The technology shift thesis : Understanding long term growth and transformation in a regional system

The technology shift thesisUnderstanding long term growth and transformation in a regional systemAbstractIn this paper we examines the long run economic growth and productivity performance of regions and how this relates to different phases of structural change and economic adaptability in different part of a national regional system.Firstly, we suggest a theoretical ‘systemic’ approach for analyzing long term regional economic growth and transformation. Special emphasis is given to radical technology shifts and their effect in time and space, such as lead-lag relations between industries and regions leading to divergence and convergence in regional growth as consequences of technological change, market integration and economic growth. We hypothesis that technology shifts in combination with industry structure and the existing hierarchy of regions will put strong restriction on what can be achieved in terms of transformation and growth for single regions in specific time periods but also on how interdependency in a regional system evolves over time. Secondly, in the empirical work, based on detailed analysis of the Swedish regional system 1985-2008, we show that the technology shift have targeted various part of the regional system at different points of time setting the overall average agenda for structural change, productivity development and growth for different levels of the regional system. Further on we have found that regions belonging to different level of the hierarchy tend to follow different “growth corridors” giving the basic precondition for regions to take advantage or not of the impact from the technology shift. Finally we have identified outliers and unexpected idiosyncratic regional growth trajectories calling for further in-depth research