Cross-specialization and structural holes: The case of the Dutch Topsectors

In this paper we discuss how an economies’ established stronghold industries can form a basis for sustaining competiveness. As changing market circumstances demand industries to stay adaptive, their knowledge bases need to be enriched with knowledge that is uncommon to the industry itself, yet sufficiently familiar for being properly absorbed. Inspired by insights from evolutionary economic geography, we argue why rather than (only) supporting related variety, policy makers should ‘crossspecialize’ by creating linkages between strong but disparate industries. We distinguish three forms of cross-specialization, each of them describing how new economic activities can be achieved by converging the knowledge bases of disparate industries. One of the cross-specialization forms pertains to supporting industries at the interface of such unrelated industries. As these cross-over industries consist of parties able to communicate with both of the unrelated specializations, they are an obvious target for policy interventions aimed at closing structural holes in the industry space. Looking at the case of the Dutch Topsectors, we describe how cross-over industries can be identified. We use skill-relatedness and employment data to construct the Dutch industry space, and apply network analytics for calculating cross-over centrality measures. We conclude by discussing research and policy implications.