The regional innovation system of Baden-Württemberg : lock-in or breakthrough?

Abstract

In 1995, the Centre of Technology Assessment in Stuttgart, Germany, presented a paper on the innovation system of its home region, the state of Baden-Württemberg in southwest Germany. The paper predicted a dire economic future for Baden-Württemberg – which, up to that point, had been regarded as an economic success story and a model region. Close to ten years later, we are able to look again at the economic and political situation of the region and can compare the analysis of the mid-1990s with current conditions. The central thesis of the mid-nineties’ paper was that Baden-Württemberg was affected by a process of path dependent development which, although very successful in the past, would lead the region’s economy into a potential dead end street. A break away from the established paths of economic development was needed to guarantee future sustainable economic growth. Now (in 2003) we should be able to ask ourselves whether this analysis was correct. Has Baden-Württemberg in fact lost its leading position due to its concentration on established strengths or have significant changes taken place that altered the contours of the Baden-Württemberg model and made it more adaptive to changes in the world economy? Additionally, what role did regional policy play in this context? At first glance, Baden-Württemberg seems to be on the winning side again. In 1995 (especially with the most difficult year of 1993 in full view) all major economic indicators looked depressing. The performance of Baden-Württemberg was below the German average. In 2003, Baden-Württemberg is – in spite of a new economic crisis - along with neighboring Bavaria the economically most successful region within Germany. To understand, whether the case of Baden-Württemberg is an example of the rise of new approaches, a (successful) continuation of old practices, or a restructuring of these old practices, we do not seek simply to rekindle debate about whether regional policy can fundamentally change regional development paths, but to go beyond this by questioning and hopefully advancing underlying conceptual frameworks. In this chapter, we will first introduce the concept of path dependency, briefly review the main characteristics of the regional innovation system of Baden-Württemberg, outline the lock-ins that have been identified in the mid-nineties, look to what extent these lock-in effects have in fact been roadblocks for further developments and whether they have been removed. The main thesis of this chapter is that Baden-Württemberg’s success in the last years is the result of its staying “on–course.” The region has demonstrated its ability to introduce incremental reforms that combine old with new structural elements. This has been accomplished with the aid of crucial actors in the economic and political sectors who helped to change the guiding model of how to do things and who can be called “norm entrepreneurs.”