Industrial-institutional co-evolution in regional economies

How do regional economies develop differently, even within the same country and under the same policies? This is the basic question the research project on industrial-institutional co-evolution addresses by looking at the role of institutions such as mutual trust in business relationships, entrepreneurial attitudes, or entrepreneurs inclination to cooperate. At the same time, the role of individuals and their decisions in shaping these institutions is examined. The research design focuses on three regional economies in Israel, a country that has seen the rise a dynamic entrepreneurial scene during the past decades. The coastal city of Haifa is a traditional industrial center whose service sector is evolving. In the Northern city of Nazareth, a young scene of Arab entrepreneurs in the information and communication technology industry has emerged. Beer Sheva in the Negev desert is developing into an important cybersecurity cluster. Together, these three empirical case studies allow for conclusions on how the same macro-level context can lead to different patterns of regional development and for why the impact of national policies differs between regions.

The research project addressed the role of agency and institutions in path development and made advances in the ongoing debate on the drivers of regional industrial path development by further elucidating the interplay of agency and institutions. On the conceptual level, the nuanced view on system-level agency and the retheorization of industrial-institutional coevolution have added more clarity on these concepts. Empirically, the project generated 103 semi-structured distance interviews with experts and stakeholders on the national level in Israel and on the regional level (Be'er Sheva, Haifa, Nazareth), combined with additional 11 distance interviews complementing earlier research and 12 additional distance or face-to-face interviews conducted by a cooperation partner, with both additional interview series dealing with the Negev region. Hence, the project directly or indirectly generated original data from 126 interviews, combined with a qualitative document analysis of newspaper articles spanning several years. Results from the first 40 interviews were used to address the issue of the social and spatial inclusiveness of path development, thus taking up an accelerating debate in economic geography about the socio-economic outcomes of innovation processes. Doing so addressed the project's overall research questions with a specific focus on inclusiveness and contributed to filling a gap in evolutionary economic geography. The significance of these insights relates to the topical development of the literature at the intersection between innovation studies and evolutionary economic geography in recent years to account for the directionality of paths in addressing grand societal challenges. However, the interest in social inclusiveness has been relatively low so far in this part of the literature but currently seems to be on the rise. Hence, project results can make a relevant contribution to this debate.