Detecting New Industry Emergence Using Government Data: A New Analytic Approach to Regional Innovation Policy

21 Pages Posted: 19 Apr 2016

See all articles by Jason Potts

Jason Potts

RMIT University

Gerry Roe

Victorian Department of Economic Development

Brett Henderson

Victorian Department of Economic Development

Date Written: April 12, 2016

Abstract

This paper presents the rationale and method for a new model of innovation policy by regional government that is based on the early detection of the emergence of new industry clusters. The approach takes advantage of regional governments’ superior access to distributed information about the categories of activities and investments that individual firms are making. By coding and analyzing this information we show how the nascent seeds of new industries can be detected in clusters of overlapping activities. Surprisingly, these patterns may be opaque to the firms themselves because other firms exploring similar opportunities may not be co-located or even in the same industry. We propose that this method of early detection can be leveraged into opportunities for ‘industrial incubation’ in the form of institutional support.

Keywords: Economic evolution, industrial dynamics, new industries

JEL Classification: L52, L60, O3

Suggested Citation

Potts, Jason and Roe, Gerry and Henderson, Brett, Detecting New Industry Emergence Using Government Data: A New Analytic Approach to Regional Innovation Policy (April 12, 2016). Available at SSRN: https://ssrn.com/abstract=2763978 or http://dx.doi.org/10.2139/ssrn.2763978

Jason Potts (Contact Author)

RMIT University ( email )

Gerry Roe

Victorian Department of Economic Development ( email )

Brett Henderson

Victorian Department of Economic Development

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