The role of networks and relatedness in the birth of new industries. In search of incomplete innovative arrangements

This research aims to verify the necessity of seeking distant skills and capabilities in other regions in the emergence of a new industry in specific areas. We are examining ‘incomplete innovative arrangements’, where there are missing or insufficient elements within a territory that support innovation. The study analyses the emergence of new industrial specialisations, highlighting the significance of seeking capabilities from external regions, focusing on Italy from 2006 to 2014. We use patenting activities to investigate networks among provinces, retrieving data from the European Patent Office PATSTAT database. We identify a new specialisation in a province if there was no previous specialisation in that specific industry in the province. The creation of a patent in collaboration with another region indicates an external connection and the acquisition of external knowledge, contributing to developing innovations and the new industrial field. The empirical analysis visualises scatterplots investigating relationships among the variables and then applies machine learning techniques. The results underline the key role of networks and openness in developing a new industry. The proposed methodology helps identify incomplete innovative arrangements in territorial innovation systems, where the need for new knowledge and capabilities is addressed through external ties to other regions.