Very Important Final Paper-7pages

LOCALIZATION  AND  CLUSTERS

3.1  INTS  2370

Or  not?

Not  being  there:  why  local  innovation  is  not  (always)   related  to  local  factors

• Lundvall:  access  to  “an  appropriate  institutional  and  cultural   framework  to  enable  interactive  learning”

• Metropolitan  areas:  agglomeration,  lower  transport  costs,  and   technological  change

• Innovation  systems  are  not  free  standing…  connected  through   pipelines

• “Innovation  activity  is  not  connected  to  the  local  environment   but  depends  upon  access to  locations  which  are  high-­‐points  of   interaction  and  entry  points  to  global  networks”

• Policy  implications:  improve  interactions  vs.  access  (or  both)

A  Geography  of  Innovation

Large   City

Large   City

Pipeline

Small   City

Small   City

Small   City

Small   City

=  Establishment

Clusters  and   the  New Economics  of   Competition

Porter  on  Clusters

• Clusters:  “critical  masses—in  one  place—of  unusual  competitive   success  in  particular  fields”

• Paradox:  comparative  advantage  has  limits.  Localization  matters   most  for  enhancing  productivity  and  innovation

• Institutions:  governmental,  universities,  vocational  training,   standards-­‐setting,  and  trade  associations

• Extends  to  all  industries:  there  are  no  “low-­‐tech  industries”  just   “low-­‐tech  firms”

Porter  on  Clusters:  What  matters

• Linkages  and  complementarities across  industries  and  institutions • Competition  coexisting  with  cooperation  because  interaction   occurs  along  different  dimensions  and  among  different  players

• Local  reputation  is  key  – lowers  risk,  increases  information  flows • “A  cluster  allows  each  member  to  benefit  as  if it  had  greater  scale   or  as  if  it  had  joined  with  others  without  sacrificing  its  flexibility.”

• Still,  some  clusters  are  “closed”  and  sustaining  the  system   becomes  increasingly  difficult

Porter  on  Clusters:  Birth,  Evolution,  and  Decline

• Origins  due  to  historical  circumstances  (i.e.  path  dependency) • Importance  of  signaling  in  driving  growth,  especially  amongst   disparate  clusters/  industries/  actors

• Importance  of  “home  base”  for  key  functions  (e.g.  strategy,  R&D,   marketing)

• Mature  clusters  risk  overconsolidation,  groupthink,  cartels,   regulatory  inflexibility,  stagnate  education  institutions,  etc.

• BUT,  tech  continues  to  disrupt  as  it  always  has • Prospects  for  poor  communities  and  the  developing  world?

So  if  clusters  can  occur  anywhere,  why  do   some  develop  and  others  not?

So  if  clusters  can  occur  anywhere,  why  do   some  develop  and  others  not?

Which  institutions  facilitate  cluster   formation  and  which  do  not?

The  Short  Life  and  Speedy  Death  of  Russia’s  Silicon  Valley

Vewiser Dixon's  ambitious  vision:   make  inner-­‐city  Kansas  City  a   'black  Silicon  Valley'

Building  the  Stanford  of  Denver  at   the  speed  of  an  entrepreneur