Lise Meitner grant of the Austrian Science Fund (FWF), Grant number M-2992, 2021-2023

How do regional economies develop differently, even within the same country and under the same policies? This is the basic question the research project on industrial-institutional co-evolution addresses by looking at the role of institutions such as mutual trust in business relationships, entrepreneurial attitudes, or entrepreneurs' inclination to cooperate. At the same time, the role of individuals and their decisions in shaping these institutions is examined. The research design focuses on three regional economies in Israel, a country that has seen the rise a dynamic entrepreneurial scene during the past decades. The coastal city of Haifa is a traditional industrial center whose service sector is evolving. In the Northern city of Nazareth, a young scene of Arab entrepreneurs in the information and communication technology industry has emerged. Be'er Sheva in the Negev desert is developing into an important cybersecurity cluster. Together, these three empirical case studies allow for conclusions on how the same macro-level context can lead to different patterns of regional development and for why the impact of national policies differs between regions. In addition and partly drawing on earlier research, institutional foundations of path development in tourism in Israel are analyzed. Further, the inclusion of minorities into patterns of innovation and entrepreneurship is examined.