Abstract This paper discusses how and in what way different regional industrial development paths emerge through narratives about a natural resource-based industry in a peripheral region. The way in which industries are portrayed can shape how individuals or groups interpret the role of the industry, and thereby foster positive or negative attitudes towards it. We explore the dynamics in the traditional and slow-innovative lumber industry in Norway where digitalisation has recently ‘turned the table’ and contributed to upscaling and renewal of the production process. We identify heterogenic narratives among policy makers and within the industry itself. The pro-innovative narrative articulates a viable source of economic growth in the region and the industry as a key player in the bioeconomy, contrasted with a traditionalist view of the industry as containing low-skilled workers, low innovation performance and strong vulnerability towards extra-regional market changes. We argue that there are important reasons to concentrate on the role of narratives and discursive practices in regional development.

Highlights • The regional industry path development literature has shown limited interest in the lumber industry, and has almost totally overlooked the industry from a narrative approach in connection to the periphery. • The way in which industries are portrayed can shape how individuals or groups interpret the role of the industry, and foster positive or negative attitudes towards it. • The pro-innovative narrative articulates a viable source of economic growth in the region and the industry as a key player in the bioeconomy, contrasted with a traditionalist view of the industry as containing low-skilled workers, low innovation performance and strong vulnerability towards extra-regional market changes. • The traditional con-narrative raises the threshold (or hinders it) for innovation capability in the region by highlighting problematic issues for the lumber industry through its reputation. The con-narrative highlights important barriers for renewal, and the role of institutional lock-ins is essential to understand this in greater depth. However, the analysis demonstrates that the progressive approach and innovation narrative lower the threshold and facilitate innovative capability in rural regions by highlighting enabling factors upon which regional business sectors rely. • Possible new development paths are disputed even among the firms belonging to the same sector and operating in the same geographical area. Hence, tackling the topic of narratives and power relations when studying regional development dynamics is important.