ABSTRACT
This chapter shows that insights from the literatures on evolutionary economic geography and transitions to discuss changes in socio-economic systems with a focus on environmental sustainability. It describes and analyses processes of transition towards a sustainable forest-based bio-economy. The chapter discusses the role of agency and the multi-scalar nature of regional transitions to new socio-technical systems. Evolutionary interpretations of regional development and diversification have emphasised the importance of local knowledge given the path-dependent nature of learning and technological change. Socio-technical-systems transitions involve not only new technologies but also changes in markets and user practices, as well as institutions which are often contested. Profit-driven firms are also tightly integrated into the knowledge and innovation networks of their parent companies. This double-embeddedness enables these firms to play a significant role in the upgrading of the innovative and manufacturing capabilities of the locality as they can become conduits for the entry of state-of-the-art knowledge into the region.
