What might 'problem-oriented' regional industrial policies look like?

In a recent post I described a newly-published paper (in Regional Studies) in which Elvira Uyarra and I explored how public actors and 'place-based' leaders, as the custodians of place-specific assets and problems, can act as potential 'lead users' for applications of new and emerging technologies and as orchestrators of demand, in order to attract and retain external knowledge and capabilities and to make a new industrial path more feasible. That paper used as an illustration the?Civil UAVs Initiative in Galicia (Spain). In that post I mentioned a forthcoming paper, written with?Iris Wanzenb?ck?of Utrecht University, that would go on to offer a framework of possible policy interventions. That second paper has now been published online (50 free copies at this link), and so here's a short follow-up post to introduce it.

As described in the previous post, the need to identify new sources of regional industrial growth is recognised as a pressing policy issue - but most recent thinking has focused on regional technological capabilities, overlooking other avenues for diversification on the demand side. Meanwhile the new 'mission-oriented' innovation policy discourse tends to take the existence, geography and political economy of missions and problems somewhat for granted.

But problems, markets, and demand are not ‘just there’ but rather are constructed, organized socio-technical mechanisms. In the new paper, we draw on ideas from policy sciences, the sociology of markets and valuation studies to explore the roles of place, agency, networks and institutions in processes of problem-framing, valuation and market creation.

How problems are framed determines their boundaries and complexity and builds expectations about what legitimate solutions might look like. They influence both the questions we ask and shape the answers we get in public policy. They also broaden or limit the range of actors, networks and regional assets to be mobilized to create new opportunities and to meet future societal needs.

There may be trade-offs between narrower, more place-specific problem framings and broader ones that leave more space to innovate and to shape markets - but which may disempower some local actors and views. Broadening the geographical scale of the problem, for instance by mobilizing translocal networks such as global city networks, may help ‘bridge scales’, widen the scope of a market and up-scale potential solutions to new places or fields of application. However, rescaling of problem-framings may also affect local institutions, network configurations and power relations, privileging certain interests (e.g., of large multinationals) while disempowering others.

The practices through which value is attached to potential solutions (that is how problems turn into needs and finally demand) also have a spatial dimension and are similarly subject to tensions and trade-offs (e.g. about the extent of standardisation or customisation required).

These trade-offs are reflected in choices that are being made every day in mundane processes of public administration, and in public-private and private-private interactions. More attention to these choices illuminates opportunities for targeted policy action to align problem-based visions, expectations and innovation efforts for regional industrial development, presenting new entry points to regional innovation and industrial policy thinking.

In the paper we identify a range of trade-offs and scale/spatial issues in demand formation and market creation that suggest new possibilities for innovation and industrial policy interventions in regions, as shown in the figure below.

Thinking more carefully about local problems, demand and markets can shed new light on the uses of traditional regional policy instruments around cluster or system-building, networking or experimentation, and around demand-side tools such as public procurement, along with all those mundane processes which can help to shape and manage markets.

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Kieron Flanagan, Elvira Uyarra & Iris Wanzenb?ck?(2022)?Towards a problem-oriented regional industrial policy: possibilities for public intervention in framing, valuation and market formation,?Regional Studies, DOI:?10.1080/00343404.2021.2016680