Patrizia Casadei (p), Riccardo Crescenzi, Simona Iammarino

James W. Scott

The twin transition – driven by growing emphasis on digitalisation and environmental sustainability – is closely associated with Global Value Chains (GVCs) and has the potential to influence their reconfiguration. At the same time, recent shocks, including the COVID-19 pandemic, geopolitical tensions, and conflicts, have caused major disruptions across production networks at global, continental, and local levels. These concurrent challenges underscore the need to understand how GVCs are adapting to both structural transitions and external disruptions. To address this gap, this study examines the textile and apparel (T&A) industry, a key sector where a highly globalised and fragmented value chain, growing digitalisation, and increasing sustainability pressures make it a crucial case for analysing the twin transition in times of uncertainty and their implications for global value chains. The research adopts a multi-method approach, beginning with a systematic literature review of global GVC research on T&A, with a particular focus on green and digital transitions. It then explores the configuration, structure, and geography of the selected GVC by analysing FDI flows across EU (and UK) regions. A case study on the T&A sector in Tuscany – one of the world’s leading industry hubs which is now experiencing an unprecedented economic crisis – was conducted, incorporating a survey to assess firms’ positioning within GVCs and the types and extent of green and digital strategies. To gain deeper insights, multiple in-depth semi-structured interviews with selected firms were conducted in collaboration with industry associations, investigating firms' motivations for green and digital upgrades, the role of regional support, and the impact of recent external shocks on GVC configurations and green and digital investment capacity. Finally, these interviews were supplemented by discussions with key industry stakeholders and representatives, offering a broader perspective on the challenges and opportunities presented by the twin transition in GVCs and the sector’s ability to survive and remain competitive in the evolving landscape.

James W. Scott (p)

Alexandra Sotiriou

The core assumption informing this paper is that given the EU’s territorial and social cohesion crisis, policy design and delivery need to be better informed by the experiences of persistently underperforming places and systematically marginalized social groups. As part of the Horizon project ESSPIN our work has involved the in-depth analysis of various case studies of policy interventions of national and regional governments and their interactions with local institutions in the provision of public services. We have asked the question: why do measures targeted at correcting market failures and socially unacceptable distributions of income and wealth often fail and how might such measures be repurposed in order to enhance effectiveness? The approach taken in our analysis is place-based in the sense of an “inverted” view on policy as reflected in local translation and perceptions of EU-level and national policies. Results of our analysis reveal a number of salient factors that underscore the role of institutional proximity to local citizens, the role of multilevel partnership and flexible but long-term perspectives.

Alexandra Sotiriou (p), George Petrakos, Stavroula Alexiou

Ann-Marie Sommerfeld

The paper investigates the unevenness in EU trade integration patterns and the resulting growth asymmetries at the regional level. With the use of panel econometric models at the NUTS II level based on a novel trade dataset, the analysis estimates the impact of trade integration on regional growth and the heterogeneous effects of different types of trade partners on peripheral regions. The results suggest that the impact of integration is asymmetric for peripheral regions trading with core EU trade partners, revealing that different development levels are associated with different types of integration and unequal growth returns.

Ann-Marie Sommerfeld (p), Michael Fritsch, Michael Wyrwich

Rinaldo Brau

We examine the dynamics of regional innovation activity within Europe in the early 21st century. Patent data show that regions in Eastern and Southern Europe lag far behind their Western European counterparts. This gap is closing very slowly over time. Such a slow convergence in innovation activity may be largely rooted in the socialist legacy and the sudden transformation of political and economic systems that occurred after the demise of socialism. However, such explanations do not hold for other lagging regions, particularly those in Southern Europe. Employing a rather novel approach, we use ranks of regions within Europe and analyze changes in ranks. This allows us to investigate regions that have risen strongly in the past 20 years (‘leapfroggers’). Rural regions with low population density and an under-established manufacturing sector seem to contribute to the persistence of low levels of innovation activity.

Silvia Balia, Rinaldo Brau (p)

Italy's Debt Rescheduling Plans (DRPs) aimed to reduce healthcare deficits but raised concerns about unintended effects on resource availability and service quality. This study finds a persistent increase in municipal mortality, stabilizing around 3% from the fourth year post-DRP. The disproportionate reduction in nearby hospital beds and doctors, particularly in less central areas, is identified as a key mechanism. These findings suggest severe trade-offs between efficiency and prompt healthcare access due to service centralization.