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Lecture 11

Lecture 11 April 2.doc

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University of Toronto St. George
Political Science

Table of contents1. Regional effects of industrial development paths2. New industrial spaces and super-clusters3. Evolution of Bostons Route 128 region4. Traded vs. untraded interdependencies5. Toward a theory of clustering: dimensions and trade-offs6. Knowledge-based clusters: local buzz and global pipelinesK1. Regional effects of industrial development pathsRStorper & Walker (1989: 96) criticise the common view that industries follow location factors in choosing optimal locationsiInstead: industries create regional resources and not the other way around .IFurther: firms and sectors generate their own input histories, and those of their chosen regions . In this sense, industries create their regionsIThis leads to an evolutionary perspectiveTIndustrial location/regional disparities are explained as processes of industrial evolution through several stageseFigure.FIn Canada economic activity is concentrated in 3 metropolitan areas. Automobile industry is concentrated in the GTA. If we look at where industries are located we have to look at the spatial economy. Highly localized. How do such areas develop and why do industries locate so closely to one another. Industries locate in certain areas then shape them and a structure develops according to the development of the industry. It can happen anywhere, as long as there is labour and some support facilities. There is a wide window of locational opportunity because they dont really know what a low cost optimal production will be. In the beginning of an industry products will be sold at a high price, and you dont have to focus on cost minimizing. Growth might be related to two types of development could be from some leading large firms or might b related to networks of small firms that collaborate closely and establish new ideas and provide incentives for other start ups to locate in that area.eIn the third stage of the industry you might find dispersion where the strong clusters develop active linkages with other regions, there will be networks established between regions. There will be offshoots, but they should not be seen as a threat, look at Silicon Valley. They were worried offshoots would weaken the industry, but it strengthened it. Established growth peripheries and strengthened the centre.sFourth stage: shift of the centre could occur because of a completely new technological development. t1. Regional effects of industrial development paths(a) Localization of new industries: (Initially, few locations can be excludedILabour markets/supplier networks do not yet existLThey have to be createdTWindows of locational opportunity are wide open(b) Selective clustering:(Some regions develop durable advantages/continue to attract firms/spin-offs/employees oInternal/external economies lead to selective clustering:I. Vertically-integrated networks of large firmsII. Vertically-disintegrated production complexesI1. Regional effects of industrial development paths(c) Dispersion:DNew investments/partial relocations to establish new growth peripheriesNThis is an expression of expansion, NOT a threat to existing locations(d) Shifting centre:SRadical spatial shifts are possible, if fundamental restructuring/renewal of older industries occurs iThis is not necessarily associated with industrial declineTIt may be a consequence of the rise of new industriesINew windows of locational opportunities open upNSequence is not deterministic/not all stages must occurS2. New industrial spaces and super-clustersNIn a similar way, Scott (1988) identified new industrial spaces that developed after the Fordist crisis(a) Away from traditional industrial core regions(b) Within core regions, BUT: socially separatedWExamples of new industrial spaces: EHigh-tech industries (e.g. Silicon Valley) HDesign/craft-oriented industries (e.g. Third Italy) DRegional networks in knowledge-based services (e.g. Paris)RReasons for their growth: RNew demand conditions/segmented marketsNNew computer-based technologies Enable extended social division of labour ERegional production networks reduce transaction costsRIn the U.S when it seemed to be clear that mass industries were so dominant in the post war period and then these mass industries entered a period of crisis and there were new developments going on in other places. He called them new industrial spaces. Conclusion: these new industrial spaces they tend to shoot off in different areas from the location of the former technology. They can be in the same industry but socially divorc
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