Measuring the effects of knowledge accumulation and technological space relatedness on innovation performance of European regions

This work contributes significantly to previous research on the relationship between specific features of a regional knowledge space and the technological progress of the region. In particular, the main element of originality of this work is to have singled out the determinants of the technological progress intensity and relevance. We acknowledge the importance of knowledge assets for new knowledge production, and we identify path-dependent processes that allow a region to become increasingly competitive in terms of innovation potential. In particular, adopting an evolutionary view of regional development, we describe the regional knowledge space through four crucial characteristics: 1) technological knowledge base, 2) technological cumulativeness, 3) technological diversification, and 4) technological relatedness. We then measure to what extent each of the knowledge space’s characteristics differently affects the technological progress intensity and relevance of the region. A longitudinal study of 269 European regions over the period 1996-2012 was organized using data from REGPAT and Eurostat databases. Results show that technological relatedness affects positively both the intensity and relevance of the technological progress of European regions and that the other components of the knowledge space show a different impact on the two features of the technological progress. Finally, implications for EU policies supporting and stimulating regional technological progress are discussed.