This chapter introduces the concepts of related variety and skill-relatedness in the European Union, and discusses how this links to the entrepreneurial search process and innovative structural change in regional contexts. The concept of relatedness is central and it encompasses more than sectoral branching because it also captures various other important forms of proximity and regional relatedness in Europe. These include input_output and global value chain linkages, institutional proximity, technological and cognitive relatedness, knowledge transfer mechanisms and infrastructural relatedness. The chapter illustrates a new empirical research which puts skill-relatedness on the local (sub-regional) map of the Netherlands. The chapter links the patterns of mapped relatedness to policy implications at the local and regional level, and shows that diversification strategies may be more complex to actively pursue when they have to comply with existing entrepreneurial, educational, industrial organisation, infrastructural and social network conditions.

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Department of Applied Economics

van Oort, F.G, Cortinovis, N, Dogaru, T., & van Haaren, J. (2020). Mapping relatedness in European regions. In Quantitative Methods for Place-based Innovation Policy. doi:10.4337/9781789905519