Scandinavian Working Papers in Economics

Papers in Innovation Studies,
Lund University, CIRCLE - Centre for Innovation Research

No 2023/1: Directionality and Subsidiarity: A Regional Policy for People and Planet

Markus Grillitsch (), Lars Coenen () and Kevin Morgan ()
Additional contact information
Markus Grillitsch: CIRCLE, Lund University, Postal: CIRCLE - Centre for Innovation Research, Lund University, PO Box 117, SE-22100 Lund, Sweden
Lars Coenen: Western Norway University of Applied Sciences, Postal: Norway
Kevin Morgan: Cardiff University, Postal: UK

Abstract: In this paper we consider if and how regional policy can be designed to foster sustainability (the wellbeing of people and planet) as well as being a catalyst for innovation and development. Focusing on the entrepreneurial discovery process, the paper explores its role and limitations in balancing directionality and subsidiarity in regional development. In its original conception, it was designed to direct regional development towards promising future opportunities building on existing strengths. We argue that while the rationale of the entrepreneurial discovery process serves innovation-driven competitiveness, it lacks sufficient sensitivity to the social and environmental dimensions of sustainability. Rather than retrofitting the missing dimensions of sustainability, the logic needs to be rethought from the basics, which we do by asking if and under which conditions the entrepreneurial discovery process directs regional development to deliver on human wellbeing and environmental impact. We argue that this depends on the nature of existing opportunities, on how development is framed and on who is engaged in the discovery process. To this end we argue that regional policy needs to i) adopt a more capacious perspective to change processes and policy agency, taking action if needed to reconfigure the opportunity space, and ii) adopt a broader perspective on discovery processes, which goes beyond the realm of entrepreneurs and business alone and integrates the lessons learned from experimentation processes in and across a variety of domains. For this to happen, it is necessary to develop the institutional capacity for a regional development strategy that is sensitive to multiple (and sometimes conflicting) societal goals.

Keywords: regional innovation policy; smart specialisation; partnerships for regional innovation; sustainability transitions; discovery process; opportunity space

JEL-codes: O10; O20; O38; R10; R58

Language: English

21 pages, February 22, 2023

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