Research Group Sustainable Economic Dynamics and Innovation

Economic mechanisms and policy instruments are integral components of the multi-form governance of spatial sustainability transformations. Within the market system, instruments such as subsidies or taxes, public investments, or compensation schemes are used to direct production and consumption towards sustainable goods and services and to address the spatial and social inequalities inherent in sustainability transitions. Furthermore, emerging models, such as the circular economy and degrowth strategies, are being tailored to diverse spatial contexts, offering systemic approaches to sustainability. Accordingly, this calls for enhanced metrics and monitoring to measure progress towards sustainability.

The research group “Sustainable Economic Dynamics and Innovation” investigates the role of economic levers as critical components of the transformative capacities of cities and regions. It is building upon findings about complex intra- and interregional interactions between economic sectors, about sustainable economic models, and about forces that determine sustainability-relevant actions of economic actors (e.g. households, companies, municipalities). Special interest is given to factors that determine sustainability-oriented innovations, and the institutionalisation and spatial diffusion of sustainable practices. The aim is to contribute to the development of policy instruments and the necessary tools and evaluation frameworks through inter- and transdisciplinary cooperation.

The research group works with a wide range of approaches, including economic-mathematical modelling, statistical and econometric analysis, surveys, thematic content  and qualitative analysis methods. We develop and use regional input-output models, network methods and computable general equilibrium (CGE) models to determine the effects of environmental shocks, structural changes and policies on local economies. We apply statistical analyses as well as comparative case study evidence to determine causal relationships and intervention levers.

The core research questions are:

• What are the linkages between spatial-economic patterns, regulatory and market pressures, and the transformative capacities of cities and regions?
• How can economic incentives and mechanisms be designed and used to increase the transformative capacities of cities and regions and to direct innovation towards sustainability?