The Elusive Concept of Localization Economies: Towards a Knowledge-Based Theory of Spatial Clustering

Abstract

Introduction: economic geography in a knowledge-based economy The process of globalization is often associated with the`unbundling' of the previous relationship between sovereignty, territoriality, and state power and, as a consequence, with steadily weakening nation-states (Ruggie, 1993). Yet it is arguably the gradual shift in the basis of industrial competitiveness from static price competition towards dynamic improvement that has contributed most in making globalization the favourite business buzzword at the recent turn of the century. The shift has favoured firms that are better able to innovate and create knowledge than their competitors and has thus moved the competitive edge of an increasing number of firms from cost reduction to the generation of entrepreneurial rents (Spender, 1994).The creation of knowledge is usually seen as a process requiring dedicated investment. At the level of the individual firm, knowledge-creating investments are often associated with research and development activities and with the adoption of leadingedge technology. Equally important, however, is the investment in`low-tech' learning and innovation (Maskell, 1998), which takes place when firms, in fairly traditional industries, learn and innovate while handling and developing mundane day-to-day operations such as resource management, logistics, production organization, marketing, sales, distribution, and industrial relations (Malerba, 1992).It may well be that spatial clustering always contributed to economic growth by enhancing learning processes, but the shift towards a knowledge-based economy has certainly amplified our interest in understanding the nature of this proposition. This had led some scholars to propose that the localized cluster is the territorial configuration most likely to enhance learning processes. Today Silicon Valley and Hollywood

Spatial concentration and location dynamics in logistics: the case of a Dutch province

“…This is not caused by communication costs (Laserre, 2008), but by the need to create trust and understanding between the cooperative firms, which in turn depends on language, shared values, and culture. Malmberg and Maskell (2002) suggest that spatial attributes of interactive learning and innovation processes are starting points of many spatial agglomerations. However, the central role of regional knowledge networks has also been critized (Lorentzen, 2008) and it has become clear that distant knowledge sources may be equally or even more relevant as 'local buzz' (see e.g.…”

Cluster Life Cycles - Dimensions and Rationales of Cluster Development

“…As the properties of functioning clusters are well-known (MALMBERG and MASKELL, 2002;ENRIGHT, 2003), we concentrate on the presentation of results on the emergence and decline of clusters.…”

“…These two reciprocal effects are especially applicable to clusters. Companies in a cluster are connected to other companies and institutions of the cluster through various exchange relations and mutual interdependencies (PORTER, 1998;MALMBERG and MASKELL, 2002). As a result, the individual companies and their innovative capabilities are affected by the actions and behaviour of other companies and actors of the cluster and, in turn, each individual company and its actions affects the possibilities of other companies to make use of the knowledge.…”

“…As a result, the evolution of clusters is marked by a continual bridging of technological distances between companies and subsequent adjustment towards each other. When companies tend to move in the direction of other companies within the cluster, especially towards successful companies and the cluster's dominant design (ABERNATHY andUTTERBACK, 1978, MALMBERG andMASKELL, 2002), everything else being equal, the technological distance between companies and the heterogeneity of the cluster decrease accordingly.…”

Postsuburban Spatial Evolution of Vienna's Urban Fringe: Evidence from Point Process Modeling

“…But beyond this initial 3 km, the locations show significant clustering through the farthest distance of 20 km. From an economic geography perspective, this means that spatial proximity matters and, following Malmberg and Maskell (2002), that density can boost localized learning and the innovation process. In particular, agglomeration economies foster face-to-face contacts and the creation, exchange, and diffusion of ideas and knowledge, which are essential in such clustering (Storper and Venables, 2004).…”