A region’s earlier success can become the cause of its own decline

Evidence

During the economic crisis between 1992 and 1994, the economy of Baden-Württemberg suffered more than the other states of former West Germany. The GDP declined by 4.7 per cent (1993), while unemployment rate rose from 3.7 per cent (1991) to 8.7 per cent (1997). … Between 1980 and 1995, more than 15 per cent of the employment in mechanical engineering was lost; in the electronics and electrical engineering industry, the decline amounted to almost 14 per cent of the jobs. Employment related to the production of electronic data-processing systems declined by 10.5 per cent between 1980 and 1996 (see Statistisches Landesamt, 1997). The central thesis voiced in these years was that Baden-Württemberg was affected by a process of path-dependent development which, although very successful in the past, would lead the region’s economy into a potential dead-end street. — Georg Schreyögg and Jörg Sydow, The Hidden Dynamics of Path Dependence, 910

Categorization

• XREF: Directly parallels the book’s founding premise — that ‘history matters’ can entrap as well as enable — and the Grabher Ruhr case cited just below.
• SEED: Possible essay angle: ‘success as substrate’ — the same institutional thickness that produces a model economy also produces its blind spot.