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.

Understanding Cluster Evolution

By: M. Trippl, M. Grillitsch, A. Isaksen, T. Sinozic. Papers in Innovation Studies, CIRCLE, Paper n. 2015/46, 2015.  

Abstract: “The past few years have seen an increasing popularity of cluster life cycle approaches. These models, however, suggest a rather deterministic view, are indifferent with respect to context and suffer from biological connotations. This chapter intends to go beyond the cluster life cycle models. We review the literature on industrial districts, innovative milieu and regional innovation systems and investigate how these alternative approaches contribute to the development of a more context-sensitive approach to cluster change. We argue that future research may benefit from developing theoretically relevant categorizations of different cluster types and from carrying out comparative empirical studies.” [ABSTRACT FROM AUTHORS]

Does Embeddedness in Clusters Enhance Firm Survival and Growth? An Establishment-Level Analysis using CORIS Data

By: N. Litzel. Regional studies, ISSN: 0034-3404, 2016.

Abstract: “Does embeddedness in clusters enhance firm survival and growth? An establishment-level analysis using CORIS data, Regional Studies. The effects of clusters on firm survival and firm growth are the basis of an extensive literature that has produced mixed evidence. In this paper an analysis is performed by using an evaluation design based on a control group approach. This is possible by exploiting a database that connects an establishment-reported indicator for embeddedness in clusters with highly reliable longitudinal establishment data. Survival analysis (2001–10) shows that openness towards what the regional value-added chains can offer reduces failure risk by roughly one-third. In addition, embeddedness in clusters has raised 10-year growth of establishments by 16.6% on average.” [ABSTRACT FROM AUTHOR]

Measuring relatedness in a multisectoral cluster: an input–output approach

By: K. Morrissey, V. Cummins. European Planning Studies, ISSN: 0965-4313, 2016.

Abstract: “Studies in evolutionary economic geography have found that knowledge spillovers, crucial for the development and maintenance of clusters, tend to flow between sectors that are related via similar inputs and/or outputs. Thus, there is a growing body of literature stating that industrial variety within clusters is beneficial for economic growth, whereby local industrial diversity sparks creativity, new ideas and innovations. Within this context, the Irish Maritime and Energy Resource Cluster (IMERC) is a diverse, multisectoral cluster. Using an Input–Output table this paper examines the intra-cluster linkages, as well as the relatedness in terms of inputs and outputs across the four IMERC pillars: Marine Energy; Shipping, Logistics and Transport; Maritime Safety and Security; and Yachting Products and Services. This analysis found that although IMERC has weak intra-cluster linkages, the four pillars share a high number of related inputs and outputs. Based on this analysis, IMERC has the potential to develop into a strong maritime cluster.” [ABSTRACT FROM AUTHORS]

Agglomeration and innovation

By: G. Carlino, W. R. Kerr. Bank of Finland Research, Paper n. 27, 2015.  

Abstract: “This paper reviews academic research on the connections between agglomeration and innovation. We first describe the conceptual distinctions between invention and innovation. We then discuss how these factors are frequently measured in the data and note some resulting empirical regularities. Innovative activity tends to be more concentrated than industrial activity, and we discuss important findings from the literature about why this is so. We highlight the traits of cities (e.g., size, industrial diversity) that theoretical and empirical work link to innovation, and we discuss factors that help sustain these features (e.g., the localization of entrepreneurial finance).” [ABSTRACT FROM AUTHORS]

The role of geographical proximity for project performance - Evidence from the German "Leading-Edge Cluster Competition”

By: U. Cantner, H. Graf, S. Hinzmann. Jena Economic Research Papers, ISSN: 1864-7057, 2015.

Abstract: “The role of geographical proximity in fostering connections and knowledge flows between innovative actors ranks among the most controversial themes in the research of innovation systems, regional networks and new economic geography. While there is ample empirical evidence on the constituent force of co-location for the formation of research alliances, little attention has been paid to the actual consequences of geographical concentration of alliance partners for the subsequent performance of these linkages. In this paper we address this underexplored issue and aim to complement the rare examples of studies on the relevance of geographical proximity for research outputs. We utilize original and unique survey data from collaborative R&D projects that were funded within the "Leading-Edge Cluster Competition" - the main national cluster funding program in Germany in recent years. We find that the perception of the necessity of spatial proximity for project success is rather heterogeneous among the respondents of the funded projects. Moreover, the relationship between geographical distance and project success is by no means univocal and is mediated by various technological, organizational and institutional aspects. Our findings strongly support the assumption that the nature of knowledge involved determines the degree to which collaborators are reliant on being closely located to each other. The relevance of spatial proximity increases in exploration contexts when knowledge is novel and the innovation endeavor is more radical while this effect is less pronounced for projects with a stronger focus on basic research. Moreover, geographical proximity and project satisfaction foster cross- fertilization effects of LECC projects.” [ABSTRACT FROM AUTHORS]

Measuring structural social capital in a cluster policy network: insights from the Basque Country

By: I. Etxabe, J. M. Valdaliso. European Planning Studies, ISSN: 0965-4313, 2016.

Abstract: “Cluster Associations (CAs) attempt to promote competitiveness through inter-firm collaboration, and are generally seen as drivers of social capital formation in the region. We map in this paper, by using Social Network Analysis, the cluster policy network of the Basque Country in 2013, which may be considered a proxy of the structural dimension of social capital in the region. Besides, we identify the central agents of this network and attempt to explain the reasons for their centrality and the roles that they play. We take the affiliation of an organization to at least two CAs as a first indicator of the overall pattern of connections within the cluster policy network. Later on, we filter it with data about the Boards of Directors of CAs, and the Basque Contact Points created to concur with the Seventh Framework Programme for Research launched by the European Commission. We contend that those organizations that are present in these three networks form a ‘small world’ that numerous studies have shown to be favourable for creative output, where they might play a dual role of gatekeepers of knowledge and innovation within and between clusters and drivers of bridging social capital formation in the Basque Country.” [ABSTRACT FROM AUTHORS]

Cantonal Convergence in Ecuador: A Spatial Econometric Perspective

By: R. Mendieta Muñoz, Nicola Pontarollo. MPRA, Paper n. 68399, 2016.

Abstract: “The paper analyses the convergence process of Ecuadorian cantons during the period 2007-2012 accounting for the role of spatial spillovers through spatial econometric tool. The advantage of this technique is to provide a reliable estimation because it takes into account the spatial interaction in the territory. In addition, it allows identifying clusters of cantons characterised by similar spatial patterns that can be interpreted as convergence clubs because they represent areas with similar initial conditions in the “basin of attraction” that, according to economic theory, converge to a common steady state equilibrium. The results highlight that a convergence process is present, but it involves the cluster of most developed cantons. This opens various policy implications related to i) the capacity of cantons to take advantage from the positive dynamics of neighbours, ii) the persistence of development in some circumscribed areas, and iii) the spatial unbalanced development.” [ABSTRACT FROM AUTHORS]

How predictable is technological progress?

By: J. Doyne Farmer, F. Lafond. Research Policy, Volume 45, Issue 3, April 2016, Pages 647–665.

Abstract: “Recently it has become clear that many technologies follow a generalized version of Moore's law, i.e. costs tend to drop exponentially, at different rates that depend on the technology. Here we formulate Moore's law as a correlated geometric random walk with drift, and apply it to historical data on 53 technologies. We derive a closed form expression approximating the distribution of forecast errors as a function of time. Based on hind-casting experiments we show that this works well, making it possible to collapse the forecast errors for many different technologies at different time horizons onto the same universal distribution. This is valuable because it allows us to make forecasts for any given technology with a clear understanding of the quality of the forecasts. As a practical demonstration we make distributional forecasts at different time horizons for solar photovoltaic modules, and show how our method can be used to estimate the probability that a given technology will outperform another technology at a given point in the future.” [ABSTRACT FROM AUTHORS]

Do Agglomeration Externalities Affect Firm Survival?

By: R. Basile, R. Pittiglio, F. Reganati. Regional Studies, ISSN: 0034-3404, 2016.

Abstract: “This paper analyses the impact of spatial agglomeration externalities on Italian start-up firms’ survival. Italy represents a relevant case study given the well-known role of firm clusters in the country's economic development. Results obtained support the hypothesis that industry variety reduces the likelihood of firm exit. Specifically, related variety, which contributes to the generation and diffusion of new knowledge, has a positive effect on firm survival in manufacturing sectors, while unrelated variety, which may work as a portfolio strategy, plays a positive role in services sectors. Localization economies positively influence firm survival only in services sectors. Finally, urban density is not robust to the control for firm characteristics.” [ABSTRACT FROM AUTHORS]

Which types of relatedness matter in regional growth? Industry, occupation and education

By: S. Wixe, M. Andersson. Regional Studies, ISSN: 0034-3404, 2016.

Abstract: “This paper provides a conceptual discussion of relatedness, which suggests a focus on individuals as a complement to firms and industries. The empirical relevance of the main arguments is tested by estimating the effects of related and unrelated variety in education and occupation among employees, as well as in industries, on regional growth. The results show that occupational and educational related variety are positively correlated with productivity growth, which supports the conceptual discussion put forth in the paper. In addition, related variety in industries is found to be negative for productivity growth, but positive for employment growth.” [ABSTRACT FROM AUTHORS]

Urban Networks: Connecting Markets, People, and Ideas

By: E. L. Glaeser, G. A. M. Ponzetto, Y. Zou. NBER, Paper N. 21794, 2015.

Abstract: “Should China build mega-cities or a network of linked middle-sized metropolises? Can Europe’s mid-sized cities compete with global agglomeration by forging stronger inter-urban links? This paper examines these questions within a model of recombinant growth and endogenous local amenities. Three primary factors determine the trade-off between networks and big cities: local returns to scale in innovation, the elasticity of housing supply, and the importance of local amenities. Even if there are global increasing returns, the returns to local scale in innovation may be decreasing, and that makes networks more appealing than mega-cities. Inelastic housing supply makes it harder to supply more space in dense confines, which perhaps explains why networks are more popular in regulated Europe than in the American Sunbelt. Larger cities can dominate networks because of amenities, as long as the benefits of scale overwhelm the downsides of density. In our framework, the skilled are more likely to prefer mega-cities than the less skilled, and the long-run benefits of either mega-cities or networks may be quite different from the short-run benefits.” [ABSTRACT FROM AUTHORS]

The Specialisation of EU Regions in Fast Growing and Key Enabling Technologies

By: R. Evangelista, V. Meliciani, A. Vezzani. JRC Technical Reports, European Commission, ISSN: 1831-9424, 2015.

Abstract: “In the context of the Europe 2020 objective of establishing in the EU a smart, sustainable and inclusive economy, European regions have been called to design and implement national and regional 'Research and Innovation Strategies for Smart Specialisation' (RIS3). The rationale behind the concept of smart specialisation is that, in a context of global competition for talent and resources, most regions can only acquire a real competitive edge by finding niches or by mainstreaming new technologies into traditional industries and exploiting their 'smart' regional potential. Although the most promising way for a region to promote its knowledge-based growth is to diversify into technologies, products and services that are closely related to existing dominant technologies and the regional skills base, the European Commission puts special emphasis on a set of technologies labelled as 'Key Enabling Technologies' (KETs). Despite the great emphasis on KETs, there is only very limited evidence on the capability of EU regions to specialise in these fields and there are no studies directly investigating the actual impact of these technologies on regional innovation and economic growth. This report aims at filling these gaps by: i) looking at the relationship between KETs and 'Fast Growing Technologies' (FGTs); ii) providing empirical evidence on the EU regional specialisation in KETs and FGTs; iii) relating technological specialisation to regional innovation and economic growth. In particular, the report aims at answering these questions: 1) Which technologies have emerged as the fastest growing ones in the recent decades? 2) Is there a relationship between fast growing technologies and KETs? 3) Which regions are specialised in FGTs and KETs? 4) Are there convergence and polarization phenomena observable in the evolution of EU regions innovative activities in fast growing technologies and KETs? 5) Do EU regions specialized in fastest growing technological fields and key enabling technologies exhibit higher innovation and economic performances? The main results of the report can be summarised as follows. First, only a small share of KETs are also fast growing technologies, although the degree of overlapping between KETs and FGTs varies substantially across different KETs fields. Second, while KETs are concentrated in Central Europe, FGTs prevail in Scandinavian countries and the UK. Third, while there is evidence of some regional convergence in KETs and, to a less extent, in FGTs, spatial correlation increases over time, showing that diffusion often occurs across contiguous regions. Finally, the results of the estimations of the effects of FGTs and KETs on innovation (patents) and economic (GDP per capita) growth show that only specialisation in KETs directly affects economic growth, while specialisation in FGTs has an impact on growth only indirectly, that is through its impact on regions innovation performances. Overall, these results confirm the pervasive and enabling role of KETs pointing to the importance for European regions to target these technologies as part of their RIS3 strategies.” [ABSTRACT FROM AUTHORS]

Does Trade Imply Convergence? Analyzing The Effect of NAFTA on The Local Convergence in Mexico

By: A. Díaz Dapena, E. Fernández Vázquez, R. Garduño Rivera, F. Rubiera Morollón. CIDE, Paper N. 591, 2015.  

Abstract: “Regional Economics and Economic Growth focus on the question of whether trade leads to a greater concentration of economic activity. Yet little empirical work has assessed the regional convergence impacts of trade. Therefore this paper studies the regional convergence from trade in Mexico after NAFTA. Unlike previous papers, working with municipal-level data allows to observe more clearly the convergence patterns across space and to identify the effect of NAFTA, respectively. Result shows that after NAFTA, convergence in regions near the U.S. border grew faster than those further away. However, there is a significant reduction of the ß coefficient after NAFTA indicating a slowdown in the convergence rate. Additional, we find that those municipalities in the south have not been integrated in the world markets, and have, instead, lagged behind their counterparts after NAFTA.” [ABSTRACT FROM AUTHORS]