This monthly selection of articles is been carried out by Philippe Gugler and Basile de Raemy, from 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.

Cluster: semantically different yet  a panacea for achieving resilient competitiveness

By: P. Bhawsar. Competitiveness review, DOI: 10.1108/CR-10-2021-0140, August 2023.

Abstract: “Purpose - The paper aims to relook at the notion of competitiveness in the challenging times of pandemic. The failure of global value chains caused many nations despite their state of economic development to struggle for necessary items. The goal of achieving profitability abated by having self-sufficiency, specifically in the manufacturing sector where unlike services, the production processes jolted. Under this backdrop, the paper attempts to project local industry clusters as a panacea for achieving resilient competitiveness. Design/methodology/approach  - To explore the credibility of clusters as an important tool to prepare nations towards a resilient future, a correlation between the state of cluster development in a country and its national competitiveness has been tested. Besides, any difference in the notion of state of cluster development between least developing countries, developing countries and developed countries has also been tested. The paper uses the data from World Economic Forum’s Global Competitiveness Report. Findings - Strong support for the research hypothesis has been found. High positive correlation exists between the state of cluster development and national competitiveness. The state of cluster development is found to be significantly different among three categories of countries. Originality/value - Clusters have been promoted in academic literature, policy circles and the business community for many advantages. This paper is a novice attempt to showcase these can serve as an instrument to prepare economies for self-sufficiency and a resilient future by performing an objective evaluation.” [ABSTRACT FROM AUTHOR]

“Agentic” cluster aggression: KIBS  auditors and law firms as key tax haven drivers

By: P. Cooke. Competitiveness Review, DOI: 10.1108/CR-07-2023-0159, August 2023.

Abstract: “Purpose - The purpose here is to show how the “shadow” economy has grown in scale and impetus in recent years, though even before modern times it has been present (e.g. the City of London, Shaxson, 2011) since at least the middle ages. The reasons for this have become complicated, but we can identify some “deep structures” that are common. Firstly, “globalisation” made it easier for multinationals to escape national regulatory regimes. Secondly, one of the ways neoliberal trading regulations allowed such actors to augment their assets was by means of what they initially called “transfer-pricing” but which now is officially known as “profit shifting” through tax havens. Thirdly, the growth in international trade in legal and illegal ways caused money laundering – even by otherwise respectable banks – to grow across borders. Conversely, from the supply-side, tax haven status was increasingly accessed by jurisdictions that sought to achieve economic growth by supplying tax haven services, both Delaware and Ireland as exemplars of a “developmental” fiscal policy. Design/methodology/approach  - This paper adopts a “pattern recognition” design, an approach that is abductive, meaning interpretive, as shown in the observation that explanation can be valid or reliable without direct observation. This is shown in the indirect observation that “rain fell because the terrace has puddles” or “ancient glaciers once carved this valley”. Findings - Reviewing the European Union’s (EU) list of non-co-operating jurisdictions in support of the OECD’s review of base erosion and profit-shifting activity, Collin concluded the EU’s listing “moved the needle” somewhat but was only a modest success. This is because of its reluctance to sanction its own members or large economies like the USA. Data on foreign direct investment and offshore banking assets suggest listed jurisdictions did not suffer notably from being named and shamed. In all cases studied, this contribution found legally damaging, fraudulent, conflict of interest and corrupt practice activities everywhere. Originality/value  - The originality is found in three spheres. Firstly, the pattern recognition method was vindicated in yielding hard to research results. Secondly, the “assemblage-thirdspace” theory was found advantageous in demonstrating the uneven geography of tax haven clusters and their common history in turbocharging economic development. Finally, the empirics showed the ruses executed by cluster members in tax havens to circumvent the law from global management consultancies to micro-firms consisting of tax lawyers and other experts interacting in knowledge supply chains of dubious morality.” [ABSTRACT FROM AUTHOR]

The role of clusters as collective actors in the energy transformation:  the case of Mazovia Cluster ICT

By: A. Lis, A. Radzio. Competitiveness Review, DOI: 10.1108/CR-05-2023-0114, September 2023.

Abstract: “Purpose - This paper aims to show the possibilities of implementing the idea of sustainability in the context of energy transformation using the concept of an industrial cluster. The implementation of the idea of sustainability is of particular importance from the perspective of the functioning of the meta-organisations involved in the implementation and promotion of decarbonisation processes. Industrial clusters, as collective actors initiating collective actions and providing complex governance structures, seem to have a great fit with regard to the needs of disseminating and implementing the idea of sustainable development, also in conjunction with energy development. Design/methodology/approach  - Empirical evidence is derived from a case study of Mazovia Clustes ICT (MC ICT). Based on the experience of this cluster, this study wants to show the evolution of the industrial cluster through the prism of its growing activity in supporting energy transition. The authors conducted the research in the period 2022–2023 using in-depth personal interviews and an analysis of the secondary data. The primary technique for data analysis and interpretation was conventional qualitative content analysis. Findings - As a result of this study, the authors have distinguished three main areas of cluster activity covering the strategic, operational/project and institutional levels. Within the first area, the cluster’s efforts focused on the development of a strategy and involvement in lobbying and co-legislating. The second area refers to the cluster’s activity in the carrying out of national and transnational projects on the creation and implementation of various energy solutions. The activities undertaken in the third area include support for the development of start-ups in the field of energy and involvement in the launch of an energy cluster and the development of distributed energy in Poland. Although the strategic and operational/project levels are characterised by a commonality of activities and goals, there is additionally a commonality of interests at the institutional level. Research limitations/implications - This paper has its limitations, which primarily relate to the small research sample (the choice of a case study as the main research strategy) and the methods used (qualitative research). Therefore, it is impossible to generalise the results to the entire population of clusters. Practical implications - This paper has considerable practical value, as the results of this study may be relevant for public authorities interested in implementing energy transition through industrial clusters. The activities described can also be a source of inspiration for other clusters interested in shaping pro-environmental attitudes. Social implications - The cluster’s activities are closely linked to the three pillars of sustainable development, including the social pillar. The solutions developed within the cluster in the context of energy development are aimed not only at increasing energy efficiency and protecting the environment but also at broader social welfare. Originality/value - This paper makes an additional contribution to the state-of-the-art of the industrial cluster concept by linking it to the idea of sustainable development, in the context of energy transformation. In addition, it sheds new light on issues related to cluster co-operation, combining the case of the industrial cluster with the very fresh and as yet poorly described idea of the energy cluster.” [ABSTRACT FROM AUTHORS]

Identifying Clusters as Local Innovation Systems

By: G. Christopoulos, R. Wintjes. Journal of the Knowledge Economy, DOI: 10.1007/s13132-023-01481-9, September 2023.

Abstract: “This paper introduces an indicator for identifying innovation clusters that transcend traditional sectoral taxonomies and integrate the creation and use of knowledge in regional economic systems. Such clusters can be expected, based on the literature, to provide fertile ground for feedback mechanisms between knowledge supply and demand, hence contributing to circular cumulative growth dynamics through interactive learning. However, when it comes to operationalising the study of innovation, the creation and use of knowledge have been treated as distinct processes in related work. It is this gap that this paper seeks to address. Applying principal component analysis on location quotients of manufacturing employment data and patent microdata for 152 EU regions, we generate a mapping of co-located innovation-related activity that highlights the complex techno-economic structures of regional economies. Our analysis reveals clusters which include industries traditionally labelled as ‘high-tech’, as well as clusters that reflect centuries-old trajectories of geographically concentrated production specialisation. This research sheds new light on the co-location of innovation-related activity in regional economies and provides insights for policymakers and practitioners seeking to foster innovation and economic development in the context of evolving knowledge and production eco-systems.” [ABSTRACT FROM AUTHORS]

Analysis of the perception and presence of design in the fruit and  vegetable cluster: The case of southeast Spain

By: M Arroyo-Vázquez, O. González-Yebra, B. Pacheco-Blanco, M. Á. Artacho-Ramíez. Agricultural Economics, DOI: 10.17221/169/2023-AGRICECON, August 2023.

Abstract: “Companies must provide economic, environmental and social added value based on innovation strategies, design and creative thinking in a globalised and competitive world characterised by rapid change and constantly evolving technologies. In this context, this paper analyses the role of design practice in companies in the agri-food sector (i.e. what is the design component present like; what are its relevance and importance?) An exploratory, descriptive study was conducted with 30 companies in southeast (SE) Spain’s fruit/vegetable sector. The findings reveal that all the surveyed companies make financial investments in design and positively value this (7.6 out of 10), which indicates they recognise its strategic and operative importance. However, integration, training and design promotion in the agri-food sector remains somewhat limited. Most companies lack an in-house design department or design professionals as staff members and perform mainly design activities limited to the visual and communication tasks related to marketing initiatives. These results unveil opportunities for enhancing design incorporation and appreciation in the agri-food sector, which could boost its competitiveness and differentiation in the market. Finally, this study can be considered a starting point for future development in line with the horticultural sector’s theory, practice, and design management policies.” [ABSTRACT FROM AUTHORS]

I’ll be there for you: coopetition and competitor-oriented  activities among South Asia restaurant in two UK regional clusters

By: S. Chaudhry, D. Crick, J. M. Crick. International Journal of Entrepreneurial Behavior & Research, DOI: 10.1108/IJEBR-08-2022-0694, August 2023.

Abstract: “Purpose - This study investigates how a competitor orientation (knowledge of and acting on competitors' strengths and weaknesses) facilitates coopetition activities (collaboration with competitors), within networks of competing micro-sized, independent, family restaurants, owned by entrepreneurs from ethnic minority backgrounds. Design/methodology/approach - An instrumental case study features data collected from interviews with 30 owners (as key informants) of micro-sized, independent, family-owned restaurants, in two urban clusters within the Midlands (UK). Specifically, the context involves restaurants offering South Asian cuisine and where the owner originated from the Indian sub-continent (Bangladesh, India or Pakistan). Secondary data were collected wherever possible. These two clusters (not named for ethics reasons) are highly populated by members of these respective ethnic communities; also, they contain a relatively large number of restaurants offering South Asian cuisine. Findings  - A competitor orientation facilitated strong coopetition-oriented partnerships comprised of extended family and intra-community members that helped enhance individual firms' performance, maintained family employment and sustained their cluster. It also helped owners develop subtle counter strategies where weak ties existed, such as via inter-community networks. For example, strategies attracted customers that were not loyal to a particular restaurant, or indeed, sub-ethnic cuisine (within Bangladesh, India or Pakistan, like the Punjab region). Subtle as opposed to outright counter strategies minimised retaliation, since restaurant owners wanted to avoid price wars, or spreading misinformation where the reputation of a cluster may suffer alongside the likely survival of individual businesses within that regional cluster. Originality/value - Mixed evidence exists in earlier studies regarding the competitive rivalry in certain sectors where ethnic minority ownership is prominent; not least, restaurants located in regional clusters. However, this investigation considers the notion – what if some of these earlier studies are wrong? More specifically, does certain prior research under-represent the extent that rival entrepreneurs of an ethnic minority origin collaborate rather than compete for mutually beneficial purposes? New evidence emerges regarding ways in which a competitor orientation can influence the performance-enhancing nature of coopetition activities among business owners originating from both intra and inter-ethnic communities.” [ABSTRACT FROM AUTHORS]

Determinants of rural creative microclustering: Evidence  from web-scraped data for England

By: J. A. Velez-Ospina, J. Siepel, I. Hill, F. Rowe. Regional Science, DOI: 10.1111/pirs.12754, August 2023.

Abstract: “This study aims to compare the drivers of clustering of rural and urban creative industries in England. We use pre-pandemic web-scraped data from 154,618 creative industry organizations in England, and use a novel technique to identify 71 distinct rural creative “microclusters” of geographically proximate creative firms. We then consider the role of place-based assets and agglomeration in the presence of microclusters at a micro-level geography and find that the determinants of microclustering are generally consistent between rural and urban areas. On that basis we argue that policies to support creative clusters may drive rural regional development.” [ABSTRACT FROM AUTHORS]

The new normal? Cluster farming and smallholder  commercialization in Ethiopia

By: G. Godana Dureti, M. P. Tabe-Ojong, E. Owusu-Sekyere. Agricultural Economics, DOI: 10.1111/agec.12790, August 2023.

Abstract: “Cluster farming is increasingly recognized as a viable means of improving smallholder economic integration and commercialization in many developing countries. However, little is known about its impact on smallholder welfare and livelihoods. We examine the relationship between cluster farming and smallholder commercialization using a large-scale survey of 3969 farm households in Ethiopia cultivating high-acreage crops such as teff, wheat, maize, barley, and sesame. Using switching regressions and instrumental variable estimators, we show that cluster farming is associated with commercialization measured as commercialization index, market surplus value, and market price. To further deal with endogeneity concerns, we also employ some pseudo-panel models where we observe similar insights. Beyond this, we account for heterogeneities by disaggregating households based on farm scales and crops cultivated. Our findings show that cluster farming is positively associated with commercialization for all farms and crop types despite this disaggregation. However, the related gains are higher among medium and large farms and vary per crop type. These findings imply that cluster farming is crucial in improving smallholder commercialization and may be a critical entry and leveraging point for policy. We thus lend support to initiatives and plans that seek to upscale cluster farming as they can potentially improve smallholder commercialization with ensuing impacts on rural livelihoods and welfare.” [ABSTRACT FROM AUTHORS]

Establishing industrial community energy systems: Simulating  the role of institutional designs and societal attributes

By: S. Eslamizadeh, A. Ghorbani, M. Weijnen. Journal of Cleaner Production, DOI: 10.1016/j.jclepro.2023.138009, September 2023.

Abstract: “The importance of decreasing industrial CO2 footprints has become evident, as also highlighted in COP26. As such, the transition to renewable energy in the industrial sector is essential to meet the targets. To this aim, establishing industrial community energy systems (InCES) where industries collectively invest in a shared energy system is an economically and environmentally attractive option. Yet, the emergence and continuity of such collective initiatives among industrial companies has neither received considerable attention in the scientific literature nor in practice. This research, as the first of its kind, aims to investigate institutional design options that allow for such collaboration to take place for the establishment and continuity of an InCES. Given the bottom-up and collaborative nature of such initiatives, we take an agent-based modeling and simulation approach, for the first time in this area, that incorporates the institutional and societal attributes that influence the formation and continuation of an InCES. We take data from an industrial cluster in Arak, one of the most prominent industrial cities in Iran. The results of this study confirm the economic feasibility of an InCES as compared to individual renewable energy investment in the cluster. The results also highlight the importance of flexible membership in increasing the number of investors (i.e., industrial companies) in such initiatives. Other important recommendations are: considering the installation of at least 15% extra capacity for the powerplant, restricting electricity consumption and enforcing on-time payment of monthly premium fees.” [ABSTRACT FROM AUTHORS]