Industrial dynamics in the context of a region’s international competitiveness

Abstract

This article attempts to explain the resilience and international competitiveness of a micro-region in Portugal, based on three intertwined levels – firm, industrial structure and region. The study covers the period 2006–2014 and is based upon a rich micro-level dataset of all firms established in Portugal. The findings reveal the dynamics of the industrial base of this region and how its enterprises managed to remain competitive over time, reinventing themselves through innovation and related diversification, conveying knowledge and expertise from incumbent businesses to new ones with higher value added. Proximity between firms played an important role in learning processes, and knowledge creation was promoted by shared knowledge. Competitiveness requires ongoing replacement of resources and rejuvenation of structures and institutions, turning regional capabilities into valuable assets.