“Relatedness, Complexity and Local Growth,” co-authored with Dave Maré while I worked at Motu, has undergone peer review. A revised version was published online today and will appear in a future issue of Regional Studies.

Dave and I present a measure of the relatedness between economic activities that is more robust to noisy employment data than measures used in previous studies (e.g., Balland et al., 2019; Hidalgo et al., 2007; Rigby et al., 2019). We demonstrate this robustness using historical census data from New Zealand. We also demonstrate that relatedness patterns do not significantly influence the employment dynamics described by those data.

Our analysis suggests that the principle of relatedness applies in large geographic areas only. In our New Zealand data, the benefits of proximity are more apparent in larger cities, where workers engaged in related activities interact more frequently. Our paper highlights some of the challenges with operationalising place-based regional growth and innovation policies, such as the “smart specialisation” policies adopted in the European Union.

Read the published article (available under Open Access) for more details.