Regional Dynamics of Innovation in Europe 2000-2020 – A Tale of Convergence, Persistence, and the Illusion of Catch-Up

In this new paper, Korneliusz Pylak, Michael Wyrwich, and I examine the dynamics of regional innovation activity in Europe from 2000 to 2020 using patent applications. We argue that standard convergence measures of regional patenting in Europe suggest a wrong picture of regional disparities. While these metrics indicate that regional disparities of patenting in Europe are narrowing, our analysis reveals that there are two persistent ‘clubs’: the ‘lagging’ and the ‘advanced’ regions. Despite two decades of growth, the differences between these groups remain largely unchanged. The disparity between the two clubs still accounts for a great deal of the total variation in regional patenting. These patterns suggest a convergence illusion that is overlooked in the current scholarly debate.

https://oweb.b67.uni-jena.de/Papers/jerp2023/wp_2026_011.pdf

Regionale Innovationsdynamik in Europa 2000–2020 – Eine Geschichte von Konvergenz, Beständigkeit und der Illusion des Aufholprozesses

In dieser neuen Studie untersuchen Korneliusz Pylak, Michael Wyrwich und ich anhand von Patentanmeldungen die Dynamik der regionalen Innovationsaktivität in Europa im Zeitraum von 2000 bis 2020. Wir argumentieren, dass gängige Konvergenzmaße für die regionale Patentierung in Europa ein falsches Bild der regionalen Ungleichheiten vermitteln. Während diese Kennzahlen darauf hindeuten, dass sich die regionalen Unterschiede bei der Patentierung in Europa verringern, zeigt unsere Analyse, dass es zwei beständige „Gruppen“ gibt: die „rückständigen“ und die „fortgeschrittenen“ Regionen. Trotz zwei Jahrzehnten des Wachstums bleiben die Unterschiede zwischen diesen Gruppen weitgehend unverändert. Die Diskrepanz zwischen den beiden Gruppen macht nach wie vor einen Großteil der gesamten Variation bei der regionalen Patentierung aus. Diese Muster deuten auf eine Konvergenz-Illusion hin, die in der aktuellen wissenschaftlichen Debatte übersehen wird.

https://oweb.b67.uni-jena.de/Papers/jerp2023/wp_2026_011.pdf

In this new paper, Michael Wyrwich and I examine the relationship between historical levels of self-employment and economic performance in different regions of Germany over a period of more than a century, from 1895 to 2020. A particular distinction is made between West Germany and the eastern part of the country, that came after WWII for forty years under socialist regime.

In West Germany, high and increasing levels of self-employment are significantly associated with high current levels of Gross Domestic Product (GDP) per population, despite several major historical shocks. That such a relationship cannot be found in East Germany could be a legacy of the socialist period where the government performed anti-entrepreneurial policies. We also find a positive relationship between historical self-employment and patenting in both parts of the country. This relationship is, however, somewhat weaker in East Germany, which experienced considerably more historical shocks than West Germany.

Overall, our results demonstrate that self-employment in the sense of ‘everyday entrepreneurship’ is positively related to long-term regional prosperity. This clearly shows that self-employment in general, not just young businesses and start-ups, can play an important role in regional development.

https://oweb.b67.uni-jena.de/Papers/jerp2023/wp_2026_010.pdf

According to the new ranking of researchers in the field ‚business and management‘ by research.com, I am no. 9 in Germany and no. 253 worldwide. Here is the link to the details https://research.com/scientists-rankings/business-and-management. Not bad 🙂

In dem neuen Ranking von Wissenschaftlern auf dem Gebiet ‚Business and Management‘ von research.com habe ich Platz 9 in Deutschland und Platz 253 weltweit. Zu Details siehe https://research.com/scientists-rankings/business-and-management. Nicht schlecht 🙂

In a new publication in the Journal of Economic Geography, Michael Wyrwich and I investigate three mechanisms by which regional entrepreneurship is transferred ove time. over time. (1) Entrepreneurial role models, (2) size of entrepreneurial households, and (3) economic success of entrepreneurs. We hypothesize that having many entrepreneurial role models and a large size of entrepreneurial households in the past provide greater opportunities for intergenerational transfer of entrepreneurial values, and hence lead to more regional entrepreneurship in later periods. Past economic success of entrepreneurs may fuel these effects and contribute to a positive collective memory of entrepreneurship. German regional data spanning nearly 100 years supports the significance of all three mechanisms.

Michael Wyrwich & Michael Fritsch; What are transfer mechanisms of regional entrepreneurship over time? The impact of historical role models and their economic success. Journal of Economic Geography, 2026. https://doi.org/10.1093/jeg/lbag009

I am delighted to announce that my paper, ‚Struggling with Entrepreneurial Ecosystems‘, has just been published online in the Journal of Technology Transfer. You can access it at https://doi.org/10.1007/s10961-025-10280-0  

In this article, I discuss the notion of entrepreneurial ecosystems and propose directions for further developing the concept. As a result of this discussion, I formulate four conceptual requirements.

First, as the primary objective of this approach is to explain and promote regional development, it is essential to implement a metric that quantifies the impact of entrepreneurial activity on regional performance.

Second, an analysis of the role of entrepreneurship in regional development should consider the full spectrum of entrepreneurship in a region, including firms that may not appear promising in their earl stages.

Third, the analysis should not only consider start-ups, but also the innovation and entrepreneurial activity of older firms, as they are a key part of the regional context.

Fourth, Entrepreneurial Ecosystems should be considered part of the regional innovation system, given the close link between entrepreneurship and innovation.

The key challenge in developing a valid EE theory that could provide appropriate policy guidance is to explore the main causal relationships. A useful EE theory should identify market or system failure configurations that make public intervention desirable.

In a new paper, Maria Greve, Michael Wyrwich, and I examine how the legacy of socialist regime in countries of Central and Eastern Europe affected innovation and R&D cooperation. Specifically, we are interested in how institutional framework conditions, both formal and informal, in Eastern Europe help explain this gap. These framework conditions are often cited as hindering innovation activity and are rooted in the communist legacy. We explore how much of the East-West gap can be attributed to these framework conditions, specifically institutional quality (i.e., quality of government) and interpersonal trust. Both factors are important for innovation, but they are clearly less favorable in Eastern Europe, mostly due to the communist legacy. To test the effect of communism on innovation, we analyzed patenting activities in European regions.

We find that the effect of the socialist legacy on innovation activity is largely mediated by the quality of the government and by interpersonal trust. At the same time, the socialist legacy negatively affects the trust and quality of government. Overall, about 70 percent of the impact of socialism on innovation activity can be attributed to these two mediators, particularly the quality of government. Since institutional quality and interpersonal trust also play an important role in cooperation, we analyzed the number of co-patents. The results resemble our findings for the overall level of innovation activity. Therefore, socialism also affected the mode of innovation, particularly collaborative efforts. Further analyses indicate that institutional quality and interpersonal trust are highly intertwined.

Altogether, our findings underscore the enduring power of history in shaping innovation and regional disparities. For policymakers, this research highlights the need for integrated strategies that address both formal and informal institutions to foster innovation in post-communist regions. For scholars, it opens new avenues for exploring the interplay between history, institutions, and innovation in other global contexts.

Fritsch, Michael, Maria Greve and Michael Wyrwich: The impact of socialist legacy on regional differences in innovation activities and cooperation in Europe: A mediation analysis. Research Papers #2025-010, Friedrich Schiller University Jena. https://oweb.b67.uni-jena.de/Papers/jerp2023/wp_2025_010.pdf

The description of the data base on industrial monuments in Germany that I collected together with Maria Greve, Matthias Huegel, and Michael Wyrwich.is now published in the Journal of Economics and Statistics. https://doi.org/10.1515/jbnst-2025-0015

What are the drivers of change in regional entrepreneurship performance over time? To what extent is the development of regional entrepreneurial activity in different national contexts driven by the same or similar factors? How important is the national context compared to regional factors?

In a new paper that was just published in Regional Studies Jon Potter, Haifeng Qian, Georgios Fotopoulos, and I provide a first systematic international comparison of long-term persistence and change of regional levels in self-employment and new business formation in the United States, England and Wales, and West Germany. Analyzing the factors associated with long-term changes in regional start-up performance over a 40-year period (1980-2020), we find that the three economies are highly comparable in the levels of path dependency in their regional start-up rate rankings. Most importantly, the factors related to long-term changes in regional start-up performance in the three economies are quite similar. We find that regional levels of human capital, foreign-born population and population density explain improvements of regional performance, while regional wages, population age structure, small firm presence, and regional industry structure are not important factors. We suggest policy implications and an agenda for further research. https://doi.org/10.1080/00343404.2025.2474033

Together with Maria Greve and Michael Wyrwich I contributed to a book that honours my good colleague David Storey who passed away in July 2023. In this article we describe and analyze the long-term development of self-employment in German regions between 1895 and 2019. Based on rankings (“league tables”) for the two years we identify those regions where the relative level of self-employment significantly increased (‘leapfroggers’), and those where the level of self-employment as compared to other regions deteriorated (‘plungers’). While there is some persistence of regional self-employment despite all the disruptive changes that Germany experience during the period of analysis, we also find and discuss considerable changes of regional levels of entrepreneurial activity.

The article is titled „David Storey on Regional Entrepreneurship: The Entrepreneurial League Table of German Regions 1895 and 2019“ and is published in George Saridakis and Jay Mitra (eds.): Entrepreneurship and Small Business: Collection of Research, Policy and Personal Insights in Honour of Contributions of David Storey. Cham 2025: Palgrave Macmillan.  https://doi.org/10.1007/978-3-031-72190-8_11

My paper together with Martin Obschonka, Fabian Wahl, Michael Wyrwich, Peter Jason Rentfrow, Jeff Potter and Samuel D. Gosling about the effects of Roman occupation aboiut 2 000 years ago on today’s population will be published in Current Research in Ecological and Social Psychology. The paper is titled „Roma Eterna? Roman Rule Explains Regional Well-Being Divides in Germany“ and is already available under https://doi.org/10.1016/j.cresp.2025.100214.

Abstract: In light of persisting regional inequalities in adaptive outcomes such as health and well-being, and related personality traits, psychological research has begun to embrace a historical perspective to understand the deeper roots of these regional patterns and the factors driving their persistence. Here we go one step further by directly examining the as-yet overlooked role of ancient cultures and the possibility that they had an enduring impact on the macro-psychological character of regions. Exploiting a massive civilization divide that ran through Germany around 2,000 years ago – the Roman Limes protection wall—we compare present-day German regions that were occupied and fundamentally advanced by Roman culture with German regions that remained part of the relatively undeveloped territory. Even when controlling for more recent historical influences and influential borders within Germany, we find evidence that the regions once developed by Roman civilization show more-adaptive personality patterns and related positive health and psychological well-being outcomes today than do other regions. Results from a spatial regression discontinuity design indicate a treatment effect of the Roman border on present-day regional variation in adaptive outcomes. Additional analyses suggest it was particularly the Roman investments in advanced economic institutions (e.g., trade infrastructure), with their long-reaching economic and macro-psychological path dependencies, that were instrumental in creating this long-term Roman effect. Together, the results illustrate how ancient cultures can imprint a macro-psychological legacy by setting in motion cumulative mechanisms that continue to contribute to present-day regional inequalities.

Anzahl der Industriedenkmale pro 1.000 Einwohner in Deutschland (Kreise) / Number of industrial monuments per 1,000 inhabitants in Germany (districts)

Maria Greve, Michael Wyrwich und ich haben erstmalig eine Datenbasis erstellt, die auf der Ebene von Kreisen die Anzahl der vorhandenen Industriedenkmale in den Bereichen Produktion, Versorgung und Verkehr sowie die Anzahl der Brücken und Aquädukte enthält. Der Datensatz ist frei verfügbar und kann beim Leibniz-Institut für Sozialwissenschaften (GESIS) unter https://doi.org/10.7802/2821 sowie auf diesen Seiten im Bereich „Material“ (https://m-fritsch.de/material/) im Excel-Format herunter geladen werden. Die Vorgehensweise bei der Erstellung dieser Datenbasis haben wir in einem Working Paper genauer beschrieben, das auch einige Übersichten enthält:

Michael Fritsch, Matthias Huegel, Maria Greve und Michael Wyrwich: Industrial Monuments in Germany: Data Basis and Overview of Regional Structures (German version: Industriedenkmale in Deutschland: Datengrundlage und Überblick über regionale Strukturen). Jena Economic Research Papers #2025-001, Friedrich-Schiller-Universität Jena. https://ideas.repec.org/p/jrp/jrpwrp/2025-0061.html  

Maria Greve, Michael Wyrwich and I have created a database for the first time that contains the number of existing industrial monuments in the areas of production, supply and transportation as well as the number of bridges and aqueducts at the district level. The dataset is freely available and can be downloaded in Excel format from the Leibniz Institute for the Social Sciences (GESIS) at https://doi.org/10.7802/2821 and on these pages in the “Material” section (https://m-fritsch.de/material/). We have described the procedure for creating this database in more detail in a working paper, which also contains several overviews:

Michael Fritsch, Matthias Huegel, Maria Greve and Michael Wyrwich: Industrial Monuments in Germany: Data Basis and Overview of Regional Structures (German version: Industriedenkmale in Deutschland: Datengrundlage und Überblick über regionale Strukturen). Jena Economic Research Papers #2025-001, Friedrich Schiller University Jena. https://ideas.repec.org/p/jrp/jrpwrp/2025-0061.html