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  5. Volume 49, Issue 2 (2026)
  6. From Energy Shock to Social Innovation: ...

Regional Formation and Development Studies

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From Energy Shock to Social Innovation: Geopolitical Crisis, Regional Divergence and Economic Transformation in the Baltic Region
Volume 49, Issue 2 (2026), pp. 19–36
Giuseppe T. Cirella  

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https://doi.org/10.15181/rfds.v49i2.2809
Pub. online: 2 July 2026      Type: Article      Open accessOpen Access

Published
2 July 2026

Abstract

The recent energy crisis triggered by the Russian invasion of Ukraine has profoundly reshaped regional economies across the Baltic
region, transforming energy from a market commodity into a strategic and geopolitical resource. While existing literature emphasises
disruption and vulnerability, this paper reframes the crisis as a catalyst for social innovation. Drawing on a comparative analysis of
Lithuania, Latvia, Estonia and Poland, the study examines how rising energy prices, supply insecurity and policy responses have stimulated
new forms of behavioural adaptation, collective action and institutional change. Particular attention is given to decentralised energy practices, prosumer models and governance innovation. The findings reveal that social innovation emerges unevenly across national contexts, shaped by structural conditions, institutional capacity and geopolitical positioning. The paper argues that energy shocks can function as transformative moments, fostering resilience while also exposing internal divergences within the European Union, and reshaping regional pathways toward sustainability.

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Keywords
energy crisis energy security geopolitics regional development social innovation

JEL CODES
O31 Q41 Q48 R11 R58

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