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The resilience of a region depends crucially on the extent to which industry-specific human capital can be redeployed across regional economy's industries. To this end, we present a toolbox to analyze a region's industrial structure, development prospects and economic resilience that highlights the human capital similarities, or skill-relatedness, among industries. The core of these analyses is the so-called industry space, a network that connects industries with similar human capital requirements. In a case study, we use this toolbox to identify the risks and opportunities for the economic perspectives and resilience of Germany's state Saarland based on the time period 2008 to 2012. This analysis shows that one important concern for this former old-industrial region is that its traditional manufacturing base is almost unconnected in terms of skill-relatedness to the emerging high-technology activities that are central in the region's innovation agenda.

Abstract
The capability framework in evolutionary economic geography views regional economic development as a process of related diversification through the acquisition of capabilities that render a regional economy more complex. Using this framework, we synthesize seven theoretical notions that hitherto remained rather disconnected: relatedness, complementarity, variety, complexity, diversification, agents of structural change and related variety. We formulate a constructive critique of the capability framework, relaxing the overly restrictive assumption that the presence of capabilities in a region is both necessary and sufficient for complex products to be produced in a region. Instead, we argue that the complexity of a regional economy depends primarily on the institutions that support firms to coordinate production in complex value chains within and across regions. The augmented framework allows for closer integration of evolutionary and relational approaches in economic geography, providing new links between the literature on clusters, innovation systems and global production networks.

Establishment closures have lasting negative consequences for the workers they displace from their jobs. We study how these consequences vary with the amount of skill mismatch that workers experience after job displacement. Developing new measures of occupational skill redundancy and skill shortage, we analyze the work histories of individuals in Germany between 1975 and 2010. We estimate difference-in-differences models, using a sample of displaced workers who are matched to statistically similar non-displaced workers. We find that displacements increase the probability of occupational change eleven-fold. Moreover, the magnitude of post-displacement earnings losses strongly depends on the type of skill mismatch that workers experience in such job switches. Whereas skill shortages are associated with relatively quick returns to the counterfactual earnings trajectories that displaced workers would have experienced absent displacement, skill redundancy sets displaced workers on paths with permanently lower earnings. We show that these differences can be attributed to differences in mismatch after displacement, and not to intrinsic differences between workers making different post-displacement career choices.

This paper investigates the changing roles of agglomeration externalities along the industry life cycle. We argue that industries have different agglomeration needs in different stages of their life cycles because their mode of competition, innovation intensity, and characteristics of learning opportunities change over time. For 12 Swedish manufacturing industries, we determined for each year between 1974 and 2004 whether the industry was in a young, intermediate, or mature stage. Whereas MAR externalities steadily increased with the maturity of industries, the effect of local diversity (Jacobs' externalities) was positive for young industries but declined and even became negative for more mature industries.