Title: CRED Seminar Series 20067 REVISITING CLUSTERS: LOCAL BUZZ, GLOBAL PIPELINES AND THE KNOWLEDGE ECONOM
1CRED Seminar Series 2006-7REVISITING
CLUSTERS LOCAL BUZZ, GLOBAL PIPELINES AND THE
KNOWLEDGE ECONOMY
- Frank Peck
- Research Director
- Centre for Regional Economic Development
- UCLan, Carlisle
2REVISITING CLUSTERS LOCAL BUZZ, GLOBAL
PIPELINES AND THE KNOWLEDGE ECONOMY
- Theoretical bases of regional clusters
- Cluster into action overview of regional
strategies - Evaluation and critique of clusters approaches
3Definitions of regional clusters
- Regional cluster geographical concentrations
of economic activities that benefit from
competitive advantages through co-location - Key distinction
- Sector firms classified according to
similarities in products, technologies or markets - Cluster firms grouped according to association
and interdependence almost inevitably
cross-sector - Key point of argument close proximity of
producers gives rise to shared advantages that
can generate or contribute towards global
competitiveness
4Theoretical bases of regional clusters
conceptualisations of local buzz
- Agglomeration and external economies of scale
- Networks, mutual trust and social capital
(Granovetter, Putnam) - Innovation and learning processes (Lundvall)
5Schools of thought in clusters literature
- Industrial districts and the California school
Scott, Storper - Networked economy and the Scandinavian school of
Hakansson, Isaksen, Asheim, Malmberg - Innovative Milieux of Camagni, Maillat, Bergman,
Todling - Michael Porters clusters
62. Cluster into action overview of regional
strategies
7 Identifying and mapping regional clusters
- Methods
- Industry input-output tables
- Location quotients to show geographic
concentration - Surveys and in-depth interviews
- Consultations with regional partners
8National Comparisons
- Finland inter-industry linkages 9 national
clusters - UK Location quotients generate 154
possibilities winnowed down by regional
consultation - Denmark in depth interviews generates 13
regional clusters - Norway location quotients and minimum scale
criteria 62 regional clusters - Netherlands inter-industry linkages 12 linked
industry groups - Italy included high in SMEs in definition
of industrial districts 199 clusters
9Examples of regional clusters
- Austria includes biotechnology and medical
science in Vienna, wood furniture in upper
Austria - Belgium - Flanders multimedia, Flemish plastics
- Finland - Shipbuilding in Turku, high technology
in Oulu - Germany - Ruhr chemicals and media industries in
Rhine-Westphalia - Norway - electronics in Horten Shipbuilding at
Sunnmore - Spain Machine tools in Basque Country and shoe
manufacture in Vinapolo Valley
10Source Emiliano Duch, Cluster Policies Experience
11Source Emiliano Duch, Cluster Policies Experience
12Stages in Development of Cluster Strategies
13Analysis of Cluster
14 15Cluster interventions
- Shift in focus away from support for individual
firms towards systems or networks of linked firms - Less emphasis on large firms and stress on SMEs
or firms of all sizes - Less interest in mobile investment (though this
is still an element) and shift in focus towards
indigenous development - More sophisticated methods for targeting
assistance on groups of firms with growth
potential - Greater emphasis on role of government as
facilitator of business networks and broker
between firms and other public and private
institutions -
16Types of interventions
- New technology (establish centres and institutes
for technology transfer) - Firm growth (incubators, assistance to target
firms) - Cluster analysis (create observatories, conduct
audits) - Labour supply (pump-prime relevant provision of
management and technical training, skills
alliances) - Supply of capital (financing for spin-off
companies) - Network improvement (fund activities to extend
personal and organisational networks) - Cluster leadership (map competencies and motivate
regional partnership processes) - Infrastructure (develop new shared ICT
infrastructure) - Marketing (create shared regional cluster brand)
17Regional variations in cluster interventions
- Belgium - Financial subsidies to encourage SME
growth Centres of excellence based on emerging
technologies - Sweden - RD cooperation development of shared
research centres - Switzerland emphasis on ICT integration
- Spain funding for public and private research
centres and science parks - Austria emphasis on collaborative arrangements
between public and private sector including use
of public procurement
18Success factors in European Clusters
- Networking and partnership 78
- Innovation technology 75
- Human Capital 73
- Physical infrastructure 42
- Role of lead firms 40
- Enterprise and Entrepreneurship 38
- Access to finance 35
- Specialisation 29
- Access to markets 27
- Access to business support 25
- ECOTEC Survey cited by DTI (2005) identifying
each factor
193. Evaluation and critique of clusters
approaches
20Clusters issues to resolve
- Understanding change over time the life cycle
of a cluster and path dependency - Conceptualising the relationship between local
buzz and global pipelines - Relationship between the new and the re-working
of old knowledge in peripheral economies
21The life cycle of clusters
- Clusters literature does refer to concept of
life cycle but fairly rudimentary analysis - Emerging cluster beginnings of cooperation
- Developing cluster new actors and linkages,
formal and informal networks - Mature cluster reach critical mass
- Transformation to avoid stagnation, need to
introduce new markets, new technologies and
process changes
22Sustainability of clusters
- Strategies to support existing clusters makes
regions vulnerable due to specialisation - Attempts to build formal networks with
institutions and key firms as hubs can create
inflexibility and rigidities (e.g. supply
rationalisation and de-regionalisation in
Baden-Wurtemberg Hudson 2003) - Changes in global competition can de-stabilise
clusters (Third Italy hollowed out by corporate
restructuring and relocation of labour intensive
processes Hudson 2003). - The same processes that produce competitive
clusters can also destroy them - history shows
this - Local clustering is advantageous other things
being equal but this is often not the case and
conditions in one time period are poor predictors
of subsequent ones
23Path dependency and lock-in
- Trajectories of regional economies
arepath-dependent - Economic trajectories of regions are neither
pre-determined nor random walks (Hayter 2005) - Variation can occur in evolution of a development
path small events at the start, chance,
randomness - Over time, an almost irreversible lock-in results
- Lock-in influences all subsequent forms of
development as history becomes the raw material
for a new dynamic Boschma Lambooy 1999) - Ideas reminiscent of Massey (1979) combinations
of layers of investment ALSO Myrdals (1957)
cumulative causation model - Idea of transformation is relevant, but many such
events are the product of crises with short term
costs that are not easy to navigate
24Fixation with the local?
- DTI recently issued its Guide to Clusters
(2005) - Clear focus on local connections
- Access to regionally- based expertise
- Enables companies to collaborate locally in
purchasing, marketing, financing - Groups of companies can bid for larger contracts
- Small companies can benefit from local external
economies of scale - Do not deny any of these BUT not a sufficient
basis for competitiveness and may in some
circumstances even be detrimental
25Conceptualising global pipelines
- Recent research begins to show the significance
of global networks for sustaining local clusters
(Bathelt, Malmberg and Maskell 2004) - Pipelines channels used for distant interaction
- Local buzz frequent, broad, unstructured,
automatic, free access - Global pipelines Purposive, conscious effort
and decision, carefully filtered, requires
investment - Indiscriminate local networking initiatives can
divert attention of key cluster champions away
from engagement in global networking - Global pipelines - individual firms with capacity
to do so access knowledge from elsewhere - Spill-over effects into the local cluster vital
means of renewing and reworking local knowledge
26New and old knowledge in cluster development
- Problem of path-dependency and lock-in
particularly applies to use of cluster policies
in less-favoured regions - Hospers (2005) argues that there is a tendency to
believe that clusters must be trendy and high
tech to be credible and worthwhile as investment - Hospers calls for better understanding of old
industries and relationships between low and high
technology - Danish furniture
- Italian textiles
- Heritage in the Ruhr
- Spa health tourism in Hungary
27Old and new in Nord Pas de Calais
- Cities of Lille Roubaix in Northern France
- 19th century dominated by cotton textiles
- 1960s/70s crisis of fordist mass production
- Basis for renewed economy laid in 1920s/30s
Mail order companies set up (La Redoute, Les
Trois Suisses) - 1980s specialised service cluster based on mail
order houses and retail chains almost too much
of a coincidence that a textiles sales based
industry could simply and spontaneously emerge in
the former heartland of the French textile
sector (Liefooghe 2005) - Now a major selling cluster with designers,
printers, photo studios, logistics providers,
advertising agencies, call centres, accounts
management software developers - Major companies engaged in international
networking
28Conclusion
- Path dependency and lock-in
- Preoccupation with local and insufficient clarity
about significance of non-local networks - Overlook opportunities to re-work old knowledge
in combinations with new technologies - Relevance to Cumbria?