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.

Enhancing Dynamism in Clusters: A Model for Evaluating Cluster Organizations ́ Bridge-Building Activities Across Cluster Gaps

By : S. Morgulis- Yakushev, O. Sölvell. Competitiveness Review, Vol. 27, Iss 2, 2017.

Abstract : “Dynamic clusters of firms and organizations have become hotbeds of innovation in today ́s global economy. In order to enhance innovation dynamism in clusters a range of “bridge-building” organizations have emerged, including Cluster Organizations This paper develops a methodology to evaluate impact from activities initiated by Cluster Organizations. Firms and other organizations inside clusters are separated by different gaps, hindering interaction, resource mobility and collaboration, and the role of cluster organizations is to bridge these gaps. In order to test the model, 265 cluster member firms were surveyed, to 1) test how much “traffic” each cluster organization had generated through their bridge building, and 2) to what extent this traffic had led to any observable impact on performance of cluster firms.” [ABSTRACT FROM AUTHORS]

Managing continuous innovation through performance measurement

By: M. Saulina. Competitiveness Review, Vol. 27, Iss 2, 2017.

Abstract: “To define measures that small and medium-sized enterprises (SMEs) can use for evaluating continuous innovation and to analyze types of SMEs, according to the innovation measures they use and their characteristics in terms of size and operational and financial performance. The data were gathered with the help of a structured survey questionnaire from a cross-section of firms in both the manufacturing and service sectors in Finland. The data were analyzed in terms of factor and cluster analyses. Three measures of continuous innovation and three types of SMEs were defined based on their continuous innovation measures. It was found that firms using all three types of innovation measures also register above-average financial and operational performance compared to those that do not. This study attempts to improve the precision of performance measurement and the management of continuous innovation in firms by expanding and refining existing measurement guidelines and principles. In particular, this work approaches the subject of continuous innovation measurement from the standpoint of SMEs.“ [ABSTRACT FROM AUTHOR]

Assessing the sources of competitiveness of US states

By: M. Akpinar, O. Can, M. Mermercioglu. Competitiveness Review, Vol. 27, Iss 2, 2017.

Abstract: “ This study aims to test the emerald model on the regional basis for the identification of the most important sources of competitiveness in the states of the USA. Using the emerald model and its assertions, data is collected over the period 1998-2013 from 47 states in the USA. Multiple regression analysis is performed with a lag structure of four, six and eight years as alternative time intervals to explain the dependent variable. The empirical results support the emerald model except for its R&D attractiveness dimension in its ability to explain competitiveness in the states of the USA. In the longer term (eight-year lag), cluster attractiveness has the highest impact followed by environmental attractiveness, ownership attractiveness, educational attractiveness and talent attractiveness. Comparison of regression models with different time lags indicates that once the very early phase is over, the impacts of most attractiveness dimensions become rather consistent across time and do not disappear. The study contributes to the literature on the measurement of regional competitiveness by performing an overall assessment of the emerald model and by analysing the impacts of the model’s dimensions on competitiveness over time. On the other hand the identification of the sources of regional competitiveness paves the way for a more efficient allocation of resources regarding policies and improvement programs.“ [ABSTRACT FROM AUTHORS]

Comparative analyses of competitive advantage using Porter diamond model (the case of MSMEs in Himachal Pradesh)

By : M. Kharub, R. Sharma. Competitiveness Review, Vol. 27 Iss 2, 2017.

Abstract : “The purpose of this paper is to measure and analyze the competitive advantage of MSMEs based upon the Porter’s diamond framework. The major objective is to contribute towards better understanding of various determinants of the diamond model in context within Indian MSMEs. Extent review of the literature has been done to identify various critical factors contributing to developing a competitive advantage. Exploratory factor analysis and internal consistency tests were performed to verify scales validity and reliability of measuring instrument (questionnaire). In research design, a case study approach has been used in which MSMEs operating in the pharmaceutical, electrical and electronics, automobile, food, and textile sectors were considered. Study findings indicate that the pharmaceutical sector is more competitive followed by food (112.491) as revealed by the high value of surface area i.e. 150.931. The competitiveness among MSME sectors is mostly affected by demand conditions followed by firm strategy, structure and rivalry. Moreover, the score of diamond axes indicates significant difference with respect to determinants. For instance, in the textile sector, the determinants such as factor conditions and related and supporting industries scored low e.g. 4.710 and 4.280 respectively, which indicates it needs to be strengthened as this sector stands at last position with minimum surface area e.g. 67.398. Owing to the time and resource constraints, this study was conducted in MSMEs situated in the state of Himachal Pradesh, India, and thus generalizations of results is rather limited. This study is one of the original being undertaken by authors which helps to underline the importance of various determinants which may help the MSME units to improve competitiveness by implementing effective competitive strategies. The study could be extended to other regions of the country. This study is a result of extended research on competitiveness and provides an instrument to measure firm ability to be competitive. CEO’s, managers and policy makers from industries as well as government will be able to use this to evaluate their competitive positioning and identify key problem areas which required improvements.” [ABSTRACT FROM AUTHORS]

Assessing the Spatial Concentration of Indonesia's Manufacturing Sector

By : A. D. Rothenberg, S. Bazzi, S. Nataraj, A. V. Chari. RAND working paper WR-1180, 2017.  

Abstract : “Beyond the role of economic forces, many theories of economic geography emphasize the way politics can shape the spacial configuration of economic activity. We investigate the impact of changes in political regimes on industrial concentration using 30 years of data on Indonesian manufacturers. These data span both the reign of Suharto, one of the strongest central governments in Southeast Asia, and its collapse and the subsequent decentralization of power. Using the canonical measure of Ellison and Glaeser, we show that in the mid 1980s, Indonesia’s firms exhibited a similar degree of agglomer- ation as seen in the United States. Spatial concentration then declined until the 1998 Asian Financial Crisis, and has since begun to rise during the decentralization period. We also measure concentra- tion using the continuous measure developed by Duranton and Overman (2005), and find that the agglomeration exhibited by Indonesian firms is also broadly similar to that documented by Duran- ton and Overman (2005) for the United Kingdom, although localization drops off more gradually in Indonesia than in the United Kingdom. Using this continuous measure of agglomeration, we iden- tify 32 manufacturing clusters in Indonesia, and investigate the correlates of concentration. We find that the most robust drivers of agglomeration have been natural resources and supply chain linkages, especially with respect to explaining long-term changes in spatial concentration.” [ABSTRACT FROM AUTHORS]

Industrial clusters : The case for Special Economic Zones in Africa

By : C. Newman, J. Page. WIDER Working Paper 2017/15, 2017.

Abstract : “Firms tend to cluster in close geographic proximity to each other to benefit from reduced transport costs, shared inputs, and productivity spillovers due to learning and technology transfers. Evidence from low-income countries suggests that such agglomeration economies may be substantial in endogenously formed clusters. This raises the question of whether spatial industrial policies can be designed to facilitate clustering. In this paper, we consider the case for creating Special Economic Zones (SEZs) in Africa. We document at the country level the state of current SEZ programmes and the policy measures in place for their promotion. We give an overview of the evidence on their success and provide a set of policy recommendations to improve SEZs performance.” [ABSTRACT FROM AUTHORS]

Building effective clusters and industrial parks

By : X. Zhang. IFPRI Discussion Paper 01590, 2017.

Abstract: “It is a daunting task to build institution and infrastructure over a short time period in developing countries. But in the absence of sound institutions and adequate infrastructure, it is difficult for economic transformation to take place. An alternative is to facilitate existing industrial clusters or build industrial parks by creating an enabling environment in a limited place. This paper reviews the commonly used strategies to build effective clusters and industrial parks. Clusters and industrial parks are location specific. Because they have an informational advantage, local governments are in a better position than the central government to identify and solve the bottlenecks that affect clusters and industrial parks. As clusters and industrial parks evolve, new bottlenecks emerge, thereby requiring new solutions. This in turns calls for continuous tinkering by local governments. It is important to place local governments and business communities in the driver’s seat of local economic growth so that they can watch out for and adjust to the bumps in the road ahead.”  [ABSTRACT FROM AUTHOR]

Disentangling Innovation in Small Food Firms: The role of External Knowledge, Support, and Collaboration

By : S. Wixe, P. Nilsson, L. Naldi, H. Westlund. CESIS Working Paper No. 446, 2017.

Abstract: “This paper applies unique survey data on innovation and external inter- action of small food producers in Sweden. The overall purpose is to test if firms that are more engaged in external interaction are more inno-vative. To disentangle innovativeness beyond new goods and services, innovation is measured as new processes, new markets, new suppliers, new ways of organization, and new distributors. Findings point to a positive relationship between firm innovation and external interaction, both in terms of collaboration, external knowledge and support from regional actors. In particular, collaboration regarding transports and sales is shown to enhance most types of innovation. Product and pro-cess innovation benefit from external knowledge from extra-regional firms as well as regional support from the largest firm. Findings sug-gest that current innovation policies can improve their efficiency by increasing their flexibility to enable tailor-made innovation policies at the local level.” [ABSTRACT FROM AUTHORS]

Making sense of variety in place leadership: the case of England’s smart cities

By : A. Nicholds, J. Gibney, C. Mabey, D. Hart. Regional Studies, 51:2, 249-259, DOI: 10.1080/00343404.2016.1232482, 2017.

Abstract: “Making sense of variety in place leadership: the case of England’s smart cities. Regional Studies. There is rising interest in cities becoming ‘smart’ knowledge-oriented economies by prioritizing more digitally enabled modes of production and service delivery. Whilst the prevalence of these new organizational forms is well understood, the way that leadership agency is exercised (i.e., the actors involved and their modalities of action) is not. Drawing on new empirical data and sense-making methodology, the paper reveals discursive patterns in how public agencies, private firms and communities ‘see’ and ‘do’ leadership within these place-based contexts, and concludes that success in exploiting the social and spatial dynamics of ‘smart’ development lies in understanding actors’ assumptions about commercial and social gain.” [ABSTRACT FROM AUTHORS]

The challenge of smart specialisation in less favoured regions

By : H. Kroll. Fraunhofer Institute for Systems and Innovation Research ISI, Working Papers No. R1/2017, 2017.

Introduction: “Inherent in its conception, the smart specialisation approach carries an intrinsic tension between its alleged place-based nature at the meso-level of regions and the fact that it was derived from theoretical premises that derive from the analysis of competition between nations (Foray et al. 2009; 2011). Implicitly, therefore, it presupposes a certain degree of completeness and variety in economic and innovation systems as is commonly assumed in international comparative analysis between nations – debatable as this suggestion may in itself be. Obviously, the actual innovation systems of European regions are often much more fragmented (Capello and Kroll 2016; Isaksen 2014; Kroll 2015; Technopolis et al. 2012; Tödtling and Trippl 2005). At the same time, it borrows concept of exploration and discovery from the analysis of the world of business (Hausman and Rodrik 2003) which cannot easily be transferred to the world of governance, leave alone government. While, possibly, it can most easily be read as promoting the public triggering of such processes where their absence constitutes an obstacle to economic development and their better guidance in others (Landabaso 2012; 2014), this ambition is neither an easy task in practice nor theoretically very well understood to start with. Overall, there has been limited differentiation between processes that are merely discursive and those that amount to actual co-creation and joint discovery. [...]” [INTRODUCTION FROM AUTHOR]

Innovation policies for regional structural change: Combining actor-based and system-based strategies

By : A. Isaksen, F. Tödtling, M. Trippl. SRE-Discussion 2016/05, 2017.

Abstract: “There seems to be a widespread consensus in academic and policy circles that the promotion of current economic strongholds and specialisations is no longer sufficient in order to ensure the long-term competitiveness of regions. New policy concepts such as smart specialisation emphasize the need to break with past practices and design and implement innovation strategies that boost regional structural change, i.e. policies that support regional economies to renew their industrial base by diversifying into new but related economic fields or creating entirely new sectors. This new strategic orientation for regional innovation policies has essentially been informed by evolutionary economic geography, which has offered novel insights into how regional economies transform over time and how new growth paths come into being. Applying a regional innovation system (RIS) perspective, recent work has enhanced our understanding of how such processes of regional economic change vary across different types of regions. RIS differ enormously in their capacity to develop new growth paths due to pronounced differences in endogenous potentials and varying abilities to attract and absorb exogenous sources for new path development. The policy implications following from these recent findings on the uneven geography of new path development have hardly been thoroughly discussed so far. General claims such as the need to avoid “one size fits all” strategies and develop place-based policies for regional industrial change remain vague and provide little guidance in this regard. The aim of this paper is to identify opportunities and limitations of regional innovation policies to promote new path development in different types of RIS. We distinguish between (1) organisationally thick and diversified RIS, (2) organisationally thick and specialized RIS and (3) thin RIS. Regarding path development, a distinction is drawn between the extenstion, modernization, importation, branching and creation of industrial paths, reflecting various degrees of radicalness of change in regional economies. The paper offers a conceptual analysis of conditions and influences that enable and constrain new path development in each RIS type and outlines the contours of policy strategies that are suitable for promoting new path development in those different types of RIS. Our point of departure is the well-known distinction between system-based and actor-based policy approaches. The former aims to improve the functioning of the RIS by targeting system failures, promoting local and non-local knowledge flows and adapting the organisational and institutional set-up of the RIS. Actor-based strategies, in contrast, support entrepreneurs and innovation projects by firms and other stakeholders. We argue that both strategies will have only a limited impact on regional economic change when applied alone. However, if they are combined, they are well suited to promote new path development. The paper discusses which specific combinations of system-based and actor-based policy strategies matter for different types of RIS.” [ABSTRACT FROM AUTHORS]

Strategic agency and institutional change: investigating the role of universities in regional innovation systems (RISs)

By: P. Benneworth, R. Pinheiro, J. Karlsen. Regional Studies, 51:2, 235-248, DOI: 10.1080/00343404.2016.1215599, 2017.

Abstract: “Past analyses rooted in the thick description of regions successful in constructing regional innovation systems have given way to analyses more focused on the intentionality in these processes, and how actors in regions with their own wider networks can shape these high-level changes in regional fortunes. As part of this, place-based leadership has emerged as a promising concept to restore both agency and territory to these discussions, but it remains under-theorized in key areas. This paper contributes to these debates by arguing that there remains a reduction of agency to organizations, and that place-based leadership research needs to take into account organizational dynamics and interests in for bettering our understanding of the dynamics of place-based leadership in regional innovation systems.” [ABSTRACT FROM AUTHORS]

What Makes Cities More Productive? Agglomeration economies and the role of urban governance: Evidence from 5 OECD Countries

By : R. Ahrend, E. Farchy, I. Kaplanis, A. C. Lembcke. OECD Productivity Working Papers, 2017-02, 2017.

Abstract : “This paper estimates agglomeration benefits across five OECD countries, and represents the first empirical analysis that combines evidence on agglomeration benefits and the productivity impact of metropolitan governance structures, while taking into account the potential sorting of individuals across cities. The comparability of results in a multi-country setting is supported through the use of a new internationally-harmonised definition of cities based on economic linkages rather than administrative boundaries. In line with the literature, the analysis confirms that city productivity increases with city size but finds that cities with fragmented governance structures tend to have lower levels of productivity. This effect is mitigated by the existence of a metropolitan governance body.” [ABSTRACT FROM AUTHORS]

How do inventor networks affect urban invention?

By : L. Bergé, N. Carayol, P. Roux. Cahiers du GREThA, n°2017-06, 2017.

Abstract : “Social networks are expected to matter for invention in cities, but empirical evidence is still puzzling. In this paper, we provide new results on urban patenting covering more than twenty years of European patents invented by nearly one hundred thousand inventors located in France. Elaborating on the recent economic literatures on peer effects and on games in social networks, we assume that the productivity of an inventor's efforts is positively affected by the efforts of his or her partners and negatively by the number of these partners' connections. In this framework, inventors' equilibrium outcomes are proportional to the square of their network centrality, which encompasses, as special cases, several well-known forms of centrality (Degree, Katz-Bonacich, Page-Rank). Our empirical results show that urban inventors benefit from their collaboration network. Their productivity increases when they collaborate with more central agents and when they have more collaborations. Our estimations suggest that inventors' productivity grows sublinearly with the efforts of direct partners, and that they incur no negative externality from them having many partners. Overall, we estimate that a one standard deviation increase in local inventors' centrality raises future urban patenting by 13%.” [ABSTRACT FROM AUTHORS]