Mapping regional strengths in a key enabling technology: the distribution of Internet of Things competences across European regions

The Internet of Things (IoT) can trigger innovation processes across all sectors of the economy. However, this potential is not available to all regions. As with other enabling technologies, the competences required to develop IoT solutions are numerous and var-ied, ranging from hardware to software and related services, and are often provided by different companies. To map the application potential of these technologies across Eu-ropean regions, we use textual analysis applied to the description of companies’ activi-ties, which in turn allows us to identify the NACE codes associated with five main IoT domains. We identify clusters of regions characterised by different mixes of compe-tences in IoT technologies, and we discern three groups of regions – regions with spe-cialised IoT competences in software, data processing and telecommunications, regions with specialised IoT competences in hardware manufacturing, and regions with cross-layer IoT competences. Regions with cross layer IoT competences are highly concen-trated in the North-West of Europe and have a significant presence in either urban re-gions, often centred in the capital cities and their metropolitan areas, or in very-high income manufacturing regions. Regions specialised in hardware manufacturing coin-cide with the more established manufacturing regions in Germany, Italy and France. Regions specialised in software, data processing and telecommunications tend to be urban, medium-high income regions in North-West Europe. We discuss the policy im-plications of our findings at both European and regional levels