Innovation policies for regional structural change: combining actor-based and system-based strategies

This chapter analyses opportunities and challenges for regional innovation policies designed to promote new path development in different types of regional innovation systems (RISs). RISs differ enormously in their capacity to develop new growth paths due to pronounced differences in endogenous potentials and varying abilities to attract and absorb exogenous sources for new path development. We distinguish between different types of regional industrial path development, which reflect various degrees of radicalness of regional structural change. The chapter offers a conceptual analysis of conditions and influences that enable and constrain new path development in different types of RISs and outlines the contours of policy strategies that are suitable for promoting new path development in different RISs. Regarding policy strategies, a distinction is drawn between system-based and actor-based policy approaches. System-based strategies aim to improve the functioning of the RIS by targeting system failures, promoting local and non-local knowledge flows and adapting the organizational and institutional set-up of the RIS. Actor-based strategies, in contrast, support entrepreneurs and innovation projects by firms and other stakeholders. We argue that both strategies will have only a limited impact on regional economic change when applied alone. However, if they are combined, they are well suited to promote new path development. The chapter discusses which specific combinations of system-based and actor-based policy strategies matter for different types of RISs.