Digital skills, relatedness and green diversification: A study of European regions
This paper explores the link between digital literacy and green regional diversification. Santoalha, Consoli, and Castellacci find that a workforce's skills in using and developing ICT technologies can be an important determinant for a region's ability to diversify into new green technologies. The findings have policy implications for regional transitions towards greener and smarter economies.
As previous research has shown, when a region diversifies, it tends to attract and develop activities with a strong technological relatedness to existing industries in the region. The paper argues that not only relatedness but also local endowment of capabilities is important for the development of new regional specialisations.
Using econometric analysis on a panel of 142 regions in 22 European countries, the authors show that the digital capabilities of the local workforce are a positive predictor of a regions’ ability to specialise in new technological domains. This effect is stronger for green specialisations.
The findings have implications for the twin challenge of fostering both green and digital transformation. In particular, policies aiming to promote green specialisation in a region should also focus on creating and reinforcing digital competencies in the workforce.
You can find the full paper here.