Going beyond Relatedness: Regional Diversification Trajectories and Key Enabling Technologies (KETs) in Italian Regions

We propose a new approach to regional diversification that, going beyond relatedness, investigates regions’ capacity to move along different diversification trajectories. By integrating evolutionary economic geography and transition studies, we focus on the patterns of regional diversification that emerge by retaining its place and path dependence and argue that local endowment of Key Enabling Technologies (KETs) has a role in their sequential unfolding for escaping lock-in situations. Combining patent and employment data for Italian NUTS-3 regions, we run a series of ordered logit models and find that regions with more KETs knowledge are actually better able to engage in unrelated diversification trajectories but only when KETs are used by other local technologies.