Geoforum 111 (2020) 176–188

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Geoforum
journal homepage: www.elsevier.com/locate/geoforum

Agency and actors in regional industrial path development. A framework T

and longitudinal analysis
Suyash Jollya, , Markus Grillitschb, Teis Hansenb,c
⁎

a
Department of Human Geography, Lund University, Sweden
b
Department of Human Geography and CIRCLE, Lund University, Sweden
c
Department of Technology Management, SINTEF, Sweden

ARTICLE INFO ABSTRACT

Keywords: Despite significant interest in regional industrial restructuring in economic geography, surprisingly, scarce at-
Bio-economy tention has been paid to the changing role of agency over time. The current paper develops a framework for
Värmland understanding the role of multiple types of actors and the agency they exercise for regional industrial path
Agency development. The framework is employed in a longitudinal study of industry development in Värmland, Sweden,
Regional industrial path development
from forestry towards a bio-economy. The analysis highlights how actors exercise very different types of agency
Longitudinal
in different periods of regional industrial path development.

1. Introduction individual agents to institutional change and regional development.

Having said this, there is a burgeoning interest in the role of agency
The topic of structural changes in the economic composition of re- in regional structural change both in the quantitative and qualitative
gions is central in current debates in both academia and policymaking. traditions of economic geography. Recent quantitative papers make
Contributions on path development processes in different regional associations with the occurrence or appearance of certain types of firms
contexts have provided insights into how and where new regional paths and industrial diversification. For instance, Neffke et al. (2018) find
emerge, and the reasons for other regional paths not emerging (Martin, that unrelated diversification is mostly associated with new establish-
2010; Simmie, 2012). Similarly, policymaking is increasingly focused ments, especially if they have non-local roots. In a similar vein, Elekes
on understanding the opportunities for stimulating new regional paths, et al. (2019) find that foreign firms have a higher deviation from a
most prominently exemplified by the Smart Specialisation program of region’s average capability match than local firms and are thus a agents
the European Union (Foray et al., 2012; McCann and Ortega-Argilés, for structural change, in particular in more peripheral regions.
2015). In the qualitative tradition, recent papers zoom in on regional
Existing accounts have emphasised the idea that new industries in a change processes and how particular types of actors have affected such
region develop out of existing industries through a branching process processes. Such research provides complementary insights to the papers
(Boschma and Frenken, 2012) as well as through combinations of un- mentioned above. For instance, while on average incumbents are as-
related knowledge and resources (Grillitsch et al., 2018). The birth and sociated with reinforcing regional specializations; there are some that
development of new industries are often seen as occurring due to the incorporate disruptive innovations in their operations (Kumaraswamy
presence of dense regional networks and structures, a combination of et al., 2018; Zietsma et al., 2018). Other papers have focussed on how
different knowledge bases, vibrant entrepreneurial culture, and in- other types of actors affect regional change processes such as public
novative firms. However, despite this interest in preconditions and policy actors (Dawley, 2014; Miörner and Trippl, 2017), intermediaries
processes related to structural change, little is known about the micro- (Howells, 2006), or fringe actors (Fredin et al., 2018; Zietsma et al.,
level processes that drive industrial restructuring. As argued by 2017).
Boschma (2017; 358), “little to no attention has yet been paid to the role of If regional structural change, however, is understood as a process in
agency, and the different types of agents that may drive regional diversifi- which different types of actors are engaged in different ways over time,
cation.” Similarly, Uyarra et al. (2017) argue that there has been little and where the synergies or contradictions of such engagement matter,
theoretical and empirical work that connects the behaviour of studies focussing on a particular type of actor or agency have

⁎
Corresponding author.
E-mail addresses: [email protected] (S. Jolly), [email protected] (M. Grillitsch), [email protected] (T. Hansen).

https://doi.org/10.1016/j.geoforum.2020.02.013
Received 8 May 2019; Received in revised form 6 February 2020; Accepted 11 February 2020
Available online 27 February 2020
0016-7185/ © 2020 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY-NC-ND license
(http://creativecommons.org/licenses/BY-NC-ND/4.0/).
S. Jolly, et al. Geoforum 111 (2020) 176–188

limitations. Only very recently, there have been attempts to capture this development. Firstly, existing work has often attributed specific types
interplay more comprehensively both conceptually and empirically of agency to specific types of agents, e.g., attributing Schumpeterian
(Grillitsch and Sotarauta, 2019, Isaksen et al. 2019, Mackinnon et al. innovative entrepreneurship to firms (e.g., Neffke et al., 2018) or place-
2019). We contribute in the qualitative tradition to the efforts of based leadership to local governments (e.g., Hambleton and Howard,
comprehensively capturing the interplay about the ways different types 2013). The distinction between different types of agency and agents in
of actors shape regional industrial paths over time. our conceptual framework avoids such a priori assumptions and allows
In the current paper, we address this gap by developing a frame- for a more nuanced understanding of the relation between agency and
work for understanding the role of multiple types of agents and the agents in regional path development processes. This includes an ap-
agency they exercise for new path development. Following the preciation of the possibility for agents to exercise multiple types of
Dictionary of Human Geography, human agency stands for “the ability agency simultaneously, or for changes in the types of exercised agency
of people to act, usually regarded as emerging from consciously held inten- over time.
tions, and as resulting in observable effects in the human world ” (Gregory Secondly, the paper contributes by expanding the types of agency
et al. 2009; pp 347). We focus on agency in the context of green re- and agents considered in regional path development processes.
gional path development and pose the following main research question Regarding agency, previous work focuses on different types of change
for the paper: agency, while the role of structural maintenance agency is overlooked,
How does agency and the actors involved vary over time in the which is arguably unsatisfying for the understanding of regional in-
greening of industries in a regional context? dustrial change. Regarding agents, we include the role of fringe agents,
Empirically, we analyse path development processes in the Swedish e.g. outsiders with limited power and resources, which have tradi-
region of Värmland, specifically the transition towards a bioeconomy. A tionally been ignored in the literature on innovation systems and re-
strong specialisation in forestry-related industries characterises gional path development (e.g. Autio, 1998) even if they might influence
Värmland, traditionally focused around a number of large pulp and such processes in unforeseen and unexpected ways (Fredin et al., 2018).
paper mills. While the region has historically focused on traditional Finally, the paper also contributes with a thorough empirical ana-
pulp and paper products such as packaging materials, a broadening out lysis of agents and agency in regional path development, thereby re-
towards a wider bioeconomy, resulting in a larger variation in biobased sponding to recent calls for empirical work on agency in regional de-
products, has been evident in recent years (Grundel and Dahlström, velopment (e.g., Asheim et al., 2016; Uyarra et al., 2017). We address
2016; Henriksson, 2016). Thus, the ongoing structural transformation this call by a thorough investigation of how patterns of agency change
towards a bioeconomy in Värmland provides a suitable setting for over time in the transition towards a bioeconomy in Värmland, Sweden.
analysing how actors constrain and facilitate the greening of industries. The remainder of this paper is organised as follows. We start with an
Conceptually, we develop an analytical framework that integrates overview of the role of strategic agency in regional path development,
four different elements. Our point of departure is the literature on and subsequently, develop the theoretical framework of the study. The
preconditions for new industry development, which clarifies how re- next section discusses the research method used for the study. The
gional path development processes may take multiple forms, including fourth section presents the analysis of the role of agency in path de-
upgrading of existing industries, diversification into related industries, velopment processes in Region Värmland. Here we trace the develop-
and the emergence of technologically unrelated industries (Grillitsch ment from pulp and paper industry towards a broader bioeconomy in
et al., 2018; Hassink et al., 2019; Isaksen et al., 2018; Isaksen and three distinct temporal phases. Finally, the fifth section concludes the
Trippl, 2016). Green industry path development can take all of these paper by discussing and summarising the main theoretical contribution
forms (Grillitsch and Hansen, 2019), and require multiple types of of the study, policy implication, and scope for future research.
change agency. Thus, we draw on insights, which foregrounds how
actors construct and exploit opportunity spaces for regional develop- 2. Theoretical Framework
ment by identifying change strategies and demolishing, renewing, and
building new structures. In this, we focus on three types of change 2.1. Preconditions for new industry development
agency: Schumpeterian innovative entrepreneurship, institutional en-
trepreneurship, and place-based leadership (van Grunsven and In economic geography, a vast amount of literature investigates the
Hutchinson, 2016; Grillitsch and Sotarauta, 2019). While change question of how regional preconditions affect the future development of
agency is central to regional path development processes, there is also a industrial paths (Neffke et al., 2011). The question brings together the
need for attention to structural maintenance work that focuses on evolutionary idea of path-dependence and lock-in (Grabher 1993;
strengthening existing structures and specialisations. Thus, we com- Martin and Sunley, 2006) with the body of work on regional innovation
plement the focus on change agency with insights on structural main- systems (Asheim and Coenen, 2005; Tödtling and Trippl, 2005). One of
tenance agency, which may constrain the development of new in- the major contributions of the regional innovation systems literature
dustrial paths (Henderson, 2019). has been to connect theoretically certain types of regions with common
The final element in our analytical framework is to introduce a challenges and opportunities for innovation and new industrial path
distinction between agency and agents. While agency is fundamentally development. The most widely used typology rests on Tödtling and
concerned with actions or interventions to produce a desired effect, Trippl (2005) differentiating in peripheral, old-industrial, and me-
agents point to the actors that exercise agency. Recent work has drawn tropolitan regions. These regions are related to key innovation chal-
attention to the need for a broad conceptualisation of change agents in lenges related to organisational thinness, lock-in, and fragmentation,
new path development processes. Experienced practitioners and public respectively.
policy agents play central roles in transforming regional institutional In recent years, the focus shifted from innovation per se to new
arrangements (Miörner and Trippl, 2017; Isaksen and Jakobsen, 2017), industrial path development (Dawley et al. 2015; Isaksen and Trippl,
and the interplay between regional policy actors and private sector 2016; Grillitsch et al. 2018) as the driving force for regional structural
actors change between phases of regional development processes change and green industry development. New industrial path devel-
(Holmen and Fosse, 2017). Thus, employing a broad perspective on opment can take many forms (Martin and Sunley 2006). Grillitsch and
influential agents in new path development processes appears to be Asheim (2018) differentiate in upgrading, diversification, and emer-
particularly important to understand regional industrial restructuring gence. Upgrading refers to qualitative changes in existing industries.
in a long-term perspective. Diversification captures processes, “where knowledge and resources from
The empirical and conceptual approach allows us to make a number existing industries are used in new industries” (ibid, p. 1641). Emergence is
of related contributions concerning the role of agency in regional path about the development of new industries that are technologically

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unrelated to existing industries in the region. Schumpeterian innovative entrepreneurship as mindful deviations from
The question of structural change comes to the fore when previous existing paths and willful attempts to create new paths by seeking new
growth paths are exhausted, turning them into what has been referred opportunities. Second, institutional entrepreneurship, which involves
to in the literature as old industrial regions (Cooke, 1995, Tödtling and challenging existing institutional norms, raise legitimacy, and in-
Trippl, 2004, Hassink, 2010). Such processes typically unfold as a result stitutionalise alternative practices and norms. Third, place-based lea-
of the embedding of local industries in global production networks in dership is about coordinating and pooling efforts and resources for the
the course of industry life cycles (Klepper, 1997; Ter Wal and Boschma, stimulation of new regional development opportunities. Together these
2011). As industries and technologies mature, the source of competi- three types of transformative agency are presumed to play an important
tiveness shifts from innovation to cost. Standardised production typi- role in the emergence of new growth paths and are clearly distinguished
cally relocates to low-cost economies, and existing firms shift focus from other types of agency that are agnostic, resisting, or opposing
from product to process innovations, with the aim to reduce cost and change.
the consequence to reduce the workforce. The need for developing new Schumpeterian innovative entrepreneurship aims at path-breaking in-
economic activities becomes paramount. While industrial life cycles are novations and is a key driver for structural change (Shane and
an important cause for structural change, change is also advocated by Venkataraman, 2000; Feldman et al., 2005). Recent studies in economic
policy makers and in the public discourse in order to address global geography have discussed the role of innovative entrepreneurship in
warming (Schot and Steinmueller, 2018; Grillitsch et al., 2019a,b). regional industrial path development and diversification. Innovative
Accordingly, industrial path development should not take any direction entrepreneurship is about acting on perceived opportunities by com-
but lead to a greening of the economy (Grillitsch and Hansen, 2019). bining different knowledge bases, often from distinct institutional fields
Specialised regions, such as our case study region, have some dis- (Strambach and Klement, 2012) and creating new value-added activ-
tinct features such as a strong but usually rather homogeneous ities. Innovative entrepreneurs take risks to enter new terrain and
knowledge base, networks that are rather rigidly and hierarchically thereby support regional industrial renewal processes (Rypestøl, 2017;
organised in value chains, and institutions that are adapted to the field Neffke et al., 2018; Grillitsch, 2018). However, Schumpeterian in-
of specialisation – all of which contribute to negative lock-ins (Grabher, novative entrepreneurship alone is often not sufficient to develop new
1993; Tödtling and Trippl, 2005). Vested interests are strong due to the regional growth paths and may require institutional change and the
accumulated past investments in knowledge, networks, and support collective mobilisation of efforts from various actors. Therefore, in-
infrastructure in the field of specialisation. Change strategies towards stitutional entrepreneurship and place-based leadership are important
new green industries are thus most promising that allow reusing ex- types of transformative agency to be considered (Grillitsch and
isting capabilities either by upgrading existing industries or by di- Sotarauta, 2019).
versifying in new but higher value-added economic activities (Grillitsch Institutional entrepreneurship is concerned with actions and strategies
and Hansen, 2019). aimed at changing existing institutions or introducing new ones
(Battilana et al., 2009) and thereby create new opportunities such as
2.2. Change Agency the development of new industries (Sotarauta and Mustikkamäki,
2015). Institutional entrepreneurship is typically an iterative learning
These change strategies, however, have to be devised and im- process where unplanned events and developments require actors to
plemented by regional stakeholders and a deeper understanding of adjust their strategies and learn from failures. Institutional en-
‘agency’ is considered a missing link in the understanding of regional trepreneurship usually engages multiple actors, with potential incon-
growth (Rodríguez-Pose, 2013; Uyarra et al., 2017; Asheim et al., 2016, gruous visions and aims, who work together to transform dominant
Boschma et al., 2017). An important analytical distinction has been institutional arrangements (Sotarauta and Pulkkinen, 2011; Sotarauta,
made between agency as the underlying capacity to act, and the actors 2016; Sotarauta and Suvinen, 2018). Institutional entrepreneurship
who exercise the agency in distinct temporal and spatial contexts plays an important role in the emergence of new industries (Binz et al.,
(Emirbayer and Mische, 1998; Abdelnour et al., 2017). Agency is es- 2016).
sentially focused on actions or interventions to produce a desired social Place-based leadership is a form of collective leadership to coordinate
effect, but is also temporally embedded as agency is informed by the regional development efforts with a wide range of actors, extending
past but oriented towards the future (Garud et al., 2010; Cattani, from the individual private interests to the benefit of the region as a
Ferriani and Lanza, 2017; Sotarauta and Suvinen, 2018). whole (Sotarauta, Beer and Gibney, 2017). Place-based leadership es-
A distinction has been made in the literature between types of sentially focuses on coordinating potentially conflicting visions and
agency that transform existing structures and such that reproduce them discourses about the future of the region, mobilising heterogeneous
(Coe and Jordhus-Lier, 2011). In the context of regional path emer- actors in order to pool competencies and collective resources for a
gence, Isaksen et al. (2019) differentiate between firm-level agency and common goal, and negotiating with different actors at the municipal,
system-level agency. Firm-level agency captures new firms and in- regional, national and transnational scales to support the regional
trapreneurial activities of existing firms. System-level agency captures growth agenda (Normann et al., 2017).
actions aimed at changing the regional innovation system. This framing
is conducive as it builds on the regional innovation systems literature 2.3. Structural maintenance
and differentiates between its core activity “innovation of firms” and
the supporting “system”. However, for the purpose of this paper, it is Finally, structural maintenance points to actions that contribute to
problematic that types of agency overlap with types of agents. Firm- reproducing existing structures. As emphasised by Martin and Sunley
level agency directly relates to certain types of actors (firms, start-ups, (2006, p. 406), “[t]he past thus sets the possibilities, while the present
entrepreneurs) who conduct innovative activities, whereas system-level controls what possibility is to be explored.” Thus, agency is often
agency may relate to many actors (potentially firms and entrepreneurs strengthening existing structures and specialisations due to a number of
including) who pursue other activities affecting the system. different lock-in mechanisms (Klitkou et al., 2015). These include
We argue that we need to differentiate between types of agency and learning effects, i.e., that specialisation leads to increasing returns from
types of actors (cf. Emirbayer and Mische, 1998; Abdelnour et al., learning about existing products and processes, and economies of scale
2017). Following this idea, Grillitsch and Sotarauta (2019) develop the where earlier investments in production equipment lead to increasing
Trinity of Change Agency typology, bringing together three types of returns from further investments in existing production systems.
change agency, which have distinct theoretical roots and claim to While existing studies have focussed on the role of change agency
produce distinct effects for regional industrial path development. First, and institutional work to support new regional path development

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(Grillitsch and Trippl, 2018; Grillitsch and Sotarauta, 2019), institu- Trippl, 2017).
tional maintenance has been identified a key form of institutional work, Public policy actors can act as risk-takers when they support new
which focusses on reproducing existing norms and beliefs through day regional initiatives and push new agendas forward against opposition
to day practices and ensuring support of existing institutional ar- from other actors in the regions (Boon et al., 2015; Holmen and Fosse,
rangements (Lawrence and Suddaby, 2006). Instead of supporting novel 2017; Miörner and Trippl, 2017). Similarly, other accounts have
activities, institutional maintenance work involves resisting novel ac- highlighted that regional policy agents support and facilitate the de-
tivities and adapting to change incrementally in the context of regional velopment of new regional industrial paths by promoting new ideas in
path development (Henderson, 2019). Institutional maintenance work front of regional and national decision-makers and prioritising them for
involves actions such as introducing new practices to create deterrence political support (Dawley, 2014; Dawley et al., 2015). However, public
for change, supporting the persistence of existing institutional routines, policy actors may also be a source for structural maintenance if they
and using narratives to support the routinization of existing practices cooperate with elites to keep the status quo, for instance, by subsidising
and adherence to rules. Actors maintain their privileged positions by the leading industry (Grabher, 1993).
countering pressure for change, responding to competitive threats by Fringe actors understood as outsiders with limited power and re-
engaging in minor compromises with challenging actors and still sources can play an important role in shaping regional development
maintain their core practices (Hampel et al., 2017; Zietsma et al., paths in unforeseen and unexpected ways (Fredin et al., 2018; Zietsma
2018). Thus, there is also a need for attention to maintenance agency et al., 2017). Actors such as civil society organisations, user associa-
alongside change agency, which can create competition and constrain tions, and environmental movements can be a source of radical change
the development of regions to sustain new path development as they have a greater degree of freedom in challenging existing re-
(Henderson, 2019). gional institutional structures (de Bakker et al., 2013; Bertels et al.,
2014). Thus, even if the agency of fringe actors is often dispersed,
2.4. Actors of Change – Actors of Structural Maintenance disconnected and with limited impact due to power relations and
structural inequalities (Arora et al, 2014, 2017), in some instances, civil
The literature on regional innovation systems highlights the need society stakeholders can use disruptive tactics to pressure incumbent
for considering a wide spectrum of actors to understand the develop- actors to radical transformation and instigate wider institutional change
ment of industries and regions. Essentially, multiple types of actors may (de Bakker et al., 2013; Briscoe and Gupta, 2016). Strategies of fringe
exercise the various forms of agency outlined above (Karnøe and Garud, agents include mobilisation of public opinion, direct engagement with
2012). Further, an actor, or group of actors, can simultaneously be politicians, and other engagement actions such as protests (Aranda and
engaged in several types of agency or may exercise different types of Simons, 2017).
agency over time. Classical work on regional innovation systems dif-
ferentiate between firms (i.e., the business sector), facilitating organisa- 2.5. Summary of the analytical framework
tions for innovation and entrepreneurship (e.g., universities, educational
facilities, knowledge transfer centres, incubators, cluster organisations, Our point of departure is that new regional industrial paths are the
etc.), and public policy actors (e.g. regional, national, and international outcome of actions taken by agents embedded in multi-scalar networks
policy makers) (Autio, 1998. Tödtling and Trippl, 2005). In addition, it and institution. To take account of the variegated facets of change
has recently been argued that other actors, also labelled fringe actors, agency, we propose an analytical framework along three dimensions:
such as civil society organisations or user associations should play a time, types of actors, and types of agency (see Fig. 1).
larger role, in particular to ensure the societal benefit of innovations A longitudinal perspective on regional change processes allows for
(Van Wijk et al., 2013; Bertels et al., 2014). capturing shifts regarding the importance of particular types of change
As regards firms, a core distinction exists between start-ups and agency or change actors (Semper, 2019); thus, distinguishing between
incumbent firms. Radical industrial change is typically attributed to development periods characterised by different patterns of agentic
new firms and entrepreneurs, whereas incumbents tend to introduce processes. An open system perspective draws attention that relevant
incremental innovations promoting existing industrial paths (Neffke actors may be located outside the region, draw on regional and extra-
et al., 2018). Yet, some incumbents show ambidextrous behaviour by regional knowledge and resources, and operate in a multi-scalar in-
being open to and resisting change at the same time (Patala et al., stitutional framework.
2019). While many incumbent firms are resistant to change (Karltorp
and Sanden, 2012; Smink et al., 2015; Steen and Weaver, 2017), some 3. Research Method
incorporate disruptive innovations in their operations and move into
new industries to exploit new opportunities and engage in defensive 3.1. Background of the case study region
maintenance strategies to avoid disruption (Kumaraswamy et al., 2018;
Zietsma et al., 2018). Incumbents that invest in new managerial com- The region Värmland has always had a rich industrial base due to
petencies, establish new specialised divisions and business units, and the presence of forest assets in the region. Initially, the sawmill industry
actively engage in creating new markets are more likely to drive the developed in the region, which gradually developed into a pulp and
development of new industrial paths (Hansen and Coenen, 2017). paper industry. The combination of raw forest resources, access to
Facilitating organisations for innovation and entrepreneurship (facil- water resources of the lake Vänern for transporting the timber, and
itating actors) include a variety of actors, including universities, edu- generation of cheap hydroelectricity and et al. presence of iron ore
cational facilities, business development organizations, industry orga- contributed towards the development of Värmland. Subsequently an
nizations, cluster organisations, science parks, and incubators. These engineering industry emerged in the region, which saw the forest in-
actors play an important role in developing new capabilities or main- dustry as its primary customer. During the earlier phases of the in-
taining existing ones. They are often intermediators facilitating the flow dustry, large parts of Värmland were divided into ownership between
of knowledge and supporting the innovation process by matching two firms, Billerud and Uddeholm. The close geographical proximity
complementary actors and resources (Howells, 2006). Knowledge between the forest industry and the engineering industry also facilitated
support organisations also play a role in incentivising entrepreneurial innovation (OECD, 2006; Sandström and Berger, 2010).
activities through seed financing and advice. They can play a powerful Traditionally the region has been dominated by pulp and paper,
role in framing regional policy issues through careful storytelling and steel, and engineering, but in the recent years, other industries such as
mobilising legitimacy and resources for new regional initiatives, ICT, tourism, service, food, and packaging, and design have developed
drawing on both regional and extra-regional resources (Isaksen and in Värmland. Since the 1990s the region has experienced an ongoing

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Fig. 1. Analytical framework.

equivalent figure for Värmland is 13.5%, which is the highest among all
Table 1
the Swedish regions (Statistics Sweden, 2018).
Value-added within bioeconomy in the region Värmland (Source: SCB, Statistics
Sweden).
Year Value-added within the Net turn over within Gainfully employed 3.2. Qualitative case study approach
bioeconomy (SEK the bioeconomy (SEK within the
million) million) bioeconomy
We utilised a qualitative case study methodology (Gehman et al.,
2009 9344 31,978 12,348 2018) to conduct an in-depth and historically rich investigation of the
2010 10,467 34,404 12,563 development of bio-economy in Värmland. Earlier studies have sug-
2011 10,597 35,849 13,859 gested that the standard industry classification schemes used by sta-
2012 10,954 35,608 13,574
tistical offices do not capture the diversification of forest industry into
2013 10,442 34,607 13,547
2014 10,870 33,735 13,303 new emerging products and services, and there is a lack of rigorous data
2015 12,125 34,737 13,423 about the industry due to rapid changes (Hetemäki and Hurmekoski,
2016 36,598 13,357 2016). Qualitative approaches are also useful to study emerging re-
gional industries, which do not fit with the existing industrial classifi-
cation schemes (e.g., standard SIC and NAISC codes and patent classi-
fications) (Feldman and Tavassoli, 2015).
structural change in the pulp and paper industry and experienced Further, a qualitative case study approach allows for understanding
challenges related to profitability and retaining talented workforce in interlinkages between agency and structure through deep con-
the region. Through a cluster approach, the region has expanded from textualisation to uncover regional industrial renewal processes (Njøs,
the traditional pulp and paper industry into a broader bioeconomy, 2018; Mackinnon et al., 2019). The interplay between the role of actors
where bio-resources are exploited for the production of multiple types and underlying institutional structures for regional path development,
of products (Bugge et al., 2016). While the largest bioeconomy firms in can be studied by using a long-term longitudinal and process-oriented
Värmland are still primarily focused on pulp and paper production approach, which can help to capture both successful as well as un-
(Hallencreutz, 2018), a much broader portfolio of biobased products successful attempts at path development (Steen, 2016; Strambach and
are produced today, including firms specialised in the production of Pflitsc, 2018).
building materials, compostable and biodegradable products, and en- The focus of our case study was to identify the types of agency and
vironmentally friendly packaging solutions. Bioeconomy has become a the engaged types of actors in each of the identified phases. In order to
key contributor to the regional economy in Värmland (see Table 1). identify the actors and the actors, we used a systematic approach
Bioeconomy accounts for 6.2% of value-added in Sweden, while the (Grillitsch et al., 2019b), which is also explained in the next sections.

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The steps taken are as follows. articles, documents, newspaper articles, industry newsletters, regional
strategy reports, legal documents, policy documents, and video mate-
1. Archival sources were studied in depth in order to identify actions or rial. In total, around 200 archival documents about the development of
interventions intended to change or maintain the regional devel- the pulp and paper industry in Värmland were analysed (see Table 3).
opment trajectory. The first round of interviews was carried out in November 2017
2. From archival sources, individuals and organisations were identified with a field visit to the Värmland region where five face-to-face inter-
that could be linked to these actions or interventions. If no in- views were conducted. Interviews generally lasted between 60 and
dividuals were mentioned, we investigated who was in charge of the 90 min. We used different interview techniques such as event tracking
organisations engaged in the actions or interventions. We com- where we tried to ask the interviewees to recollect the background
plemented our list of interviewees by asking the regional authority information about their role in the regional industry, their prior ex-
Region Värmland to help us identify a balanced set of informants perience and historical developments in the industry after starting the
(i.e. both male and female experts, experts with diverse expertise in interview. We asked questions related to contemporary issues later on
the industry, experts who had worked in in the earlier phases and and ensured that we can relate the contemporary developments to the
contemporary phases, and performing different roles in the in- past developments. The interviews focused on understanding the
dustry). In addition, we asked interview partners to identify addi- combination of change strategies adopted and how opportunities for
tional potentially relevant informants. regional path development were initiated by them. We ensured to cover
3. Interviews were conducted with key informants who all had pro- all types of actors from the theoretical framework in interviews to
found knowledge (present and historic) about the forest-based gather sufficient primary data, which we complemented with archival
bioeconomy (and previously pulp and paper industry) in the region. data.
We interviewed them among others about the drivers and hinders Following the first interview round, we conducted six semi-struc-
for a transition to a forest-based bioeconomy, the role different types tured phone interviews in December 2017 and January 2018.
of actors played in different points in time, and how these actors Furthermore, we conducted a third set of 4 additional phone interviews
engaged (or worked against) this change process. in September and October 2019 with specific actors such as large paper
and packaging firm, start-ups focussing on bioeconomy, forest asso-
By triangulation of all the data sources, we could overcome typical ciation, and incubator networks for business development to comple-
challenges such as forgetfulness or ex-post rationalisation of inter- ment the insights gained from the earlier round of interviews. The in-
viewees. Also, by including the aspect of agency against change terviews were transcribed verbatim with a clear set of guidelines by a
(structural maintenance), we could capture opposing voices, which professional transcription firm. The interviewees have had vast ex-
might have been lost in the mainstream narrative of the regional change perience in different aspects of the value chain in the regional pulp and
process. Grillitsch et al. (2019b) In that way, a comprehensive and paper industry and have followed the development towards a bioec-
robust understanding could be developed about the variations of how onomy in the region quite closely.
different types of actors engaged (or worked against) the transition Observations were also carried out during a two-day study visit in
towards a forest-based bioeconomy. The next section provides further Värmland focused on bio-economy development. About 40 video re-
details about data collection and analysis. cordings were carried out during the event capturing the main discus-
sions, providing rich material to understand the various regional policy
debates. The event was also useful in personally meeting regional sta-
3.3. Data collection keholders and identifying informants for more in-depth interviews.

We relied on extensive archival data sources, semi-structured in-

terviews with 15 regional experts, and observations during a two-day 3.4. Data analysis
study visit in Värmland. We focussed on interviewing key stakeholders
who had considerable experience in forest-based bioeconomy and used We adopted a multi-scalar perspective to regional path development
a snowballing procedure to meet new potential interviewees. The de- as decisions and activities taking place at one scale often influence
tails of the interviewees are mentioned in Table 2. Since we are developments at other scales. Each regional case analysis is peculiar as,
studying long term development of an emerging industry, we relied on in some cases, regional agents operating within the region are the key
using archival data sources to provide rich data and long-term historical actors driving change within the region while in other cases actors
insights into the emergence of industries (Ozcan et al, 2017). The ar- operating at different scales could be the key regional change agents.
chival data sources included a wide variety of sources such as scientific We identified the boundaries of the Värmland case study and

Table 2
Semi-structured interviews.
Interview No. Professional designation and type of organization Date of interview

1 Strategist, regional growth development, regional development agency 24th November 2017
2 CEO, regional cluster organisation 27th November 2017
3 Director, business development, research institute 28th November 2017
4 Strategist, energy and environment, regional development agency 29th November 2017
5 Professor, regional university 30th November 2017
6 Consultant, pulp and paper industry 14th December 2017
7 Innovation Manager, municipality and project coordinator, open testbed initiative 20th December 2017
8 Consultant for cluster development 22nd December 2017
9 Mill Director, pulp and paper firm 5th January 2018
10 Researcher, regional university 12th January 2018
11 Former CEO of pulp and paper firm and business consultant 25th January 2018
12 Project manager, Bioeconomy Incubation network 10th September 2019
13 Director, Technology Centers, Large paper and packaging firm 26th September 2019
14 Chairman, Women’s forest association network 1st October 2019
15 Managing director, SME specializing in biobased materials 4th October 2019

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Table 3
Overview of the different data sources.
Sources of data Type of data Use in data collection and analysis

Semi structured interviews 15 semi-structured interviews in total in 2 different time Tracking the role of actors and their actions in bioeconomy
periods11 semi-structured interviews (November 2017-January development and understanding the key drivers and barriers to
2018)4 follow up interviews (September 2019 and October bioeconomy development; capturing the different actions played
2019) by the actors in different phases of the regional industry
development
Participant observations in forums Powerpoint presentations by different experts in the 2-day policy Establishing contact and trust with the informants working
including analysis of PowerPoint event on Bioeconomy development in Karlstad, Värmland; 40 towards bioeconomy development in Värmland; enhancing
presentations video recordings of the discussions by the experts to familiarize familiarity with the regional context and understanding the
the important discussions regarding bioeconomy development viewpoints of the regional actors; setting up follow up interviews
with the experts after meeting them in person
National and regional strategy reports on Reports by national and international organizations (Nordregio; Tracking information about regional and national strategies and
bioeconomy development Vinnova; OECD; European Commission) on regional strategies in policies for promoting bioeconomy development
different Nordic regions focussing on bioeconomy development;
smart specialization report by regional organizations such as
Region Värmland
Consultancy reports Reports produced by consultancy organizations depicting Gathering information about the size and scale of the regional pulp
background information about the regional industry in Värmland and paper industry and firms involved in bioeconomy
and future trends (e.g. Kontigo AB; Technopolis) development in the region
Company reports and press releases Reports and press releases on latest industry trends by firms such Collecting information provided by the large- and small-scale firms
as Nordic Paper, Stora Enso, Rottneros and the SME’s operating involved in bioeconomy in the region; useful for triangulating with
in the region information provided by the representatives of different firms
during the interviews
Websites Websites of key regional organizations like Paper Province, Useful for collecting background information about the different
region Värmland, Karlstad University, Nordic Paper, StoraEnso regional actors and preparing the interview guide for carrying out
and startup firms (e.g. Modvion; Renewcell) operating in the the semi-structured interviews
region
Academic articles, reports and thesis Research articles, master and doctoral thesis and reports by Gathering background information about the region before
scholars working in Karlstad University and other universities carrying out the semi-structured interviews; triangulate accounts
(Centre for cluster Observatory, Stockholm University) on presented by other academic researchers with the information
different aspects of bioeconomy development (e.g. role of civil provided by the interviewees
society, role of regional universities) in the region

examined if extra-regional actors operating at, e.g., the Swedish na- iteratively as we went back between emerging theoretical concepts and
tional level, or at the EU level played a critical role in our case study. the emerging data multiple times to make sense of the regional path
Even though some extra-regional actors (e.g. Region Värmland EU of- development process. As our initial interpretations emerged, we
fice in Brussels, Ministry of Enterprise and Innovation in Stockholm) checked for consistency of the account by iterating again and gathering
had relationships with actors operating within Värmland, they did not additional data. (Gehman et al., 2018; Semper, 2019).
play a central role in the regional path development process. Thus, the A particular concern was to ensure that the interpretations were
focus of the empirical analysis is on developments within the Värmland correct, which we tried to ensure by cross-referencing different archival
region and the role of regional agents in the path development process. material. Furthermore, to cross-check and verify our interpretation of
To develop the case study account, we relied on process research the developments in the region, we also submitted the draft manuscript
(Langley et al., 2013) and qualitative data analysis (Gehman et al., to the expert interviewees and asked them to review the empirical ac-
2018) to develop a case study account of the development of bioec- count and suggest potential modifications. The draft was submitted to
onomy in Värmland. We first worked towards developing a deep un- the different expert interviewees to ensure that we had not missed any
derstanding of the broader regional and historical context (e.g., Zietsma important events, the role of key actors and other important back-
and Lawrence, 2010) and focused on dividing the archival and the in- ground information about bioeconomy development in Värmland.
terview data into successive time periods and phases in order to observe The next section provides a detailed empirical analysis of bio-
distinct patterns (Langley et al, 2013). The description in each phase economy development in the Värmland region in different temporal
was developed by ordering the raw data from field notes, interview phases of regional development in Värmland, i.e. (1990–1999;
transcripts and archival data sources. We identified the key regional 1999–2011; 2011–2018)
change agents from the summarised raw data and focused on under-
standing their roles and strategies in transforming the regional industry 4. Case study analysis
from existing activities in the pulp and paper activities to bio-economy.
Relevant quotes from the transcribed interviews, which depicted in- 4.1. Phase 1 (1990–1999): Deepening existing specialisations
stances of regional agents challenging or reinforcing regional struc-
tures, were identified for the case study account. The first phase was characterised by structural maintenance ex-
During the second stage of data analysis, our focus was on capturing ercised by incumbent firms, new firms, and public policy actors, which
the temporal dynamics, i.e. engagement of different actors over time by contributed to deepening specialisation of the regional pulp and paper
being sensitive to the changing roles and actions and the distributed industry. Conversely, the different forms of change enabling agency
and interactive actions between different actors (Karnøe and Garud, were largely absent, leading to a period characterised by path exten-
2012) shaping the regional path development process. We were inter- sion.
ested in capturing the work being done by the actors and the intentional
and unintentional consequences of it (Lawrence and Suddaby, 2006). Structural maintenance
Further, while analysing the data, we were also aware of the fact that The pulp and paper industry historically in Värmland started to
not every action was taken by the actors to transform the institutional grow due to easy access to timber, efficient water transportation as well
arrangements would result in success. The data analysis occurred as access to cheap hydroelectricity. The Värmland region had a

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significant presence of pulp and paper mills and engineering firms 4.2. Phase 2 (1999–2011): Promoting a vision for industrial change
building machinery for the paper firms in the past (Karlsson et al.,
2001). As the number of pulp and paper mills grew, the region soon In the second phase, we have observed efforts to create a colla-
attracted process equipment and other suppliers, making Värmland a borative culture with an increasing role of public policy actors and
unique centre for process innovations that would later be used by the facilitating actors in promoting a vision for industrial change. The
pulp and paper industry all around the world (Sölvell, 2009; Interview dominant forms of agency in this phase are institutional en-
11). trepreneurship, place-based leadership, and Schumpeterian innovative
In the 1990s, many businesses in the paper and pulp industry suc- entrepreneurship, contributing to establishing path diversification.
cumbed to fierce competition from firms in South America and Asia.
Increasing cost pressure and consequently, the need for economies of Institutional entrepreneurship
scale, high environmental requirements, and structural changes in the One factor contributing to the structural crisis during the 1990s was
industry forced the regional industry to reconsider its business practices the dominant practice of individual firms rivalling on regional markets.
(Interview 8; Interview 11; Manickam, 2016). The dominant approach The institutional change that was the seed for industrial change in our
taken by the industry was to deepen specialisation in the production of case refers to a change in mind-set where regional actors started to see
packaging materials, as it was not able to match global competition in the opportunity of competing on world markets by collaborating re-
the printing paper market (Sörensson and Jonsson, 2014; Interview 11). gionally (Interview 8).
The main emphasis in innovation efforts by key firms such as Karlstad Municipality was a key actor who initiated an institutional
BillerudKorsnäs, Nordic Paper, and StoraEnso was to increase energy change process by reaching out to key firms and the university. As an
and production efficiency to improve profitability (Interview 6). instrument to facilitate institutional change, Karlstad municipality
Furthermore, investments focused on extending competitiveness in started “The Paper Province” as a small project in 1999 and worked at
packaging materials, which had, for long, been a stronghold in convincing other partners about the potential of a collaborative re-
Värmland. As one of the interviewee's remarks: gional approach for global competitiveness. The Paper Province de-
“By pure luck, it was not a skilled decision, but the mills in veloped into a unique business cluster connecting different pulp and
Värmland never went into printing and writing or other printing paper firms, SMEs, university and training institutes, public organisa-
grades or newsprint, neither fluting board and some specialty pa- tions including VINNOVA and the Swedish Agency for Economic and
pers. So, we are not affected by the Internet. So, that is the biggest Regional Growth, regional authorities, and civil society groups in the
thing here in Värmland, which means then, since, I mean, we have region (Interview 2). Some of the large member companies included
been making liquid board [used for packaging beverages] for firms like Andritz, BillerudKorsnäs, Metso, Mondi, Stora Enso, Tetra
30 years, and now, when the consumption in the world of liquid Pak and Voith (Sörensson and Jonsson, 2014).
board is increasing Värmland will become the world centre of pro- Another focus of the Paper Province was to reframe the crisis into an
ducing liquid board.” (Interview 11) opportunity for developing new products and markets, i.e., to shift from
a defensive strategy of protecting old business models to an offensive
An increasing number of new firms offering specialised support
strategy of developing innovative solutions. In this regard, The Paper
services further amplified the continuing specialisation of incumbent
Province promoted a pragmatic and experimental approach to find new
firms in packaging, which also resulted in the development of spinoffs
solutions to the problems in the industry with limited resources avail-
and entrepreneurial businesses serving specialised demands in the pulp
able. The idea was to shift from endless debates and discussions rooted
and paper industry. The development of new spinoff firms was stimu-
in rivalries between firms to concrete and joint actions to make things
lated by the needs and demands of the large forestry groups for e.g. the
happen (Interview 8). This process of institutional entrepreneurship led
role of ICT consultancies oriented towards forest industries and spe-
to a change in mind-set as compared to phase 1, and consequently, to
cialised logistics and control technology (Tsuchida, 2013). Suppliers of
collective efforts to support the transition to a bio-economy as evi-
process equipment, consultants, and service providers increasingly
denced in the next sub-section on place-based leadership.
created a high density of competencies in the region, which matched
the requirements of the pulp and paper producers (Interview 8; Inter-
Place-based leadership
view 9). The Värmland pulp and paper mills benefitted from proximity
The antecedent to place-based leadership was a change in mindset
to key suppliers such as Andritz, Voith, BTG and technology and IT
where regional actors saw the benefit of collaboration. The change in
consultants such as ÅF, Citec KPA, Sogeti and Pöyry, and the resulting
mind-set was then a fertile ground to identify and negotiate common
opportunities for regular interaction and dialogue, which helped the
interests, coordinate regional development efforts, and pool resources
mills to improve their production processes and competitiveness
for a common goal. Key actors were public policy actors, in particular,
(Henriksson, 2016; Interview 11).
Region Värmland, which collaborated with facilitating actors, in par-
Due to the increasing international competition and crises in the
ticular The Paper Province and Karlstad University, for supporting the
pulp and paper industry in the region, the regional authority, the
pulp and paper sector by creating new meeting places and developing
County Administrative Board of Värmland and a representative from a
new incentives and co-operation between the different regional stake-
municipality began to consider more carefully how the pulp and paper
holders (Interview 1; Interview 5).
industry could be nurtured and made attractive for skilled labor
In 2000, the County Administrative Board (Länsstyrelsen) identified
(Sölvell, 2009). The regional authorities introduced the cluster concept
forests and the forest-based industry as a business area with strong
and undertook a number of concrete actions: firstly, they mapped all
potential for promoting regional growth. In 2005, a new regional
firms related to the pulp and paper industry in the region; secondly,
strategy called Sustainable Regional Growth was launched, which
through interviews and other forms of data collection they explored the
identified the pulp and paper industry as a central area of future de-
relationship between the firms including how they were doing business
velopment (Interview 1; Olsson, 2007). The Regional Growth Pro-
with each other. The rationale behind this effort was to explore
gramme initiated in Värmland offered a suitable context for sustainable
common problems faced by firms, such as labour shortages, and to
regional development. Support and funding for the regional growth
identify potential ways for actors to work together in addressing these
programme were secured from the County Administrative Board,
challenges. The Paper Province became instrumental in bringing to-
County council, and Regional Värmland (Van Vught et al., 2006).
gether the forest value chain as well as public authorities and regional
The Paper Province, with support of Region Värmland, started
universities for developing a vision for the regional industry (Van Vught
various initiatives to promote experimentation and testing, such as
et al., 2006; Sölvell, 2009; Interview 8).
Packaging Greenhouse, Packaging Arena, and Energy Square (Chen,

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2009). Furthermore, Region Värmland collaborated closely with Karl- economy, to position Värmland as a large-scale demonstrator of forest-
stad University, which in its own right, pursued place-based leadership based bioeconomy (Interview 2; Interview 5; Grundel and Dahlström,
by actively strengthening educational and research fields with links to 2016).
regional industries. Karlstad University engaged in co-operative re- Place-based leadership has thus focused on coordinating regional
search on pulp and paper technology, as well as material and chemical interests and mobilising resources to not only upgrade the existing in-
engineering (Van Vught et al., 2006; Interview 5). dustry but also diversify into new fields of higher-value added activ-
During 2005–2006, a study conducted on regional development in ities. Furthermore, these activities have been complementary to
Värmland in connection with the OECD educational initiative Värmland’s Smart Specialisation strategy, which identifies the forest-
“Supporting the Contribution of Higher Education Institutions to based bio-economy as one of its most important priorities. Värmland’s
Regional Development” created a formal network between Region Research and Innovation Strategy for Smart Specialisation (VRIS3), was
Värmland and Karlstad University. The regional engagement of approved in 2015 in close co-operation between Karlstad University,
Karlstad University was strengthened, leading to an agreement with regional clusters and related industry with the aim for developing the
Region Värmland on co-financing ten professorships from 2010 to 2014 potential of the region by supporting areas prioritised based on iden-
in sectors and topics of importance to the regional industry. Region tified strengths, market demand, potential to meet societal challenges
Värmland also established facilities for better interaction with the and gaining international competitiveness (Interview 1; Henriksson,
university and enhancing research co-operation (Interview 1; Tsuchida, 2016).
2013). The establishment of the Academy for Smart Specialisation in 2016
underpinned the smart specialisation strategy. The academy is a col-
Schumpeterian innovative entrepreneurship laboration between Karlstad University and Region Värmland to sup-
In this phase, Schumpeterian innovative entrepreneurship emerged port new industrial path development. In this context, the academy
to develop new value-added products based on lignin. The dominant invested in key areas such as forest-based bioeconomy, digitalization of
form of action were demonstration projects, which, interestingly, were welfare services, and advanced manufacturing. The Academy for Smart
driven not driven by firms but facilitating actors. For instance, Specialisation has been designed to be integrated into the university’s
Innventia, a research institute, set up a demonstration plant to show- research and education strategy and thereby reinforce the university’s
case the effectiveness of a lignin extraction process, which was a first goal to collaborate with society actively (Academy for smart speciali-
step towards the development of new lignin-based products. (Interview zation, 2016; Henriksson, 2016). In the spirit of smart specialisation,
3; Interview 7). this initiative builds on existing strengths but aims at diversifying into
Karlstad University also supported new entrepreneurial initiatives. new promising industrial paths (Interview 1).
From 2010, the Grants and Innovation Office established at Karlstad Building on the developments in phase 2, when the first demon-
University focussed on increasing collaboration between the university stration plant in Bäckhammar was implemented, new regional in-
and the business sector as well as with three other Swedish universities. itiatives were realized, assisting firms in developing new concepts for
The idea of stimulating innovation collaboration was to support new lignin fuel. Innventia, Kristinehamn municipality, and The Paper
entrepreneurial initiatives within the university as well as across the Province collaborated to develop the LignoCity initiative with the
regional boundaries (Kempton, 2015). purpose of creating a space for the identification and promotion of new
ideas on alternative lignin applications (Interview 3). The demonstra-
4.3. Phase 3 (2011–2018): Diversification into higher value-added tion plant constructed in 2007 was reused and rebuilt for the open test
activities bed initiative LignoCity. Lignin is used for producing new types of fuels,
materials, and chemicals. Lignocity aims at helping firms to test, eval-
In phase 3, the dominant forms of agency shifted from institutional uate and refine new ideas and bridge the gap between experimental
entrepreneurship to place-based leadership by a variety of regional initiatives and actual commercial applications (Interview 3; Tomani,
actors and Schumpeterian innovative entrepreneurship driven by new 2017). Further, the Karlstad Innovation Park established by the Karlstad
firms but supported by incumbents. These activities led to a diversifi- University, Karlstad Municipality, Region Värmland, and Värmland
cation into higher value-added activities. In addition, we observe in- County Council is working on creating interaction between research
stitutional agency of fringe agents aiming at revaluing forest resources. activities and entrepreneurship in the region and develop shared net-
works (Kristensen and Mikkola, 2016). The Sting Bioeconomy and
Place-based leadership Kickstart network Värmland supported by the Paper Province, is
As regards place-based leadership, public policy actors and facil- creating an enabling business-friendly environment for start-ups and
itating actors have played a key role. In 2012, Region Värmland in- spinoffs from existing large firms operating in forest-based bioeconomy
troduced the new regional cluster strategy ‘Värmland model 2.0′, which in the region. During the earlier phases of the regional industry, there
focused on upgrading and enhancing existing competencies by in- was a lack of trust between the different stakeholders for cooperation.
creasing national and international co-operation (Goddard et al., 2013; The Kickstart network has been influential in developing regional
Grundel and Dahlström, 2016). Further, in 2012, the Paper Province structures for co-operation for the start-ups in the region. The Kickstart
was successful in mobilising long-term funding for new bio-economy network has supported start-ups in the region by (1) providing them
initiatives from VINNOVA’s Vinnväxt programme. This funding aims at with resources and expertise to scale up through organic growth; (2)
experimenting with new bio-economy initiatives and enables the region helping them set up collaborations with large industrial firms and (3)
to capitalise on its existing strengths as a leading pulp and paper cluster supporting industrial exits, which allow for further-development of the
(Interview 2). Furthermore, the new Vinnväxt initiative called ‘Paper start-up’s technologies (Interview 12).
Province 2.0′ received funding from various partners to support a bio- Furthermore, regional business development officers in Värmland
based economy. The financing for Paper Province 2.0 came from VIN- have highlighted current bio-economy initiatives to civil servants and
NOVA and other regional co-financiers such as Region Värmland, officials in the Ministry of Enterprise and Innovation to get attention
County Administrative Board, Karlstad University, municipalities in and mobilise support from the national government. At the European
Värmland, County council, the forest board, and the member firms in level, Region Värmland has attempted to lobby for supportive policies
the Paper Province. The objective of this initiative has been to stimulate by having representatives from the region participate in policy debates
greening and diversification of the pulp and paper sector in Värmland concerning the development of the bio-economy (Interview 1;
and transformation of the economy to a more bio-based and circular Interview 4).

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Schumpeterian innovative entrepreneurship incumbents have been less willing to collaborate on activities that po-
Largely thanks to the developed support structures for innovation tentially compete with existing core product groups for raw material
and entrepreneurship in phases 2 and 3, we observed an increased supply (Interview 8). Overall, therefore, the incumbent firms have
activity in Schumpeterian innovative entrepreneurship. Of central im- taken a supportive but not very proactive role in Schumpeterian in-
portance was a more collaborative culture, including changing roles for novative entrepreneurship (Interview 1). However, incumbents are
public policy actors and Karlstad University, identification of and potentially important for start-ups for their competencies, networks,
funding for strategic areas for diversification, and establishment of and resources.
supporting initiatives such as the Academy for Smart Specialisation,
LignoCity and The Sting Bioeconomy and Kickstart network. Alternative industrial paths: Institutional entrepreneurship of fringe actors
While new firms have been the main drivers of Schumpeterian in- In contrast to the strong partnership in the Värmland region be-
novative entrepreneurship, incumbent firms have also provided support tween business, academia, and the government, the links are rather
to and engaged in new ventures. Schumpeterian innovative en- weak to civil society actors, forest associations, female forest organi-
trepreneurship has contributed in particular to two forms of new path sations and owners, and ordinary citizens. As remarked by one inter-
development: i) technological upgrading where new technologies make viewee
a significant change to existing products or processes, and ii) diversi-
“So, I think that there is a lack of connections between the industry
fication based on combinations of related and unrelated knowledge.
and the civil society [….…]. The paper industry is an industry,
For example, Modvion develops wind tower technology by repla-
which is far from civil society. The products are not directly sold to
cing steel and concrete constructions with an environmentally-friendly
the consumer. The value chain is quite long before the finished
wood-based material. Re:newcell develops solutions for converting
product reaches the consumer.” (Interview, 10)
used cotton and other natural fibers into new biodegradable pulp,
which can be fed into the textile production cycle (Interview 2). Thus, in general, actors beyond dominant business clusters, aca-
Cellcomb focuses and specializes in developing environmentally demia, and the government have had a low influence on the definition
friendly absorbent products for the healthcare, food, and the hygiene of priorities in regional development documents. The association of
industry. A key reason for the firm to stay within the Värmland region is forest women in Värmland (Skogskvinnorna) has advocated for more
due to the presence of knowledge and competencies about the forest equality in the traditionally male-dominated regional industry and has
industry available in the region, access to suitable locations for setting argued that new initiatives are needed to enhance the attractiveness of
up plants and the support received from the cluster organization Paper the industry for young female engineers. New recent initiatives have
Province, Business Vårmland and the Karlstad University for collabor- started such as the Gender Academy (Grundel and Dahlström, 2016;
ating on different initiatives (Interview 15). Another promising firm, Interview 10). The association has helped female forest owners in ne-
Drinor focuses on solutions that allow for higher utilisation of biomass gotiating better deals with the large firms in the region when selling
through an innovative mechanical dewatering process. As argued by wood, and has also provided inputs on topics related to forest resource
one interview partner, there is a huge potential for innovative start-ups management through meetings with regional government authorities,
to utilise the waste streams from the regional industry, but challenges regional firms, and cluster organizations (Interview 14).
remain, as most of the start-ups have yet to develop commercially vi- Furthermore, there are civil society initiatives (in line with trends in
able products and services (Interview 2). other European countries) aimed at defining the value of forests dif-
The large paper and packaging firms in the region, such as ferently, for instance in terms of nature and landscape conservation,
BillerudKorsnäs have gained a positive image as a leading firm in the ecosystem services such as carbon capture, wildlife protection, or re-
development of new renewable materials, semi-chemical fluting, liquid source for tourism and recreation (Interview 10). These actions of
packaging board, and in using different waste streams to produce new fringe actors have so far not influenced the dominant development
materials. Central to this development has been the creation of spe- trajectories. A broader discourse on regional development priorities
cialized technology divisions for developing new renewable materials with current fringe actors could both open new pathways but also limit
with funding for long-term research and development activities. The the exploitation of others (Interview 5; Interview 10).
firm has also initiated a number of flagship projects for the develop-
ment of new renewable materials and allocated significant resources for 5. Conclusion
these projects. Associated with this, BillerudKorsnäs has changed the
skill and competence-base by hiring new specialist staff with advanced The current paper sets out to examine the role of public and private
technological skills and doctoral degrees and experience in business actors in constraining and facilitating greening of industries in a re-
development to support the new initiatives and create new markets gional context, as, arguably, limited attention has hitherto been given
(Interview 13). to micro-level processes in studies of regional industry development
Similarly, the region’s other large pulp and paper firms have con- (Asheim et al. 2016; Boschma, 2017; Uyarra et al., 2017). While
tinued exploiting their current business operations around packaging quantitative (Neffke et al. 2018; Elekes et al. 2019) and qualitative
but also investing in new technologies, reducing energy consumption, (Mackinnon et al. 2019) work on the topic is emerging in economic
and creating value-added products from waste streams (Interview 6; geography, we still have an insufficient understanding of how various
Interview 9; Interview 11). The large firms have also collaborated with types of actors perform different forms of agency in regional path de-
each other while lobbying together on important issues facing the in- velopment processes.
dustry as members of cluster organizations. In some instances, they To this end, we pose the question ‘How does agency and the actors
have also supported generic research and development activities with involved vary over time in the greening of industries in a regional context?’
the other large firms in national research platforms (Interview 13). and develop a framework for understanding how multiple types of
Even though incumbents have not had a short-term business in- agents and the agency they exercise influence new path development
centive to diversify, firms such as Nordic Paper have been co-operating processes over time. First, our analytical framework focuses on change
in different testbed initiatives for extracting lignin and for producing enabling types of agency, i.e., Schumpeterian innovative en-
other high value-added products (Interview 3; Interview 7). Other firms trepreneurship, institutional entrepreneurship, and place-based lea-
have been investing in pilot projects concerning biorefinery develop- dership (Grillitsch and Sotarauta, 2019) as well as on agency that
ment and new board machines for packaging solutions. They have been contributes to maintaining existing structures. We suggest that paying
interested in open innovation environments where they have collabo- attention to all four types of agency allows for a complete under-
rated with start-ups for novel R&D activities (Interview 9). The standing of the dynamics of new path development processes. Second,

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Table 4
Predominant types of agency and influential agents.
Schumpeterian innovative entrepreneurship Institutional entrepreneurship Place-based leadership Structural maintenance

New firms Phase 3 Phase 1

Incumbent firms Phase 3 Phase 2 Phase 1
Facilitating actors Phase 2 Phase 2 Phase 2Phase 3
Public policy actors Phase 2 Phase 2Phase 3 Phase 1
Fringe actors Phase 3

our framework calls for attention to a broader set of actors involved in A way of reducing bias from accounts provided through the semi-
exercising the various forms of agency (Semper, 2019). structured interviews could have been to conduct longitudinal inter-
Our empirical analysis of path development processes in Värmland views over multiple time-periods to understand how complex processes
illustrates the significant variation in the roles played by different types unfold over time in an emerging industry. However, conducting mul-
of agents over time (see table 4). For example, incumbent firms ex- tiple interviews with the same informants in two different time periods
ercised structural maintenance in the first phase, place-based leadership is not always feasible. Informants may not be prepared to be inter-
in the second phase, and Schumpeterian innovative entrepreneurship in viewed multiple times due to busy schedules. Informants may change
the third phase. Further, the analysis highlights how a type of actor may jobs and new experts may enter the industry. Due to switching positions
carry out multiple types of agency at the same time, e.g., facilitating and confidentiality commitments, informants may be restricted in un-
actors in the form of universities and research institutes, which ex- veiling relevant information. Some of the expert interviewees in our
ercised both Schumpeterian innovative entrepreneurship and place- sample also had worked in different positions in the past which was
based leadership in the second phase. This highlights that there is not a useful to find information about the earlier phases.
simple answer to the central research question of the paper: the roles of Our paper develops a more detailed understanding of the variation
different types of actors in regional path development processes are of agency over time in a regional context by taking a process view of
contextual. A specific type of actor may exercise structural maintenance agency and using a longitudinal analytical frame to shed light on the
agency in one development phase and different types of change agency actions of actors in different temporal phases (Semper, 2019). We see at
in the following phase. A core implication of this finding, and con- least two promising avenues for future research. First, we encourage
tribution of the paper, is a caution towards assigning specific agency more comparative research to arrive at more generalizable mechanisms
roles to specific types of agents involved in path development processes. for regional path development. Future research would include ana-
The framework developed in this paper avoids such assumptions and lysing the role of agency in industry development processes across a
allows for conceptualising the multiple roles that different types of number of regions with varying characteristics. It could also entail
agents may take in regional path development processes by exercising cross-case analysis according to different types of path development
different types of agency. The framework also explicitly points attention processes – upgrading, diversification, and emergence and different
to forms of agency (structural maintenance agency) and types of agents stages in the industry life cycle. Second, there is a need for focusing on
(fringe agents), which are generally overlooked in the analysis of re- better understanding the relationship between change enabling and
gional path development processes. structural maintenance agency and how they co-evolve with each other
Following this, a central policy implication is that policymakers during the different phases of regional path development.
should not necessarily attribute specific types of agency to specific actor
groups. Rather than for instance assuming that new firms are necessa- CRediT authorship contribution statement
rily the central sources of Schumpeterian innovative entrepreneurship,
we suggest that policymakers should consider a broader spectrum of Suyash Jolly: Writing - original draft, Writing - review & editing,
actors and identify which agents are working for or against change in a Conceptualization, Investigation, Methodology, Validation, Data cura-
given time and place, what strategies they pursue, and what effects tion. Markus Grillitsch: Writing - review & editing, Validation,
their doing has on regional structural change. For instance, while so- Conceptualization, Visualization, Methodology. Teis Hansen: Writing -
called fringe actors did not significantly affect the path development review & editing, Conceptualization, Visualization, Supervision, Project
process in our empirical case, other recent contributions highlight the administration, Funding acquisition.
variety of actors that may drive or influence path development (Holmen
and Fosse, 2017; Fredin et al., 2018), and the attention of policymakers Appendix A. Supplementary material
should reflect this. Further, policymakers should pay attention to
changes in the role of different types of actors over time – the actors Supplementary data to this article can be found online at https://
driving change agency today, will not necessarily do so tomorrow. Fi- doi.org/10.1016/j.geoforum.2020.02.013.
nally, we propose that policies supporting new path development pro-
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