The Micro-foundations of Regional Branching—the Case of Digitization of Publishing

Abstract

Theorizing within evolutionary economic geography (EEG) on regional branching of industries has so far been depicted as evolving through routine replication among different economic actors that hold various degrees of relatedness. Methodologically related and unrelated variety has been studied quantitatively, treating relatedness between economic agents as pre-defined industrial classifications. This represents a need for a complementary qualitative and in-depth understanding of how knowledge is re-combined in various settings (Boschma and Iammarino 2009). Based on a qualitative case study in the publishing industry, whose technological platforms and business models are currently facing severe challenges associated with digitization, this paper seeks to improve our understanding of how knowledge is re-combined and re-applied in various ways. The paper explores and discusses how this industry branches over into new activities, and reflects upon the channels through which these processes unfold. How is the old and the new in the economy bridged? How is the relationship between specialization and diversification played out? In this sense the paper seeks to contribute to improve our understanding of the epistemic micro-foundations for regional branching and economic development.

Who survives a recession? Specialization against diversification in the digital publishing industry

“…4. In the case of Norwegian newspapers, Bugge and Øiestad (2015) suggest that media firms are prone to explore a dynamic interplay between specialization and diversification; however, the available information does not facilitate an easy evaluation of the profitability of such strategies. With a broader analysis, Ferrier et al (1999) found that companies presenting a greater intensity and complexity of actions, for example through diversification, have a higher probability of surviving, however, the results are highly variable across industries.…”

“…2 At a more general level,Porter (1996) argues that managing new and old technologies together may lead to the degradation of the core business.3 Prior research suggests that in many industries, diversification is correlated with poorer performance(Montgomery, 1985;Montgomery and Wernerfelt, 1988;Montgomery, 1994). 4 In the case of Norwegian newspapers,Bugge and Øiestad (2014) suggest that media firms are prone to explore a dynamic interplay between specialization and diversification, however the available information does not facilitate an easy evaluation of the profitability of such…”

Barriers to Path Creation: The Case of Offshore Wind Power in Norway

“…However, the branching perspective has been contested. For example, Tanner (2014) argues that the mechanisms through which branching occurs are rather unclear, whereas Bugge and Øiestad (2014) question how different branching mechanisms result in knowledge transfer to new application domains, and how old and new knowledge sources are combined in this process. Binz, Truffer, and Coenen (2016) argue that the emphasis on territorially-specific generic resources (primarily technological knowledge) undermines the importance of translocal linkages and extralocal resource mobilization.…”

Advancing regional innovation systems: What does evolutionary economic geography bring to the policy table?

“…Implicitly, this view rests on an assumption that firms through their recruitment decisions and local networking behaviour are able to collectively identify and exploit the potential for growth and structural change associated with the resources that are available to them locally. This view ignores that the continuous exploration of novel – not-yet-identified – combinations of knowledge, new intersections between industries and the subsequent redefinitions of related and unrelated technologies that continuously occurs, is part and parcel of innovation and technological change itself (Bugge and Øiestad, 2015; Katila and Ahuja, 2002; Katila, 2002). Moreover, in contrast to RIS, it ignores the role and importance of institutions and policy in conditioning and mediating knowledge spillovers.…”