The paper is concerned with spatial clustering of economic activity and its relation to the spatiality of knowledge creation in interactive learning processes. It questions the view that tacit knowledge transfer is confined to local milieus whereas codified knowledge may roam the globe almost frictionlessly. The paper highlights the conditions under which both tacit and codified knowledge can be exchanged locally and globally. A distinction is made between, on the one hand, the learning processes taking place among actors embedded in a community by just being there dubbed buzz and, on the other, the knowledge attained by investing in building channels of communication called pipelines to selected providers located outside the local milieu. It is argued that the co-existence of high levels of buzz and many pipelines may provide firms located in outward-looking and lively clusters with a string of particular advantages not available to outsiders. Finally, some policy implications, stemming from this argumen...

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Clusters and knowledge: local buzz, global pipelines and the process of knowledge creation

Two different models - one based on local geographical externalities and the other on the variety of only locally available intermediate services - are shown to give rise to a simple, estimable relation between employment density and productivity. Using data on gross state output for the U.S., we find that agglomeration more than offsets congestion effects in denser areas. While our estimate of the elasticity of productivity with respect to density is small, it explains more than 50% of the observed state productivity differences, given the large differences in density.

Productivity and the Density of Economic Activity

Over the past decade, there has been growing interest in local industrial agglomeration and specialization, not only by economic geographers but also by economists and by policy-makers. Of the many ideas and concepts to have emerged from this new-found focus, Michael Porter's work on ‘clusters’ has proved by far the most influential. His ‘cluster theory’ has become the standard concept in the field, and policy-makers the world over have seized upon Porter's cluster model as a tool for promoting national, regional, and local competitiveness, innovation and growth. But the mere popularity of a construct is by no means a guarantee of its profundity. Seductive though the cluster concept is, there is much about it that is problematic, and the rush to employ ‘cluster ideas’ has run ahead of many fundamental conceptual, theoretical and empirical questions. Our aim is to deconstruct the cluster concept in order to reveal and highlight these issues. Our concerns relate to the definition of the cluster concept, its theorization, its empirics, the claims made for its benefits and advantages, and its use in policy-making. Whilst we do not wish to debunk the cluster idea outright, we do argue for a much more cautious and circumspect use of the notion, especially within a policy context: the cluster concept should carry a public policy health warning.

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Deconstructing clusters: chaotic concept or policy panacea?

This paper argues that existing models of urban concentrations are incomplete unless grounded in the most fundamental aspect of proximity; face-to-face contact. Face-to-face contact has four main features: it is an efficient communication technology; it can help solve incentive problems; it can facilitate socialization and learning; and it provides psychological motivation. We discuss each of these features in turn, and develop formal economic models of two of them. Face-to-face is particularly important in environments where information is imperfect, rapidly changing, and not easily codified, key features of many creative activities.

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Buzz: face-to-face contact and the urban economy

This paper argues that existing models of urban concentrations are incomplete unless grounded in the most fundamental aspect of proximity; face-to-face contact. Face-to-face contact has four main features; it is an efficient communication technology; it can help solve incentive problems; it can facilitate socialization and learning; and it provides psychological motivation. We discuss each of these features in turn, and develop formal economic models of two of them. Face-to-face is particularly important in environments where information is imperfect, rapidly changing, and not easily codified, key features of many creative activities.

Buzz: Face-to-Face Contact and the Urban Economy

Книга «Пространственная экономика – города, регионы и международная торговля» рассматривает экономику с точки зрения экономической географии – через определение, где и почему развился тот или иной вид экономической деятельности. Это новая глава в развитии экономической географии. Авторами предлагаются новые методы для моделирования, получившие начало в теориях экономического роста, международной торговли и промышленной организации. Более того, через многофакторный анализ «эффект повышения отдачи - транспортные издержки - движение продуктивных факторов» открываются возможности для новой экономической географии при решении проблем в городской, региональной и международной экономике.

The Spatial Economy: Cities, Regions, and International Trade

The Spatial Economy

We address the fundamental question arising in geographical economics: why do economic activities agglomerate in a small number of places? The main reasons for the formation of economic clusters involving firms and/or households are analyzed: (i) externalities under perfect competition; (ii) increasing returns under monopolistic competition; and (iii) spatial competition under strategic interaction. We review what has been accomplished in these three domains and identify a few general principles governing the organization of economic space. A few alternative, new approaches are also proposed. J. Japan. Int. Econ., December 1996, 10 (4), pp. 339–378. Kyoto University and University of Pennsylvania; and CORE, Universite Catholique de Louvain and CERAS–ENPC (URA 2036, CNRS).

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Economics of agglomeration

This book provides the first unifying analysis of the range of economic reasons for the clustering of firms and households Its goal is to explain further the trade-off between various forms of increasing returns and different types of mobility costs The main focus of the analysis is on cities, but it also explores the formation of other agglomerations, such as commercial districts within cities, industrial clusters at the regional level, and the existence of imbalance between regions

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Masahisa Fujita

Papers

The Spatial Economy: Cities, Regions, and International Trade

The Spatial Economy

Economics of agglomeration

Economics of Agglomeration: Cities, Industrial Location, and Regional Growth

Multiple equilibria and structural transition of non-monocentric urban configurations☆