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This article casts light on the development of new regional industrial paths. We explore factors explaining why regional industries with similar early path development trajectories may exhibit diverging outcomes in the longer run and pay particular attention to the role of 'outsiders' in the initiation and further development of regional industrial paths. Drawing on a comparative case study of IT industries in Linköping and Karlskrona, two medium-sized Swedish city regions, we find that the inflow of outsiders was an important driver of early path development processes. However, we find that the interplay between regional preconditions and arriving outsiders, and between outsiders and existing actors, substantially shaped the long-term sustainability of the industrial paths in our study. In particular, the role of agency in fostering positive self-reinforcing mechanisms and structure–agency dynamics are highlighted as key factors for understanding how new industrial development paths are unfolding in the longer term. [ABSTRACT FROM AUTHOR]