The study by Koen Frenken, Frank Van Oort, and Thijs Verburg (2007) examines the relationship between related and unrelated variety and regional economic growth. It distinguishes between two types of variety: related variety, which refers to the diversity within sectors, and unrelated variety, which refers to diversity between sectors. The study argues that related variety is associated with Jacobs externalities, which are knowledge spillovers that enhance employment growth, while unrelated variety is associated with portfolio effects that reduce unemployment growth. The authors use entropy measures to calculate related and unrelated variety at the NUTS 3 level in the Netherlands for the period 1996–2002. They find that related variety positively affects employment growth, while unrelated variety negatively affects unemployment growth. Productivity growth is explained by traditional determinants such as investment and R&D expenditures. The study also considers the effects of localization economies and urbanization economies, which are associated with productivity growth. The results show that related variety is a main driver of employment growth, while unrelated variety helps to protect regions from unemployment shocks. The study concludes that related variety is an important factor in regional economic growth, and that policy should focus on promoting related variety to enhance employment growth.The study by Koen Frenken, Frank Van Oort, and Thijs Verburg (2007) examines the relationship between related and unrelated variety and regional economic growth. It distinguishes between two types of variety: related variety, which refers to the diversity within sectors, and unrelated variety, which refers to diversity between sectors. The study argues that related variety is associated with Jacobs externalities, which are knowledge spillovers that enhance employment growth, while unrelated variety is associated with portfolio effects that reduce unemployment growth. The authors use entropy measures to calculate related and unrelated variety at the NUTS 3 level in the Netherlands for the period 1996–2002. They find that related variety positively affects employment growth, while unrelated variety negatively affects unemployment growth. Productivity growth is explained by traditional determinants such as investment and R&D expenditures. The study also considers the effects of localization economies and urbanization economies, which are associated with productivity growth. The results show that related variety is a main driver of employment growth, while unrelated variety helps to protect regions from unemployment shocks. The study concludes that related variety is an important factor in regional economic growth, and that policy should focus on promoting related variety to enhance employment growth.