This monthly selection of articles has been carried out by Philippe Gugler and Michael Keller, the Center for Competitiveness, University of Fribourg. A full selection of the previous articles is available here.
The Competitive Advantage of Nations 20 years later: the cases of Sweden, South Korea and the
USA
By : Timothy L. Wilson, Lars Lindbergh and Jens Graff. Competitiveness Review, Volume 24, Issue 4, pp 306 - 331.
Abstract: « The purpose of this paper is to reflect on some policy possibilities and outcomes for three countries of interest suggested in Porter’s The Competitive Advantage of Nations. This research was both exploratory and qualitative in nature and utilized an in-depth case study approach of three major international economies reflecting previous observations in The Competitive Advantage of Nations. Personal contemporaneous observations of individuals in the countries of interest were complemented by current secondary information. The three countries selected for analysis, South Korea, Sweden and the USA, reflected different stages of development at the time The Competitive Advantage of Nations was published and certainly different progress since then. The Competitive Advantage of Nations advocated new, constructive and actionable roles for government and business. These observations can now be tested after a reasonable time of development. In terms of development, Korea would appear to be the star of the group; Sweden has made strong progress in comparison with other members of the European Union. Although there are areas of strength, the USA recently has lost much of the edge it had at the time of the Advantage’s publication.
Clusters, convergence, and economic performance
By : Mercedes Delgado, Michael E. Porter and Scott Stern. Research Policy, Volume 43, Issue10, Pages 1785–1799, 2014.
Abstract: « This paper evaluates the role of regional cluster composition in regional industry performance. On the one hand, diminishing returns to specialization in a location can result in a convergence effect: the growth rate of an industry within a region may be declining in the level of economic activity of that industry. At the same time, positive spillovers across complementary economic activities can provide an impetus for agglomeration: the growth rate of an industry within a region may be increasing in the “strength” (i.e., relative presence) of related industries. Building on Porter (1998, 2003), we develop a systematic empirical framework to analyze the role of regional clusters – groups of closely related industries operating within a particular region – in the growth of regional industries. We exploit data from the US Cluster Mapping Project to examine the effects of agglomeration within regional clusters after controlling for convergence at the region-industry level. Our findings suggest that industries located in a strong cluster register higher employment and patenting growth. Regional industry growth also increases with the strength of related clusters in the region and with the strength of similar clusters in adjacent regions. We also find evidence of the complementarity between employment and innovation performance in regional clusters: both the initial employment and patenting strength of a cluster have a separate positive effect on the employment and patenting growth of the constituent industries. Finally, we find that new regional industries emerge where there is a strong cluster. These findings are consistent with multiple types of externalities arising in clusters, including knowledge, skills, and input–output linkages.» [ABSTRACT FROM AUTHORS]
Institutional Context and Cluster Emergence: The Biogas Industry in Southern Sweden
By : Hanna Martin and Lars Coenen. European Planning Studies, published online, 06 Oct 2014.
Abstract: « According to some scholars in evolutionary economic geography (EEG), the role of (territory-specific) institutions is relatively small for explaining where a new industry emerges and grows as firms develop routines in a path-dependent and idiosyncratic manner. This article evaluates this assertion by studying the evolution of the biogas industry in the region of Scania in Southern Sweden. The biogas is predominantly used as a fuel in the regional transport system and is considered as a crucial means to achieve environmental goals in the region. Recently, regional public policy has been actively promoting this biogas industry, aiming for cluster development. Drawing on literature from EEG and technological innovation systems, this article seeks to unpack the evolutionary process that has led to the emergence of this industry. In particular, it studies to what extent territory-specific institutions have been crucial in that respect. The analysis is case-based, drawing predominantly on in-depth interviews with key stakeholders and firms in the industry. By doing so, the paper seeks to make a contribution to our understanding of cluster development, considering the interplay between technology, industry dynamics and institutions.» [ABSTRACT FROM AUTHORS]
Don’t throw the baby out with the bath water”. Network failures and policy challenges for cluster long run dynamics
By : Jérôme Vicente. Papers in Evolutionary Economic Geography, 14.20, 2014.
Abstract: « Cluster policies have been recently called into question in the aftermath of several empirical evidences. Disentangling how market and network failures arguments play together in cluster policy design, we look for more robust micro foundations of network structuring in clusters. Our aim is to show that, in spite of this growing skepticism, new opportunities for cluster policy exist.They require moving their focus from the “connecting people” one best way that gets through the whole of cluster policy guidelines, to more surgical incentives for R&D collaborations, which favor suited structural properties of local knowledge networks along the life cycle of clusters.» [ABSTRACT FROM AUTHOR]
Enterprise- and Industry-Level Drivers of Cluster Evolution and Their Outcomes for Clusters from Developed and Less-Developed Countries
By : Marta Gancarczyk. European Planning Studies, published online, 02 Oct 2014.
Abstract: « This article aims to discuss the international strategies of lead companies and the modularization of production networks as drivers of cluster evolution in developed countries, and to formulate propositions regarding the impact of those drivers on relationships with clusters in less-developed countries, based on literature reviews. Three streams of literature were combined, namely, that on (1) the role of lead companies in the development of industrial agglomerations, (2) the life cycle and evolution of clusters, founded on evolutionary economic geography and (3) the possibilities of upgrading by suppliers from less-developed countries. The article contributes by proposing a conceptual model that covers internal cluster evolution and the evolution of inter-cluster relationships globally to inform business and policy choices. Moreover, the research gap is addressed to study how the cluster dynamics in developed countries affect the upgrading opportunities for clusters in less-developed countries. The theoretical input consists in using the constructs of knowledge exploration and exploitation as mechanisms that determine cluster development prospects. Cluster development perspectives are shown as determined by those clusters' capacity to jointly pursue knowledge exploration and exploitation activities.» [ABSTRACT FROM AUTHOR]
Innovation drivers, value chains and the geography of multinational corporations in Europe
By : Riccardo Crescenzi, Carlo Pietrobelli and Roberta Rabellotti. Journal of Economic Geography, Volume 14, Issue 6, Pages 1053-1086, 2014.
Abstract : «This paper investigates the geography of multinational corporations’ investments in the EU regions. The ‘traditional’ sources of location advantages (i.e. agglomeration economies, market access and labour market conditions) are considered together with innovation and socio-institutional drivers of investments, captured by means of regional ‘social filter’ conditions. This makes it possible to empirically assess the different role played by such advantages in the location decision of investments at different stages of the value chain and disentangle the differential role of national vs. regional factors. The empirical analysis covers the EU-25 regions and suggests that regional socio-economic conditions are crucially important for the location decisions of investments in the most sophisticated knowledge-intensive stages of the value chain.» [ABSTRACT FROM AUTHORS]
Interfirm networks in periods of technological turbulence and stability
By : Mathijs de Vaan. Research Policy, Volume 43, Issue 10, Pages 1666–1680, 2014.
Abstract: « This paper examines how network relations between firms influence firm survival by explicitly addressing the moderating role of changing technological regimes. Using longitudinal data on 1385 developers and 190 publishers of video games in the global video game industry between 1972 and 2007, the analyses show that the effect of network ties between developers and publishers on the survival probability of developers is moderated by the level of technological turbulence in the industry. The results show that the effect of network partner failure on firm survival is dependent on the strength of ties. The failure of strongly tied network partners harms developers in stable periods and benefits them in turbulent eras, while no such relation is found for weakly tied network partners. Network partner diversity positively affects firm performance in epochs of technological turbulence, while the effect plays no significant role for firm survival in stable settings. The results indicate that the relation between interfirm network relations and firm survival are moderated by sequences of technological renewal in the video game industry which causes the industry to go through an evolution that deviates from the typical S-shaped trajectory found in industries that are characterized by strong path-dependent processes.» [ABSTRACT FROM AUTHOR]
Creative Cluster Evolution: The Case of the Film and TV Industries in Seoul, South Korea
By : Su-Hyun Berg. European Planning Studies, published online, 12 Sep 2014.
Abstract: « Can the concept of co-evolution help to analyse and explain the dynamics of creative industries? This article tackles the question by investigating the film and TV cluster in Seoul, South Korea. The analysis of the 35 semi-structured interviews confirms the dynamics of the film and TV industries in Korea. First, Hallyu began with the export of Korean TV drama series across East Asia. The state deregulation and neo-liberal reforms during the 1990s in Korea boosted an explosion of the export of the Korean film and TV industry. Second, the core of the film and TV productionis concentrated within Seoul, while dispersion of those industries occurred in Gyeong-gi province. Third, from an institutional perspective, tensions between the central government and the film and TV industry can be observed, which have been intensifying since 2006. This paper concludes that particularly co-evolution could potentially be an important concept to explain and analyse dynamics in creative industries.» [ABSTRACT FROM AUTHOR]
The emergence of new technology-based sectors in European regions: A proximity-based analysis of nanotechnology
By : Alessandra Colombelli, Jackie Krafft and Francesco Quatraro. Research Policy, Volume 43, Issue 10, Pages 1681–1696, 2014.
Abstract: « This paper analyzes the emergence of new technology-based sectors at the regional level focusing on nanotechnology, an infant technology whose evolution can be traced on the basis of patent application filings. We employ a methodological framework based on the ‘product-space’ approach, to investigate whether the development of new technologies is linked to the structure of the existing local knowledge base. We conduct a 15 EU country analysis at NUTS 2 level using patent data for 1986–2006. The results of the descriptive and econometric analysis support the idea that history matters in the spatial development of a sector, and that the technological competences accumulated at the local level are likely to shape the future patterns of technological diversification.»
[ABSTRACT FROM AUTHORS]
Do spinoff dynamics or agglomeration externalities drive industry clustering? A reappraisal of Steven Klepper’s work
By : Ron Boschma. Papers in Evolutionary Economic Geography, 14.18, 2014.
Abstract: « Klepper’s theory of industry clustering based on organizational reproduction and inheritance through spinoffs challenged the Marshallian view on industry clustering. The paper provides an assessment of Klepper’s theoretical and empirical work on industry clustering. We explore how ‘new’ his spinoff theory on industry clustering was, and we investigate the impact of Klepper’s theory on the economic geography community. Klepper’s work has inspired especially very recent literature on regional branching that argues that new industries grow out of and recombine capabilities from local related industries. Finally, the paper discusses what questions on industry location are still left open or in need of more evidence in the context of Klepper’s theory.» [ABSTRACT FROM AUTHOR]
The political economy of global production networks: regional industrial change and differential upgrading in the East European clothing industry
By : Adrian Smith, John Pickles, Milan Buček, Rudolf Pástor and Bob Begg. Journal of Economic Geography, Volume 14, Issue 6, Pages 1023-1051, 2014.
Abstract : «Recent years have been testing times for the Eastern European clothing sector. Following two decades of deepening integration into European production networks, the sector has been struggling with the removal of trade quotas, increasing competitive pressures and the global economic crisis. This article takes a long-term view of the trajectories of change in the East European clothing industry drawing on the experience of the Slovak Republic. It examines the regional economic transformations that have resulted, how regional concentrations of clothing production sustained employment during the 1990s, and how tightening competitive pressures have unravelled these regional production systems leading to a differentiated landscape of firm-level upgrading strategies. The article argues that understandings of firm and regional upgrading and downgrading need to be attentive to the role of labour in the tightening landscape of ‘relative competitiveness’ and the political economy of regional integration policies, foreign ownership and the global economic crisis.» [ABSTRACT FROM AUTHORS]
Strategic decoupling, recoupling and global production networks: India’s pharmaceutical industry
By : Rory Horner. Journal of Economic Geography, Volume 14, Issue 6, Pages 1117-1140, 2014.
Abstract : «Contemporary debates on economic globalization have emphasized the development opportunities for the Global South through local firms becoming integrated into the global commodity chains (GCCs), value chains (GVCs) and production networks (GPNs) governed by leading multinational corporations. With increasing attention to the negative sides of integration, an emergent issue is the role of disengagement from, and operation outside of, the GPNs of lead firms. Through the case of the Indian pharmaceutical industry, where a selective and short-term strategic decoupling and subsequent recoupling has played a crucial role in the development of what is now the largest such industry in the Global South, this article explores how decoupling from GPNs may lead to positive development outcomes. The experience of India and the pharmaceutical industry shows that a sequence of decoupling and recoupling can be an alternative to strategic coupling as a route to economic development.» [ABSTRACT FROM AUTHOR]
Global Clusters Of Innovation
Edited by Jerome S. Engel. Edward Elgar Publishing Limited, Cheltenham, UK, 2014.
Abstract: « Entrepreneurship and innovation are the drivers of value creation in the twenty-first century. In the geography of the global economy there are ‘hot spots’ where new technologies germinate at an astounding rate and pools of capital, expertise, and talent foster the development of new industries, and new ways of doing business. These clusters of innovation have key attributes distinct from traditional industrial clusters that allow them to extend beyond geographic boundaries and serve as models for economic expansion in both developed and developing countries. How do these clusters emerge? What is the role of individual institutions such as governments, universities, major corporations, investors, and the individual entrepreneur? Are there systemic underpinnings, an invisible hand, that encourage these communities?The book begins with a presentation of the Clusters of Innovation Framework that identifies the salient components, behaviors, and linkages that characterize an innovation cluster, followed by an analysis of the archetypal cluster, Silicon Valley. Subsequent chapters probe how these characteristics apply in a diverse selection of economic communities in Germany, Belgium, Spain, the United Kingdom, Israel, Japan, Taiwan, China, Colombia, Mexico, and Brazil. Concluding chapters investigate the role of transregional organizations as cross-border disseminators of best practices in entrepreneurship and innovation.Students and professors of economics, business, public policy, management, entrepreneurship, and innovation will find this book a useful resource. Corporate executives, university administrators, government officials, policy makers, and entrepreneurs will also find it an insightful guide.» [ABSTRACT FROM EDITOR]
