The comparative political economy of the green transition: economic specializations and skills regimes in Europe

Luca Cigna, Donato Di Carlo and Niccolò Durazzi

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: The green transition is fundamentally transforming contemporary economies and societies. This article investigates how European models of capitalism perform and specialize across the green value chain—conceptualized as innovation, manufacturing, services, and deployment—and how national skill formation systems underpin these specializations. Integrating insights from comparative capitalism literatures with descriptive statistics and principal component analysis (PCA), we develop and test expectations about growth regime‐specific patterns of green specialization and skill profiles. Our findings reveal marked cross‐national variation between green leaders and laggards: Nordic economies characterized by dynamic services and continental manufacturing‐based models are frontrunners in the green transition, while Eastern Europe's FDI‐led regimes and Southern Europe's demand‐led regimes emerge as laggards. Furthermore, PCA results uncover two distinct decarbonization pathways among European green leaders: one group of countries (Austria, Finland, Germany) specializes in green manufacturing, supported by high shares of STEM graduates; another (Denmark, Switzerland, and to a lesser extent Norway and Sweden) focuses on green innovation and dynamic services, sustained by a strong supply of STEM doctorates. This article contributes to political economy debates on the green transition by identifying distinct green specializations and decarbonization pathways across European models of capitalism and by underscoring the growing centrality of high‐level STEM skills in the green transition.

Keywords: growth regimes; skill formation; global value chains; green transition; comparative political economy (search for similar items in EconPapers)
JEL-codes: J24 O52 Q58 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2025-09-23
New Economics Papers: this item is included in nep-eec, nep-ene, nep-hme, nep-pke and nep-tid
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Published in Regulation and Governance, 23, September, 2025. ISSN: 1748-5983

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