Pathways to diversification

Abstract

A fundamental research question in regional economic development, is why some regions are able to diversify into new products and industries, while others continue to face challenges in diversification? This doctorate research explores the different pathways to diversification. It follows the three-stage modular structure of DBA for Cranfield School of Management. This thesis consists of a systematic literature review, a single qualitative case study on UAE, and a research synthesis of published cases on Singapore, Norway and UAE. The linking document provides a summary of the three projects and consolidates findings and contributions into a path creation model that provides new understanding on the pathways to regional diversifications. This research integrates existing theoretical foundations of evolutionary economic geography, institutional economic geography, path dependence, industry relatedness, economic complexity, and path creation into a unified conceptual path creation model. It generates propositions, builds a framework and develops a matrix for path creation that integrate context, actors, factors, mechanisms and outcomes shaping regional diversification. It finds that in the context of path dependence and existing conditions of a region, economic actors undertake strategic measures to influence the institutional capabilities to accumulate knowledge and trigger indigenous creation, anchoring, branching, and clustering diversification mechanisms to create complex varieties of related and unrelated diversification outcomes. The institutional collaboration capabilities are found to be instrumental in accumulating knowledge and determining the relatedness and complexity of diversification outcomes. This research further provides a set of integrated platform strategies to guide policy-makers on setting up the pathways to regional diversification.