Technological Specialization: a Pathway to Wealth Creation?

The impact of the economic crisis is forcing regions to rethink their overall approach to regional economic development. At the basis of regional economic competitiveness and social well-being lays a focus on innovation as a set of territorially grounded policies, multi-level in their governance structure and tailored to the reality of individual regions. Parallel to this emphasis is the strategic allocation of scarce public funds, a European policy that has been labelled as ‘Smart Specialization’. Recently this notion has been advanced as instrumental to create economic welfare on the level of regions; its goals are identifying and fostering domains of existing and potential competitive advantage, where regions can specialize in diversified ways compared to other regions (‘specialized diversification’). On this line, the aim of this work is to check whether and to what extent different industrial policies of specialization and diversification affect regional performance; a methodology consisting on patent-based indicators is introduced to compute related variety, unrelated variety, and specialization measures. Using data referring to EU-27 regions at NUTS 2 level is shown the goodness of the technological diversification, and in particular related variety, as driver for developing new growth paths beneficial for regional economy; on the contrary, the technological specialization displays a negative impact on regional performance.