On the Changing Nature of Industrial Production: Implications for a Research Agenda in Aeronautics Industrial Policy

The geography of industrial production is continuously shifting towards the most cost effective locations, being particularly associated with increasing uncertainty. This paper presents a contextual analysis of industrial production dynamics leading to a policy research agenda. In particular, we use unbalanced panel data on 173 European regions, during 1999-2007, to examine whether knowledge, human capital and innovation capability help to explain the role of manufacturing on regional development. A number of regulatory, institutional and policy issues affect the analysis. The relative inadequacy of existing frameworks to capture complexities of emerging distributed supply chains is discussed in the paper, which argues about the need for a new approach to analyse industrial production and innovation. We focus the analysis on aeronautics due to its strategic importance for industrial dynamics, innovation, human capital and socioeconomic development. The paper proposes a new research agenda on the changing nature of industrial production. Overall, this research aims at identifying pathways towards more resilient supply chains, benefitting the creation, development and accumulation of technological capabilities in aeronautics.