From Engines to Algorithms? Regional Innovation and Implementation of Automated Driving Technologies in Germany

Lennart Schott and Kerstin J. Schaefer

Growth and Change, 2025, vol. 56, issue 4

Abstract: Automated driving (AD) technologies are transforming the automotive industry, challenging incumbent actors and regional economic structures. Using an evolutionary framework, this study investigates how regional technological capabilities affect the innovation and implementation of AD technologies in Germany. By integrating both patent data and online job advertisements, our study extends previous research and makes a novel contribution by capturing not only where innovations are developed but also where they are being implemented, providing a more comprehensive perspective on path development. We show that German regions with strong capabilities in both conventional automotive technologies and ICT are significantly more likely to innovate in and implement AD technologies than regions specialized in either domain alone. This finding highlights the critical role of combining traditional automotive expertise with advanced digital capabilities in fostering innovation and implementation in this emerging field. Automotive regions without concurrent ICT specialization may struggle to adapt to this technological shift, limiting their capacity for successful path renewal. Our study underscores the need for policy interventions to support these regions, including fostering cross‐industry collaboration and implementing targeted upskilling programs to mitigate economic disparities and enhance competitiveness in the face of technological disruption.

Date: 2025
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