Charting new paths in regions and cities

David A. Wolfe

Chapter 7 in The Governance of Innovation Spaces, 2026, pp 148-168 from Edward Elgar Publishing

Abstract: This chapter draws on evolutionary economic geography to review how path dependence shapes developmental trajectories and how new industrial paths emerge in regional economies. The chapter uses the foundational concepts of path dependence, increasing returns, and lock-in to assess their explanatory value in explaining institutional change. The concept of path creation emphasizes the role of entrepreneurial agents who “mindfully deviate” from existing paths to forge new developmental trajectories. The chapter synthesizes recent contributions to the new industrial path development literature, identifying five principal variants: path branching (diversification into related industries), path modernization (intra-path transformation through new technologies), path importation (new paths arising from MNE inward investment or immigrant skills), path creation (emergence of genuinely new industries in novel locations), and path diversification (convergence of previously unrelated technological capabilities). It stresses the role of both firm-level and system-level agency in the emergence of new paths, with place leaders and civic entrepreneurs playing critical roles in articulating shared visions and mobilizing institutional resources to support emerging developmental trajectories. It illustrates these dynamics with two detailed cases: the emergence of Denmark's wind power industry through institutional entrepreneurship and path branching from existing agricultural machinery capabilities; and Ontario's connected and autonomous vehicle sector as an example of interpath diversification at the intersection of the automotive and ICT industries. The chapter reinforces the central argument that collaborative governance and civic capital are essential prerequisites for effective path development and institutional innovation.

Keywords: Path Dependence; Evolutionary Economic Geography; New Industrial Path Development; Path Creation; Regional Resilience; Institutional Entrepreneurship (search for similar items in EconPapers)
Date: 2026
ISBN: 9781035320783
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