The multiple roles of demand in new regional industrial path development: A conceptual analysis

This paper contributes to the literature on new regional industrial path development by highlighting the multiple roles that demand can play in regional development. We develop a conceptual framework relating different roles of demand to different types of new path development. Based on the literature on regional development, we differentiate between the role of demand as anonymous consumer, sophisticated buyer, active co-developer, public procurer and norm and value setter. These roles influence different types of new path development, including path extension, path upgrading, path importation, path diversification and path creation. New path development can be triggered by changing norms and values in the society (e.g. environmental concerns and the growing demand for cleaner technologies), public procurement for innovation (governments demand new products or services and thereby steer economic development) or by users modifying existing products or developing novel solutions that are not yet on the market (e.g. user innovations). The various roles of demand, as well as its effect on new regional industrial path development, depend on the geographical context. We argue that taking a nuanced view towards demand will add a novel dimension to the debate on new path development in regions.