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.

Identification of Clusters – An Actor-based Approach

By : T. Brenner. Working Papers on Innovation and Space, Philipps-Universität Marburg, 2017.

Abstract : “This paper provides two things. First, it gives an overview on the existing top-down methods for the identification of clusters (Section II). Second, it presents a new method that has been recently introduced by Scholl and Brenner (2016) in a basic version. However, the existing version of this approach is limited and does not take full advantage of its potential. The approach is further developed here and its characteristics and the procedure of its use are presented and discussed in detail (Section III).” [ABSTRACT FROM AUTHOR]

Clusters and Industry 4.0 – do they fit together?

By: M. Götz, B. Jankowska. European Planning Studies, DOI: 10.1080/09654313.2017.1327037, 2017.

Abstract : “Industry 4.0 heralds the profound transformation of business models by enabling the fusion of virtual and real worlds and the application of digitization, automatization and robotics in manufacturing. We review the basic premises of Industry 4.0 and map them against the clusters’ features with the aim to establish the kind of relations between these two categories. By exploring the likely impact of clusters on Industry 4.0, our discussion revolves around the broader question of the role of regional ecosystems in industrial transformation. Clusters, thanks to the advantages such as knowledge base and mechanisms, agglomeration economies and externalities (labour pool and critical mass of firms) and favourable more stable, less uncertain environment of trust and cooperation, may facilitate the digital transformation, particularly its phasing-in and testing phases. Notwithstanding this potential, it should be stressed that not all clusters would be able to play such prominent role. Only these equipped with adequate knowledge base and providing some expertise in the field of IT solutions, robotics, automatics, and so on, i.e. the technologies crucial to Industry 4.0 seem predestined to contribute to the emergence of fully fledged industrial internet. Despite seemingly some inconsistency between these two categories, clusters can facilitate the business transformation towards Industry 4.0. ” [ABSTRACT FROM AUTHORS]

Making policy evaluation work. The case of regional development policy

By: A. C. Lembcke, C. Menon. OECD Science, Technology and Innovation Policy Papers No. 38, 2017.

Abstract : “The paper presents a critical discussion of ex-post impact evaluation of policies that affect regional economic development, with a particular emphasis on drawing useful implications for policy making. In particular, it discusses the importance of setting clear and measurable objectives in designing policies and the need for equally clear policy levers; it highlights the main advantages of “counterfactual” evaluation; it analyses the methodological specificities of the evaluation of programmes that have a regional or urban dimension; and it provides a survey of some of the most relevant examples in the empirical economics literature. The ultimate goal is to “bridge” the perceived distance between policy discussions on the one side, and academic debates on the other. Some specific recommendations conclude the report. ” [ABSTRACT FROM AUTHORS]

A critical assessment of Brazilian manufacturing competitiveness in foreign markets

By : A. B. Cyrino, R. Parente, D. Dunlap, B. B. de Goes. Competitiveness Review: An International Business Journal, Vol. 27, Iss. 3, pp.253-274, 2017.

Abstract : “This study aims to examine the competitiveness of firms operating in the emerging economy of Brazil. This study examines the current perception of Brazilian business leaders regarding the level of competitiveness in various sectors of industrial activity and the country’s business environment. Survey data were collected in a joint study developed by Brazilian School of Public and Business Administration (EBAPE) and the Brazilian Institute of Economics (IBRE). The population surveyed was composed of businessmen, managers and directors of Brazilian manufacturing firms. This survey was created based on a similar survey conducted by the Harvard Business School, which was also aimed at identifying the reasons behind national loss of competitiveness. The results of the survey point out that the worsening competitive nature of companies operating in Brazil can be primarily attributed to the deterioration of its country-specific advantages and in particular those linked to government policies, services and bureaucratic procedures, all of which bear a negative impact on the country’s business environment. Future research should explore in more depth the specific types of initiatives that these firms have and are continuing to eagerly adopt with the aim of improving their domestic competitiveness and, namely, firm-specific advantages, whether it be by contributing to the improvement of the business environment as a whole, or by improving their own operations and management systems. The main obstacles related to competitiveness are associated with the “Brazil Cost”, namely, the tax system, infrastructure, political system, labor laws and bureaucracy that do not appear to offer much room for maneuvering in terms of reducing these barriers in the short term. Managers not addressing these important input factors of competitiveness not only divert attention away from innovation and creativity but also could lead to more serious political, social welfare and economic implications in the global marketplace. This study helps to gain a better understanding of the initiatives that could and are being used to contribute to a fruitful discussion about leading public policies and government actions geared toward upgrading Brazil’s business environment and country competitiveness as a whole. This research contributes to the understanding of the initiatives that could and are being used to improve firm competitiveness in Brazil. These initiatives contribute to a fruitful discussion about leading public policies and government actions geared toward upgrading Brazil’s business environment and country competitiveness as a whole.” [ABSTRACT FROM AUTHORS]

Global city clusters: theorizing spatial and non- spatial proximity in inter-urban firm networks

By : K. Martinus, T. J. Sigler. Regional Studies, DOI: 10.1080/00343404.2017.1314457, 2017.

Abstract : “Global city clusters: theorizing spatial and non-spatial proximity in inter-urban firm networks. Regional Studies. Spatial agglomeration is well theorized within regional studies and economic geography, with firm- and industry-level advantages generally attributable to the strategic benefits derived from spatial proximity. Increasingly, alternative proximity types have been explored to explain firm relationships within and between industries. This paper applies a novel social network analysis (SNA) approach to analyze city clustering as a function of both spatial and non-spatial factors – namely, economic, sociocultural and geopolitical. Based on the internal reporting structures of Australia-based firms, it explores how ‘global clusters’ are more useful in understanding industry dynamics and processes than hierarchical lists of cities of cascading importance. ” [ABSTRACT FROM AUTHORS]

Regional labour market mobility. A network analysis of inter-firm relatedness

By : S. B. Sufrauj, G. Corò, M. Volpe. Department of Economics Ca’ Foscari University of Venice, Working Papers No. 06/WP/2017, 2017.

Abstract : “Labour market rigidity is known to hamper the proper adjustment of an economy, thus, making it less resilient to shocks. This paper investigates the characteristics and resilience of the regional labour flow network in Veneto, a region famous for its industrial districts and the expertise of its workforce. A unique database of inter-firm worker mobility is used and the made-in-Italy relatedness to other industries is quantified. Descriptive results suggest that permanent-contract workers are more mobile within-sector than fixed-term contractors. The latter are more mobile across sectors. A finer disaggregation of the made-in-Italy industries shows that textile, food and woodwork are highly related to leisure-retail, logistics-wholesale and agriculture. These results can orient policy-making in getting faster labour reallocation. Network analysis establishes a number of stylised facts about labour flow networks, in particular, a hierarchical organisation of flows and a preference for workers to move from low-connected to high-connected firms and vice-versa, i.e. disassortativity. Unlike previous research, this paper identifies clusters of a non- spatial nature, that are, based on the intensity of labour flows. Regression analysis shows that labour mobility, both in and out, is beneficial for firms. However, being located inside labour clusters negatively affects firm performance. Interestingly, when these clusters include MNEs, they benefit. These results combined suggest that variety of connections prevails over standardisation.” [ABSTRACT FROM AUTHORS]

Social networks, geographic proximity, and firm performance in Viet Nam

By : E. Howard. WIDER Working Paper 2017/69, 2017.

Abstract : “This paper uses panel data to assess the relative importance of social networks and geographic proximity to micro, small, and medium enterprises in Viet Nam. The results suggest that a larger social network, and hiring employees mainly through social networks, are both correlated with higher value added per worker. The number of government officials and civil servants in a firm’s network emerges as particularly important. When the quality of contacts is controlled for, firms with tighter social networks have, on average, higher value added per worker. The analysis of spatial networks reveals that firms with a lower percentage of customers and suppliers in the same district actually have higher value added per worker. The results suggest that for micro, small, and medium firms in Viet Nam, strong social networks are much more important than geographic proximity.” [ABSTRACT FROM AUTHOR]

Place-Based Innovation Ecosystems

By : G. Rissola, F. Hervás, M. Slavcheva, K. Jonkers. EUR 28545 EN, European Union, doi:10.2760/949545, 2017.

Abstract : “The present case study aims to identify key success factors in the Espoo innovation ecosystem, with particular attention to the role of Aalto University as an example of an entrepreneurial university. It seeks to inform policies aimed at supporting the strengthening and emergence of existing or new place-based innovation ecosystems and entrepreneurial universities in other EU regions and cities.” [ABSTRACT FROM AUTHORS]

Knowledge externalities and firm heterogeneity: Effects on high and low growth firms

By : M. Grillitsch, M. Nilsson. CIRCLES Papers in Innovation Studies No. 2017/06, 2017.

Abstract : “Knowledge externalities affect high and low growth firms differently. The paper develops two theoretical arguments. The knowledge equilibrium argument postulates that knowledge externalities weaken high growth firms for the benefit of low growth firms until performance differences vanish. The knowledge competition argument claims that high growth firms are in a better position to identify, attract, and integrate knowledge, thereby benefiting more from knowledge externalities than low growth firms. Based on 188,936 observations of 32,736 Swedish firms from 2004 to 2011, it is analyzed whether knowledge centers enable high growth firms to surge ahead or low growth firms to catch up.” [ABSTRACT FROM AUTHORS]