Post-Collapse Evolution: the Case of the Emergence of the Subsea Technology Cluster in England.

Schumpeter (1942) wrote about the destruction that follows the diffusion of radical innovation. However, the opposite phenomenon - the creative power of destruction - seems to have been less studied. Drawing on a longitudinal case study of the Subsea Technology Cluster, we show how the collapse of the century-old sector of shipbuilding and heavy engineering in the North East of England created a context allowing for the emergence of the Subsea Technology Cluster. The existing theory has univocally framed the problem of adaptability of mature socio-technical systems in terms of path dependency or continuity of the dominant industry. By adopting a nested unit of analysis we provide a more fine-grained analysis of continuity and discontinuity of the evolution of industrial cluster following a collapse of its dominant industry, which activated a process of reconfiguration of resources and capabilities, previously frozen in obsolete architectures. We identified three processes which appear to be particularly important in the creation of novel technological trajectories: modification of search processes, exaptation and recombinant innovation. Our results also show that the process of post-collapse regeneration can be relatively rapid. These findings have important policy implications as they suggest that instead of focusing on preserving old industries, policy should focus on enabling emergence of new industries. [ABSTRACT FROM AUTHOR]