Construction of Regional Advantage: Top-Down or Bottom-up

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Construction of Regional Advantage Top-Down or
Bottom-up

• DIMETIC PhD course
• 10 October 2007 (3), Maastricht
• Bent Dalum
• DRUID/IKE , Dep. of Business Studies, CTIF
  Aalborg University

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Basic approaches

• Comparative advantage
• Ricardo, Heckscher-Ohlin, etc.
• Competitive advantage
• Krugman, etc.
• Porter
• Constructed advantage
• Best (2001)
• Cook Leydesdorff (2006)
• Etzkowitzs (2002) history of MIT
• etc. etc.

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Feldman and Martin (1) Constructing
jurisdictional advantage

• Region cluster jurisdiction.
• Cluster spatially defined epistemic
  communities of common interest (p. 1237).
• Jurisdiction focused at the city-region,
  because the literature on clustering and
  agglomeration increasingly points to the
  importance of small and compact geographic units
  (p. 1239).

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Feldman and Martin (2) Two outer poles

1. Aggressive central planning
2. Straight-forward laissez faire

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Feldman and Martin (3) On Silicon Valley

• Even The Valley (the paragon of a jurisdiction
  driven by free market forces) would never have
  reached its present level without massive
  investments by governments in higher education
  and research focused at various segments of the
  electronics industry.

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Feldman and Martin (4) The role of policies

• Previous work on clusters has emphasized the
  random nature of geographical location (p.
  1247). Krugman (1991) in more general Klepper on
  e.g. Detroit.
• In contrast we argue that clusters may be
  constructed (emphasis_BD), but not in the way
  that policy typically proceeds by targeting an
  industry that is poised to take off in another
  location. Instead we argue that policy may be
  fruitfully employed by building upon unique
  place-specific assets (p. 1247).

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Gertler and Wolfe (2006) in the Cluster Genesis
book ed. by Feldman and Braunerhjelm

• once a regional cluster establishes itself as
  an early successits chances for continued growth
  tend to be high
• And vice versa if a cluster has embarked on a
  downward trend

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Future strategies for North Jutland

• How to learn to cope with schizophrenia
• At the one hand several industries are threatened
  by globalization, not least in North Jutland
• On the other hand, several opportunities have
  emerged in the high tech fields
• These opportunities did not pop-up as mere
  results of market forces, and they are not
  results of very specific policies neither.
• But some bold efforts in the region have paid
  off establishment of a university, CPK and CTIF,
  a science park, the thrust towards creating a
  university hospital-like institutional
  framework,.

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Carlsson (2006) in the Cluster Genesis book ed.
by Feldman and Braunerhjelm

• Public policy has played an important role in all
  but two cases treated in the book
• - Hollywood
• - Detroit
• Government funded research of core importance
• - Defense Silicon Valley
• - Health Capitol Region (Washington)
• Policy intentional, but not sector specific
• -Ireland, Research Triangle Park (North
  Carolina)
• Policy intentional and sector specific
• -Israel, China

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The Eisebiths (1) Cluster definition

• A regional agglomeration of sector value chain
  related firms and other organizations (like
  universities, RD centres, public agencies) which
  derive economic advantage from co-location and
  collaboration (p. 1251).

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The Eisebiths (2) Cluster promotion

• any coordinated set of measures,,that supports
  the development of regional industrial
  agglomeration towards ideal features in terms of
  specialized, competitive, collaborative and
  collectively innovative set of sector related
  industries, research/education and other
  organizations (p. 1252).

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The Eisebiths (3) Classification of initiatives

• Explicit top-down ET. Typically targeted public
  intervention. Case ACStyria Automotive Cluster
  of Styria in Austria.
• Implicit bottom-up IB. Typically private and
  market led. Case Car e.V. Car e.V.
  Aachen/Euregio Maas Rhein.

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The Eisebiths (4) Implications of cluster
promotion in four areas

• Institutional genesis and composition of the
  actor group.
• Structure of finance and decision making.
• Preferred target areas and support. Measures.
• Effects on innovativeness and competitiveness.

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The Eisebiths (5) Four dimensions of cluster
promotion

• The issue of scale.
• Regional preconditions.
• Cluster life-cycle phases.
• Sector specificity.