Localised knowledge, local policies and regional innovation activity for renewable energy technologies: Evidence from Italy

This paper investigates the mechanism of locally induced innovation activities in the field of renewable energy technologies (RET). A panel data analysis from 1998 to 2007 across 20 Italian regions identifies the primary drivers of renewable energy patenting activity. As expected, the localised stock of knowledge, local researchers and regional public research subsidies contribute significantly to the development of innovation activities. Additionally, regional characteristics, such as regional energy dependence and hydroelectric resources, are effective in determining the RET innovation patterns. Specifically, regional hydroelectric power acts as a substitute input and hence hampers the innovation activities in the field of RET. Finally, RET innovation activities depend to a limited extent on the political orientation of regional councils, thereby confirming prior research on the role of social acceptance of and political support for technology development. Highlighting the role of local resources and local policies for RET innovation activities, the present research has potential implications for economies that strive to become more self-reliant and less import intensive in the knowledge sector.