more and buying more.
Meaning of life and well-being
The ‘meaning of life’ source of degrowth also draws on findings in the
literature on the economics of happiness

56. Degrowth in the context of
sustainability transitions
The sustainability transitions research area studies the transformation of
socio-technical systems. They consist of actors (individuals, firms,
organizations, government structures), institutions (societal and technical
norms, regulations, standards), material artifacts, and knowledge.
Alternative value systems
Crisis as opportunities
Truly structural change beyond
economic geography
Khmara & Kronenberg 2020

57. Degrowth in the context of
sustainability transitions
Common grounds of degrowth and sustainability transitions.
Role of technology
Localism
Bottom-up
Politicization of science
Scientific findings
supporting policy-making
Having technology fulfilling
societal functions
Mission-oriented
Khmara & Kronenberg 2020
Grassroots innovation

58. (New) Directions in Economic Geography
Degrowth
Sustainable development
Addressing grand societal challenges
Sustainability transitions
Postcapitalism
Diverse economies
Green economy
Circular economy
Ecological modernization
Socioeconomic restructuring
Green deal
Localism – regionalism of supply chains
Postcolonial thinking
Urban to rural
Lagging places matter

59. It is time to start crafting your topic

60. Non-transgression of planetary boundaries
Johan Rockstrom video
GDP as an inadequate
measure of human
prosperity for a number
of reasons.
 Does not reflect:
 Nonmarket
economies
 The overall quality of
social and ecological
relations
 Ignores inequality
Benedikt Schmid

61. Evolutionary Economic Geography

62. Lecture 1 - Introduction: economic geography and its recent paradigms
Many thanks for
attending this
module
I wish you all a successful semester