Path dependency, entrepreneurship, and economic resilience in resource-driven economies: Lessons from the Newfoundland Offshore Oil Industry, Canada

Benjamin Spigel, Cedric Brunelle

Research output: Chapter in Book/Report/Conference proceedingChapter (peer-reviewed)peer-review

Abstract

Resource driven regional economies have experienced significant growth over the past decade due to increasing prices of raw materials such as oil and the need for customized and site-specific technologies to increase production and reduce risk. As a result, significant amounts of human and financial capital have built up in these regions. However, there are few examples of resource-dependent economies using these regional assets to successfully diversify away from their dependence on extractive industries, leading to profound declines as resource prices decline globally as they did in 2015. This paper examines the evolutionary lock-in and lock-out processes of resource economies and the potential of technology entrepreneurship to initiate path creation in these regions. Based on interviews with entrepreneurs, investors, and policymakers in St. John's, Newfoundland, we explore the processes through which firms both inside and outside the resource industry are locked-in to existing economic trajectories and the ability of technology entrepreneurs to break out of these limitations and diversify into new industries and markets. We find that the relationships between the region’s culture, its investment environment, and global changes in the oil and gas industry combine to create and reproduce industrial lock-in within the region. If long-term regional diversification and path creation appears to be the exception rather than the rule for resource-driven economies, entrepreneurs stand out as the central drivers of change shaping the path-enabling potential generated through resource booms.
Original languageEnglish
Title of host publicationCreating Resilient Economies
Subtitle of host publicationEntrepreneurship, Growth and Development in Uncertain Times
EditorsNick Williams, Tim Vorley
PublisherEdward Elgar Publishing Ltd.
Pages89-108
ISBN (Electronic)978 1 78536 764 9
ISBN (Print)978 1 78536 763 2
DOIs
Publication statusPublished - 1 Jan 2017

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