The Evolutionary Process of Knowledge Recombination - Relatedness, Variety and Regional Growth

Authors: Dieter Kogler*, Spatial Dynamics Lab, University College Dublin, Changjun Lee, Spatial Dynamics Lab, University College Dublin
Topics: Economic Geography, Spatial Analysis & Modeling, Europe
Keywords: Technological Change, Evolutionary Analysis, Knowledge Spaces, Relatedness, Variety, Entry, Diversification, Economic Growth, Smart Specialization Strategies
Session Type: Paper
Day: 4/3/2019
Start / End Time: 9:55 AM / 11:35 AM
Room: Diplomat Room, Omni, West
Presentation File: No File Uploaded

In Evolutionary Economic Geography, scholars have believed that technological (or knowledge) diversification is mostly driven by new entries related to technologies (or knowledge) which regions already have had due to the tacitness, stickiness, and embeddedness of knowledge. It is also one of the best supporting evidences of the fact that skills, technology, and knowledge are spatially concentrated. This phenomenon of the knowledge concentration makes the divergence between the leading and the lagging countries’ economy become huge. However, there are still reported some cases of ‘catch up economy’ by unrelated entries, for example, in South Korea, Taiwan, and Ireland. We assume that their knowledge spaces had evolved mostly with sticking to related entries, but at the same time, also with bravely embracing unrelated entries turning them into their relative comparative advantages.
To measure how new entries are related to the regional incumbent knowledge structure, we create a knowledge gravity model. In this way, we calculate the average entry relatedness (AER) every travel to work area (TTWA) in UK. Data said that there is a diversification without entry relatedness (High number of entry but low entry relatedness), and there is no specific correlation between diversification and entry relatedness.
With taking the principle of relatedness, the present study investigates the role of the unrelated entry to deviate the path-dependency, and how to balance between related and unrelated entry considering socio-economic outcomes (i.e. growth rate of employment, GDP, and so on).

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