Economic Geography

Regional competitiveness as an evolutionary process
The ‘dynamic adaptive capability’ of regional economies is therefore of central
importance. By this is meant the capacity of a region’s firms, industries, and 
institutions to sense opportunities (market, technological, organizational), to
nurture, adapt and regenerate their knowledge assets and competences, and to
develop and enhance the organizational capabilities that translate that knowledge
into effective actions. This general notion applies to individual firms, to whole
industrial sectors, to social and public institutions, and to policy-making bodies
alike. It reflects the capacity of firms to experiment with and shift to new 
product-specific capabilities; for industrial sectors it has to do with the success
with which the firms in that sector are able to move into new markets, or
upgrade existing ones; it has to do with the capacity of local entrepreneurs to
identify and venture into new products and technologies; and it has to do with
the capacity of institutions of all kinds to be receptive to change and new oppor-
tunities. In short, the greater the dynamic adaptive capability of a region’s 
economy and socio-institutional base, the more likely it is to maintain or enhance
its relative competitive performance over time.
In other words, regional competitiveness should be seen as an evolutionary
process (Boschma 2004). Economic geographers have barely begun to explore
the full scope of ‘evolutionary economics’ (of which there are several different
variants, including neo-Schumpeterian, institutionalist, game-theoretic, and
complexity-theory based, for example), but it is clear that evolutionary econom-
ics contains several concepts, analogies and metaphors that bear directly on the
definition and explication of regional competitiveness. Evolutionary theory
forces us to think carefully about what economic competition means, the basic
economic units that evolve – such as firms, routines, institutions – and what the
mechanisms of regional structural, technological and institutional change are.
Essentially, economic evolution is about innovation and adaptation, and 
how these drive the direction and nature of structural change. Understanding 
the processes that determine patterns of innovation and adaptive structural
change across regions should therefore throw valuable light on why regions
differ in competitive advantage, and moreover, how and why patterns of regional
168
Ron Martin

---

competitive advantage shift and change over time. Economic geographers put