Regional Economic Diversity: Action, Concept, or State of Confusion. The Journal of Regional Analysis and Policy

Abstract. Economic diversity has been promoted as a means to achieve the goals of stability and growth. However, the link between diver-sity, diversification and economic performance depends on the dif-ferences, both conceptually and empirically, between diversity and diversification. Unfortunately, the literature contains varying defini-tions of diversity and diversification. I propose two key points in de-fining diversity. First, it is a static concept. Second, it examines the size, the presence of multiple specializations, and the linkages pre-sent among industries within a region’s economy. A brief review of diversity measures is used to discuss measuring diversity relative to some standard, as an explanatory variable in examining growth and stability, and other issues. No one diversity measure is critique free; care should be taken when using a diversity measure as the only fac-tor in a policy designed to change the structure of a region’s econ-omy, given the goals of growth and stability