This monthly selection of articles has been carried out by Philippe Gugler and Damiano Lepori, the Center for Competitiveness, University of Fribourg. The entire selection, carried out since 2013, can be consulted on the academic articles page of our web.

Entrepreneurs and Cluster Evolution: The Transformation of Toronto’s ICT  Cluster

By: S. Denney, T. Southin, D. Wolfe. University of Toronto, Munk School of Global Affairs & Public Policy, Innovation Policy Lab, Working Paper No. 2020-02, 2020.

Abstract: “Interest in ICT clusters has long been sustained by the power of emerging technologies to reinvent regional or local economies. Prior research has identified the structural conditions under which clusters form, decline, or evolve, but much less is known about the agents responsible for cluster change. This article examines the evolution of the Toronto ICT cluster from a home base for multinational firms in hardware and telecommunications into a more dynamic ecosystem for service-based domestic start-ups and emerging scale-ups. It contributes to the literature on clusters by showing how entrepreneurs have driven cluster evolution in Toronto.” [ABSTRACT FROM AUTHORS]

Are New Shopping Centers Drivers of Development in Large Metropolitan  Suburbs? The Interplay of Agglomeration and Competition Forces

By: O. Mihaescu, M. Korpi, Ö. Öner. Näringslivets forskningsinstitut, Ratio, Working Paper No. 332, 2020.

Abstract: “We investigate to which extent shopping centers drive local economic development by studying how distance to newly established shopping centers affects the performance of incumbent firms, located in the suburbs of the three Swedish major metropolitan areas Stockholm, Gothenburg, and Malmö, 2000-2016. We use a regression setup with around 27,000 firm-year observations and explore the possible heterogeneity imposed on the results from two main elements of spatial economics theory: the size of the new retail area and the distance from the new retail area to the analyzed incumbents. We observe a clear difference in the direction of the effects of large versus small shopping centers. While competition forces are much stronger in the case of the establishment of large shopping centers, yielding a negative 5% on incumbent firm revenue and negative 3% on firm employment, results indicate the opposite pattern for smaller shopping centers; with firm revenue and firm employment increasing 4% and 3%, respectively. Moreover, we also observe that both agglomeration and competition effects attenuate sharply with distance from the new entrant, confirming one of the central premises of retail location theory. Finally, we observe that the geographical scope of the effects is much wider in the case of larger shopping centers, with estimates becoming statistically insignificant at about 9-10 km from the new entry, as compared to 3-4 km in the case of smaller retail centers.” [ABSTRACT FROM AUTHORS]

Complementary Inter-Regional Linkages and Smart Specialization: an  Empirical Study on European Regions

By: P.-A. Balland, Ron Boschma. Utrecht University, Human Geography and Planning, Papers in Evolutionary Economic Geography, No. 20.23, 2020.

Abstract: “Regional capabilities are regarded a pillar of Smart Specialization Strategy (S3). There is yet little focus in S3 policy on the role of inter-regional linkages. Our study on 292 NUTS2 regions in Europe finds that inter-regional linkages have a positive effect on the probability of regions to diversify, especially in peripheral regions. What matters is not being connected to other regions per se but being connected to regions that provide complementary capabilities. Finally, we propose a new indicator that enables regions to identify other regions as strategic partners in their S3 policy, depending on the presence of complementary capabilities in other regions.” [ABSTRACT FROM AUTHORS]

Sinking or swimming in the cluster labor pool? A firm-specific analysis  of the effect of specialized labour

By: N. Grashof. Friedrich-Schiller-Universität Jena, Jena Economic Research Paper, No. 2020-006, 2020.

Abstract: “Human resources are a key factor for firm success, particularly nowadays when most industrial economies face an increasing shortage of qualified labour. With their pooled labour markets, regional clusters have been shown to be a preferable location for firms in order to satisfy their demand for skilled employees. Nevertheless, in light of possible disadvantages (e.g. labour poaching) and the broad field of studies dealing with firm performance differentials, the prevalent assumption that all companies profit equally from the specialized labour pool in clusters must be questioned. Consequently, the aim of this paper is to empirically investigate the conditions and mechanisms through which companies located in clusters can gain, in terms of innovativeness, from the specialized labour pool. By synthesizing theoretical streams from the strategic management (e.g. resource-based view) and the economic geography literature (e.g. cluster approach), variables from three different levels of analysis (micro-level, meso-level and macro- level) are examined separately as well as interactively. Apart from revealing that being located in a cluster indeed increases on average firm innovativeness, one of the central findings is that firms benefit unequally within the cluster environment depending on the specific firm-level, cluster-level, industry-/market-level conditions and their respective interactions.” [ABSTRACT FROM AUTHOR]

Factors influencing the potential of European Higher Education  Institutions to contribute to innovation and regional development

By: J. Edwards, E. Arregui-Pabollet, F. Biagi, K. Jonkers. European Commission, JRC Science for Policy Report, doi:10.2760/586266, 2020.

Abstract: “This Science for Policy Report analyses the main factors influencing the potential of Higher Education Institutions to contribute to innovation and regional development. The analysis is structured around two groups of factors: The supply of knowledge and skills through education, research and external engagement, and the demand side concerning the ability of regional actors to absorb it. The report draws on both qualitative and quantitative data, including two sets of case studies from JRC projects related to the regional impact of universities and the role of HEIs in Smart Specialisation Strategies (S3), as well as a recent econometric study that compares flows of human capital and knowledge from HEIs with firm location. The report is part of the Commission's Knowledge Hub for Higher Education at the JRC which brings together a number of tools including University Multi Rank, from which data is analysed in this report.” [ABSTRACT FROM AUTHORS]

STI and DUI innovation modes in micro-,small-,medium-and large-sized  firms: distinctive patterns across Europe and the U.S.

By: M. D. Parrilli, D. Radicic. European Planning Studies, DOI: 10.1080/09654313.2020.1754343, 2020.

Abstract: “A growing literature discusses the effectiveness of business innovation modes on innovation performance. In particular, the innovation mode based on the application of science and technology drivers -STI- (e.g. R&D; collaboration with universities) is analysed and compared to the mode based on learning-by- doing, by-using and by-interacting -DUI- (e.g. teamwork, collaboration with suppliers). These modes express the archetypical strategies firms use to innovate. The literature has long identified specificities of small and medium-sized enterprises (SMEs). However, in this study we segment this group of enterprises and inquire the peculiar innovation modes adopted by these firms as we expect SMEs to be less homogeneous than typically expected. Here, we distinguish between internal STI and DUI drivers, and external STI and DUI drivers as we expect firms of different sizes to compete through different combinations of drivers. Complementarily, we investigate the impact of these drivers on innovation output across these types of firms. The results show the effective adoption of internal STI drivers across micro/small firms, and the well-rounded approach taken by medium-sized firms. Large firms show a more limited effectiveness of external STI and DUI drivers, which seems to be linked to a selective approach to innovation.” [ABSTRACT FROM AUTHORS]

Six additional questions about smart specialization: implication for  regional innovation policy 4.0

By: M. Benner. European Planning Studies, DOI: 10.1080/09654313.2020.1764506, 2020.

Abstract: “In response to the article ‘Six critical questions about smart specialization’ and Dominique Foray’s reply to that article, this paper identifies several more questions to be asked about the smart specialization approach and its implementation under EU cohesion policy in recent years. The paper argues that in addition to the critical points identified earlier, the smart specialization discourse has become overly focused on research and development, suffers from an unclear understanding of appropriate spatial scales, focuses too much on brands and policy documents and too little on process which leads to a number of crucial implementation challenges. The paper suggests refocusing the next, fourth generation of regional innovation strategies under EU cohesion policy towards a more heterogeneous paradigm that draws conclusions from the procedural progress made during the smart specialization era so far but allows for more situated experimentation within regions.” [ABSTRACT FROM AUTHOR]

Industrial diversity in building units and factors associated with diversity:  A case study of the Seoul Metropolitan Area

By: J.-I. Park. Research Policy, Vol. 49, Iss. 5, 2020.

Abstract: “Whereas previous studies have not paid much attention to spatial units in buildings, and have merely measured diversity at the regional level, this study aims to calculate the industrial diversity in building units in the Seoul Metropolitan Area and examine the factors associated with such diversity using the multi-level model method. The results show that a vertical factory is an important industrial zone correlated strongly to diversity in building spaces. Industrial composition also positively associated with diversity. Industrial diversity tends to increase in technology-intensive industries, but decreases in traditional ones. Furthermore, this study reveals a pattern in which buildings with high diversity are spatially clustered in certain areas. Meanwhile, industrial parks have a negative association with diversity. High land prices also hinder the agglomeration of industries that aim for urban location, and may ultimately have a negative association with diversity.” [ABSTRACT FROM AUTHOR]