Carolin Ioramashvili (p), Maria Savona

Sidharth Rony

The UK suffers from weak productivity growth overall as well as wide disparities in productivity between regions. Related variety arguments and growth-complexity evidence suggest that the underpinnings of regional productivity growth processes can be revealed by observing the patterns of incremental changes made to a region’s existing capabilities, yet little is known about the contribution of labour market dynamism and regional labour mobility to the evolution of regional economies. This paper studies knowledge diffusion through the lense of labour mobility. Movement of employees between regions has the potential to result in knowledge diffusion between regions, especially of non-codifiable, tacit knowledge. We estimate the effect of labour mobility between regions on changes in industrial structures and productivity gaps between regions.

Alexandra Badort, Bernardo Caldarola, Tommaso Ciarli, Sidharth Rony (p)

Pei-yu Yuan

This paper studies the relation between in-demand skills portfolios and productivity growth across UK and EU regions, using data from over 200 million Lightcast Online Job Advertisements (2014–2020) mapped to the ESCO framework.
First, we identify emerging skills in region-industry pairs at granular levels (NUTS3 and NACE-4), revealing long-term trends, particularly in service industries affected by digital technology adoption. Second, we construct a bipartite network connecting industries to skills, using a Bipartite Weighted Configuration Model to validate links. From the network, we derive indices quantifying the coherence, diversity, and complexity of regional skills portfolios, measuring skill sophistication using methods from the economic complexity literature. Third, we study the relation between skill sophistication and labour productivity using data from ARDECO.
Our findings provide evidence on the critical role of complex skills, which may be related to the adoption of increasingly complex technologies, in driving regional productivity. We distinguish among industries requiring diverse skills. We also distinguish the role of skills required to adopt more general-purpose technologies, such as IT and digital skills portfolios.

Pei-yu Yuan (p), Raquel Ortega- Argilés (p)

Raquel Ortega-Argiles

Knowledge diffusion is fundamental to innovation, enabling actors to exchange ideas, build on research strengths, and develop new technological capabilities. However, the efficiency of knowledge exchange depends on network structure—whether it is well-connected, fragmented, or overly reliant on redundant ties. Understanding these characteristics is critical as they shape knowledge flow and overall network performance.

This study examines knowledge network connectivity using government-funded project collaboration data, with a focus on the Agri-Tech sector. The UK government has made sustained investments in Agri-Tech, from the 2013 Agri-Tech Strategy to the 2018 Industrial Strategy, which allocated £90 million to transforming food production. Despite extensive research on collaboration networks, the circulation of knowledge within them remains underexplored. By assessing network determinants, we aim to determine whether Agri-Tech knowledge networks contain sufficient, excessive, or insufficient structural bridges for effective knowledge diffusion.

Using the Gateway to Research (GtR) database, we apply an LLM-based classification to identify relevant projects through project descriptions and keywords, validated by domain experts and policy documents. Data City’s keyword library is integrated to enhance classification accuracy. Firms within the Agri-Tech sector are flagged, and their involvement in projects is analyzed. A collaboration network is then constructed, where nodes represent participating organizations and edges denote project-based collaborations.

This study develops a framework for knowledge network identification, leveraging co-publications, co-patents, and citation flows. Applying network science and percolation analysis, we examine:

Network structure: Is the network fragmented or well-connected?
Bridging sufficiency: Are there enough structural bridges for interregional diffusion?
Redundancy and inefficiency: Do some connections fail to enhance diffusion?
Potential bridges: Which new interregional links could improve knowledge flow?
Using betweenness centrality, structural hole analysis, percolation threshold testing, and weighted link analysis, we identify critical, redundant, and missing bridges. Additionally, we explore how related variety—the presence of complementary knowledge domains—affects diffusion dynamics. By simulating the impact of new and removed bridges, we offer policy insights to enhance network efficiency and interregional knowledge exchange.

This study advances research on knowledge networks and spatial diffusion, providing policymakers with strategies to strengthen collaboration, ensure resilient knowledge diffusion pathways, and foster innovation.

Pei-Yu Yuan, Raquel Ortega-Argiles (p), Gloria Cicerone

Carolin Ioramashvili

Public funding schemes for research and innovation (R&I) and collaboration in R&D have been found to be crucial for promoting regional development. However, translating R&D into regional development is a complex process, as it involves more than just a linear connection between business R&D, public support for R&D, and regional development in the UK. Our analysis builds upon recent research by Ortega-Argiles and Yuan (2022) to investigate the various pathways involved in the R&D-regional development process, with a focus on the role of innovation activity and technological relatedness as pathways for performance. Our analysis adds to the current agenda on regional inequalities (UK Levelling Agenda) in the UK, which intends to make more balanced the redistribution of R&D public funded supporting schemes outside the GSE (Greater South East) extended capital region, with the aim to rebalance the UK economy by more evenly distributing the potential positive returns from R&D, innovation, and technology across the country.
Drawing on the CDM framework (Crepon, Duguet, and Mairesse, 1998) and its adaptations, we analyse the UK Research and Innovation (UKRI) funded projects repository between 2004 and 2019 to demonstrate how public funding can promote regional development in the UK considering private R&D (Business Enterprise R&D from Eurostat) and innovation (patenting activity).
Our findings reveal that approximately 80% of the funding recipients are from the private sector, and they are the primary lead organization in multiparticipant projects. London and the South East of England, apart from being the top recipients, have seen a continuous increase of UKRI projects over time at the expense of other regions.