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The Associational Economy: Firms, Regions, and Innovation
TL;DR: In this article, the authors propose a model for economic development, the associational model, as a third way between state planning and market-driven approaches to development, which correlates high capabilities in social interaction and communication, particularly in the forms of high trust, learning capacity, and networking competence, with the economic and social success of a firm.
Abstract: Proposes a model for economic development, the associational model, as a third way between state planning and market-driven approaches to development. The associational model correlates high capabilities in social interaction and communication, particularly in the forms of high trust, learning capacity, and networking competence, with the economic and social success of a firm. As the process of innovation becomes increasingly collaborative, this social capital can be decisive to the outcome. Because much collaboration involves tacit knowledge, that is, knowledge that has not been put into a tradeable or expressible form, successful collaboration requires personal interaction and shared experiences. Accordingly, the importance of less hierarchical corporate governance forms and local and regional milieux emerge. The consequence of these trends is the ascendancy of the region as the locus of learning and collaboration that drive innovation. Four regional case studies are presented: Baden-Wurttemberg, Emilia-Romagna, Wales, and the Basque Country. The final chapter traces the intellectual roots of the authors' study - the ideas of Schumpeter, Veblen, Marx, and Hayek - and concludes with a sketch of how an associational approach may be implemented by policy makers. (CAR)
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TL;DR: In this article, the authors analyse different types of regions with respect to their preconditions for innovation, networking and innovation barriers and develop different policy options and strategies based on this classification.
2,632 citations
TL;DR: In this paper, the authors explore the case for regional systems of innovation and advocate the strengthening of regional level capacities for promoting both systemic learning and interactive innovation, based on the notion of regions as occupying different positions on a continuum referring to processes constituting them and their powers vis-a-vis innovation policy.
2,172 citations
TL;DR: In this paper, the authors argue that clusters are inserted into global value chains in different ways, and that this has consequences for enabling or disabling local-level upgrading efforts, and pay particular attention to the position of developing country firms selling to large, global buyers.
Abstract: Humphrey J. and Schmitz H. (2002) How does insertion in global value chains affect upgrading in industrial clusters?, Reg. Studies 36, 1017–1027. What is the scope for local upgrading strategies where producers operate in global value chains? The literature on industrial clusters emphasizes the role of inter-firm co-operation and local institutions in enabling upgrading. The value chain literature focuses on the role of global buyers and chain governance in defining upgrading opportunities. This paper argues that clusters are inserted into global value chains in different ways, and that this has consequences for enabling or disabling local-level upgrading efforts. It pays particular attention to the position of developing country firms selling to large, global buyers.
2,044 citations
TL;DR: The authors argue that path dependence and lock-in are place-dependent processes, and as such require geographical explanation, but little is known about why some regional economies become locked into development paths that lose dynamism, whilst other regional economies seem able to avoid this danger and in effect are able to reinvent themselves through successive new paths or phases of development.
Abstract: In recent years, economic geographers have seized on the concepts of `path dependence' and `lock-in' as key ingredients in constructing an evolutionary approach to their subject. However, they have tended to invoke these notions without proper examination of the ongoing discussion and debate devoted to them within evolutionary economics and elsewhere. Our aim in this paper, therefore, is, first, to highlight some of the unresolved issues that surround these concepts, and, second, to explore their usefulness for understanding the evolution of the economic landscape and the process of regional development. We argue that in many important aspects, path dependence and `lock-in' are place-dependent processes, and as such require geographical explanation. However, the precise meaning of regional `lock-in', we contend, is unclear, and little is known about why it is that some regional economies become locked into development paths that lose dynamism, whilst other regional economies seem able to avoid this danger and in effect are able to `reinvent' themselves through successive new paths or phases of development. The issue of regional path creation is thus equally important, but has been rarely discussed. We conclude that whilst path dependence is an important feature of the economic landscape, the concept requires further elaboration if it is to function as a core notion in an evolutionary economic geography.
1,907 citations
TL;DR: In this paper, a critical analysis of the prevailing implicit and explicit economic geographies of tacit knowledge, focusing on the relationship between tacit knowledge and institutions, is presented, with a focus on the role and origins of social context.
Abstract: Within economic geography and industrial economics, interest in the concept of tacit knowledge has grown steadily in recent years. Nelson and Winter helped revive this interest in the work of Michael Polanyi by using the idea of tacit knowledge to inform their analysis of routines and evolutionary dynamics of technological change. More recently, the concept has received closer scrutiny. This paper offers a further contribution to this project by offering a critical analysis of the prevailing implicit and explicit economic geographies of tacit knowledge, focusing on the relationship between tacit knowledge and institutions. While much of the innovation literature focuses on a single question ^ can tacit knowledge be effectively shared over long distances ^ the paper argues that this issue cannot be properly addressed without considering a broader range of related questions. It highlights three tacit knowledge problems which, together, provide a more complete view of this issue. First, how is tacit knowledge produced? Second, how do firms find and appropriate tacit knowledge? Third, how is tacit knowledge reproduced or shared ^ that is, how does tacit knowledge promote social learning processes, and must the participants be geographically proximate in order for effective learning to occur? The paper revisits Michael Polanyi’s original conception of tacit knowledge, showing it to be limited by its experiential and cognitive emphasis, with insufficient attention devoted to the role and origins of social context. Alternatively, the paper argues that one cannot sort out the geography of tacit knowledge without inquiring into the foundations of context and culture, and the institutional underpinnings of economic activity, taking the work of another Polanyi ^ Karl ^ as the logical starting point.
1,803 citations