Regional Branching and Key Enabling Technologies: Evidence from European Patent Data

This article investigates the role of key enabling technologies (KETs) in regional branching. Taking into account the general purpose properties of these technologies, and referring to recombinant innovation theories, we argue that KETs knowledge could attenuate the effect that regional branching ascribes to technological relatedness, giving regions more scope for their technological diversification strategies. Furthermore, we claim that regions could benefit from this KETs effect, even if they are followers in their development, thanks to interregional spillovers from closer KETs leaders. Combining regional patent and economic data from a thirty-year panel (1980-2010) of twenty-six European countries, we actually find that KETs negatively moderate the role of technological relatedness for regional specialization in new technological fields, captured by a revealed technology advantage index. KETs knowledge also increases the number of new technological specializations. This positive effect more than compensates the previous negative moderation effect, so that the net impact of KETs on regional branching is positive. Supportive evidence is also found for KETs cross-regional spillovers. Overall, the results provide scientific support for the recent European Commission recommendation to plug KETs into the policy toolbox for smart specialization strategies inspired by regional branching.