The Impact of Industry 4.0 Ecosystems on European Regional Innovativeness

The new opportunities and challenges for firms coming with the Fourth Industrial Revolution inspire many Governments and private actors to establish knowledge-sharing collaborative initiatives, which we term Industry 4.0 ecosystem. While research has shown the positive implications of Industry 4.0 on firms, the territorial dimension and the impact of specific Industry 4.0 ecosystems have been largely unexplored. We look at how Industry 4.0 ecosystems and their types affect regional innovativeness across 227 European NUTS-2 regions in 2016-2021, utilizing the Digital Innovation Hub database by the Joint Research Center to operationalize Industry 4.0 ecosystems. We find a positive association between Industry 4.0 ecosystems and regional innovativeness via launching new-to-firm and new-tomarket products but not via patenting. At the same time, we find that Industry 4.0 ecosystems effectively amplify regional innovativeness in regions with prior medium Industry 4.0 capacity. Finally, Industry 4.0 ecosystems with diverse knowledge are effective for regional innovativeness via patenting, but only in regions with a prior high level of Industry 4.0 capacity. Keywords: Industry 4.0 ecosystems, Industry 4.0 regional capacity, regional innovativeness, related and unrelated variety.