Innovation And Clusters Reading Notes

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Innovation and Clusters Amin 1999 – Summary of everything, quote for INSTITUTIONALISM --- RATIONALITY/COGNITIVE FRAMES --- MOBILIZING WEALTH OF REGIONS Institutionalism Regional policy previously firm centred, top-down state driven in their approaches to stimulating demand in less favoured regions (LFRs) – both Keynesian approach (redistributive) and pro market neoliberalism (deregulating labour/capital, underpinning entrepreneurship, technology and infrastructure). Keynesianism failed to stimulate, neoliberalism produced inequalities/dependent development. In contrast, the third approach is Bottom-up. Economy not just set of atomised firms/markets driven by rational preferences, standard rules (neoclassical economics) –
but moulded by path dependent socio-institutional influences. Mobilising endogenous potential to create regions (therefore Storper 1995 “The Wealth of Regions” – mobilising the wealth of regions), inspired by prosperous regions with local economic interdependencies (Italian districts, technopoles, Baden Württemberg). Recognising collective/social foundations of economic behaviour: 1. SOCIAL CONSTRUCTION – relations between people. Institutional economics (Hodgson 1988) & economic sociology (Ingham 1996) – development an instituted process and socially embedded activity, context specific and path dependent. Contrast with orthodox assumption is that economies equilibrium oriented/based on rational individual. Markets socially constructed (Bagnasco 1988) and embedded – influenced by network properties like mutuality, trust, cooperation (Granovetter 1985, also strength of weak ties) [Mysteries in the air/social interactions underpinning other Marshallian factors]. 2. FORMS OF ACTOR NETWORK in construction of knowledge, determination of activity. From recognition of psychological impact on economics (Cosmides & Tooby 1994). Based on actor network theory/psychology showing that people are not perfectly rational and their outlooks/forms of rationality (instrumentalist/procedural/recursive) influence activity (Latour 1986, Delorme 1997). “Creative, learning and adaptive capacities of economic agents” depend on rationalities of actor networks
[Innovation/knowledge systems in knowledge economy]. 3. FORMAL AND INFORMAL INSTITUTIONS (Hodgson 1988) – Rules, laws, organizations … informal/tacit institutions ie individual habits, group routines and social norms & values.

Result – New axioms of economic governance/policy axioms for regional development: 1. Strengthening networks of association rather than focusing on individual actors 2.encourage voice, negotiation to support vision, learning, adaptation (procedural &
recursive rationalities) 3. mobilising plurality of autonomous organisations, regional governments, institutional thickness (enterprise support, political institutions, social citizenship) [civil society]
4. solutions that context specific, sensitive to local path dependencies [Development connection]

New Regionalism Shift in economic policy focus is bound up with new interest in regional agglomeration. (New understanding influenced by, contributes to, and policies focused on). This has two strands: 1.”new economic geography” related approach – Porter 1994, and Krugman 1995 endogenous growth theory (harnessing endogenous growth, not simply competing to attract capital) – focusing on economies of proximity and exchange (transaction costs, specialised skills and technology) 2.more institutionally-based (more nuanced?) Approach of economic geographers looking at local social, cultural, institutional arrangements. Looking in more detail at untraded interdependencies – tacit knowledge based on face-to-face exchange/embedded routines, habits and norms/local conventions/reciprocity and trust (mysteries in the air?). Both proximity and trust underpin sharing uncodified knowledge which is at a premium now that codified knowledge is ubiquitous. Limitations of stress on comparative advantage of face-to-face learning environment (Amin & Cohendet 1999)—ignoring relational proximity of global links (GIS), underestimation of transaction cost savings of size, under appreciation a variety of learning outcomes influenced by difference in rationality/cognitive frames [Brown & Duguid – why knowledge sticks in some situations & leaks in others]. Do strengths of networks derive from learning capabilities or ability to anticipate change/adapt?
however both reflect the Marsh alien factors, just the latter is a richer account – EGT relies on “rather tired agglomeration factors”. Consensus = regional level industrial configs/supply-side characteristics/institutional arrangements matter in securing success in competitive globalizing economy. Both strands of the new regionalism imply practical action transcending limits of traditional economic development initiatives – building a wealth of regions (not the individual firm), when upgrading of economic/institutional/social base as Barack was it for entrepreneurial success. For example supply base (skills/education/innovation/Communications), institutional base (the relevant agencies/business organisations/autonomous political representation) to help make particular sites centres of competitive advantage. As well as rationalities/form of interdependencies (Granovetter loose ties, interactive decision- making, recursive knowledge – Delorme 1997). Generic supply-side upgrading (transport/communications infrastructure, training and skills) not sufficient. Amelia Romagna, Bardon Furstenberg etc. show policy action on supporting classes of interrelated industries with long roots in region skill or capabilities base (Path Dependence). Integrated with initiatives such as small firm support, entrepreneurial support, initiatives to attract investors; Technology transfer and training. Distilling support organisations such as trade associations, large and small farm lobbies, unions, chambers of commerce – to support upgrading, capacity building, decision making. Institution governance suggest desirability of independent representative associations, participatory decision-making. (Michael Porter consultancy group = Monitor.) If In contrast to emphasis on path dependent, contact specific approaches, tendency in mainstream cluster approach =
generic solutions copied from experience of successful regions, standardised. A few regions developing unique strategies, and not every region can be “world-class industrial district”. Failure to recognise centrality of some “softer” influences: 1. learning capability. Strength of successful regions supposedly an ability to learn/anticipate future possibilities, compared to industrial/institutional login, reactive adaptation. Achieved more obviously through links between academia/industry
[knowledge economy], human capital and labour market, fifth and the contributions of these mainly to codified knowledge. Less obviously is the quality of ties – extent of trust, sufficient loose ties (Granovetter) to allow dynamism. Forms of rationality/cognitive frames -- rule-based = ill equipped to learning/adaptation, procedural => incremental adjustment adaptation, reflexive with strategic and call monitoring behaviour (Sabel 1994) allowing experimental anticipation/actions. Stifling effects of culture of command and hierarchy at way it is a patriot governance is so important. Ability of actor networks to develop external gays/management and coordination structure that can foresee opportunities and secure rapid response, openness, diversity of knowledge, ability to sub all turn groups to break grip of hegemonic interests [KNOWLEDGE ECONOMY --- ADAPTABILITY TO NEW KNOWLEDGE IN ORGANIZATIONS].

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