The comparative political economy of the green transition: economic specialisations and skills regimes in Europe

The green transition is fundamentally transforming contemporary economies and societies.

Our Assistant Professor in Political Economy Dr Donato Di Carlo has co-authored a new article in Regulation & Governance with Luca Cigna and Niccolò Durazzi, which investigates how European models of capitalism perform and specialise across the green value chain—conceptualised as innovation, manufacturing, services, and deployment—and how national skill formation systems underpin these specialisations.

Abstract

"Integrating insights from comparative capitalism literatures with descriptive statistics and principal component analysis (PCA), we develop and test expectations about growth regime-specific patterns of green specialization and skill profiles. Our findings reveal marked cross-national variation between green leaders and laggards: Nordic economies characterized by dynamic services and continental manufacturing-based models are frontrunners in the green transition, while Eastern Europe's FDI-led regimes and Southern Europe's demand-led regimes emerge as laggards. Furthermore, PCA results uncover two distinct decarbonization pathways among European green leaders: one group of countries (Austria, Finland, Germany) specializes in green manufacturing, supported by high shares of STEM graduates; another (Denmark, Switzerland, and to a lesser extent Norway and Sweden) focuses on green innovation and dynamic services, sustained by a strong supply of STEM doctorates. This article contributes to political economy debates on the green transition by identifying distinct green specializations and decarbonization pathways across European models of capitalism and by underscoring the growing centrality of high-level STEM skills in the green transition."