The industrial rise of the Third Italy: Open windows of locational opportunity?

The article aims to test a theoretical concept (the Window of Locational Opportunity concept) which provides a particular perspective with respect to the key problem in economic geography of how to explain the ability of regions to generate or apply new technology. In short, this WLO-concept holds the view that windows of locational opportunity tend to open up in the event of new techno-industrial development: these are likely to provide opportunities of industrial development for both leading and backward regions. This is because the impact of space may be unpredictable and rather weak for several reasons: there is likely to be a poor match with the new requirements of new techno-industrial activities, their creative ability may safeguard their development in unfavourable places, while local conditions favourable to their development are likely to be of a generic nature. Following the principles behind this theoretical concept, we present a long-term spatial analysis of Italy, which aims to explain the industrial rise of the Third Italy region in the post-war period. It attempts to assess empirically the impact of spatial conditions (including culture) on the industrial rise of the so-called Third Italy region during its initial stage of development in the 1950s and 1960s. A regression technique has been used to determine which of many potential factors (for instance, culture, industrial specialization, infrastructure and low-cost, flexible labour) in the 1950s could be held responsible for the particular type of industrial development in the Third Italy area, which was based on dense networks of flexible, strongly related, small and medium-sized firms in craft-based industries (clothing, ceramics) in a number of specialized industrial districts. By doing so, we focus attention on the extent to which the industrial rise of the Third Italy region was a rather accidental event that could also have occurred in other regions such as the First Italy (the industrial heartland of the North) and the Second Italy (the backward South). The preliminary results at this stage of the analysis tend to point out that the cultural dimension makes the difference: this particular type of industrial development took place in the Third Italy region because of a local culture of entrepreneurship and cooperation which seems to be lacking to some degree in the other regions in Italy.

Evolutionary economic geography and its implications for regional innovation policy

Related variety is important to regional growth because it induces knowledge transfer between complementary sectors at the regional level. This is accomplished through three mechanisms: spinoff dynamics, labor mobility and network formation. They transfer knowledge across related sectors, which contributes to industrial renewal and economic branching in regions. Since these mechanisms of knowledge transfer are basically taking place at the regional level, and because they make regions move into new growth paths while building on their existing assets, regional innovation policy should encourage spinoff activity, labor mobility and network formation. Doing so, policy builds on region-specific assets that provides opportunities but also sets limits to what can be achieved by policy. Public intervention should neither apply Îone-size-fits-allÌ approaches nor adopt Îpicking-the- winnerÌ strategies, but should aim to connect complementary sectors and exploit related variety as a source of regional diversification.related variety, evolutionary economic geography, regional innovation systems, regional growth

The Spatial Evolution of Innovation Networks: A Proximity Perspective

We propose an evolutionary perspective on the geography of network formation that is grounded in a dynamic proximity framework. In doing so, we root the proximity concept in an evolutionary approach to the geography of innovation networks. We discuss three topics. The first topic focuses on explaining the structure of networks. The second topic concentrates on explaining the effects of networks on the performance of actors. The third topic deals with the changing role of proximity dimensions in the formation and performance of innovation networks in the longer run.evolutionary economic geography, knowledge networks, innovation networks, dynamic proximity

Technological relatedness and regional branching

The relatedness between the technologies used among firms in a region is thought to affect the nature and scope of knowledge spillovers. In this paper, we set out how the concepts of technological relatedness and related variety have enriched recent literature in economic geography. First, applying the notion of related variety has led to new insights in the externalities literature. There is increasing evidence that regions with different but technologically related activities (related variety) benefit more from spillovers. Second, the technological relatedness concept has provided additional insights to the question whether extra-regional linkages matter for regional growth: it is not inflows of extra-regional knowledge per se, but inflows of knowledge that are related to the existing knowledge base of regions that might be crucial. Third, the concept of relatedness has found its way in network analysis. There is evidence that collaborative research projects tend to create more new knowledge when they consist of agents that bring in related competences. Linking network dynamics to the industry life-cycle approach, one expects that cognitive proximity levels between cluster firms will increase over time, with detrimental effects on their performance levels. Fourth, the cluster literature often regards labor mobility as a key mechanism through which knowledge diffuses, but no attention has been paid to relatedness until recently. And fifth, studies demonstrate that countries and regions tend to expand into sectors that are closely related to their existing activities. To the extent that new industries emerge from related industries, the sectoral composition of a regional economy affects the diversification opportunities of regions in the long run. This process of sectoral branching occurs primarily at the regional level, because it becomes manifest through a number of knowledge transfer mechanisms (i.e. spinoff activity, firm diversification, labor mobility and networking) that tend to be geographically bounded.evolutionary economic geography, technological relatedness, regional branching, related variety

Why is economic geography an evolutionary science?

During the past two decades, evolutionary economics has emerged as one of the innovative fields of research in economics, and in particular in the fields of the economics of technical change and theory of the firm (Nelson and Winter 1982; Dosi et al. 1988; Arthur 1994; Dosi et al. 2000). Parts of their subjects concern issues traditionally dealt with by economic geographers and regional scientists, including localised technological spill-overs, agglomeration economies, product life-cycle studies, international trade, spatial diffusion and regional policy. In some of these studies geography has been 'rediscovered', in particular those who are interested in uneven growth and development of regions and countries, and those who examine the role of proximity in technological innovation. In this paper, we aim to elaborate on a research programme for "evolutionary economic geography" following on a previous work (Boschma and Lambooy 1999). In short, the distinctive nature of such a programme lies in the integration of temporal (path-dependent) processes of economic change with spatial analysis of conditions and effects of such processes. For example, processes of structural change in economic regions are addressed as path-dependent and to a large extent irreversible economic processes that are enabled and constrained by technological and institutional networks that exist from the past (Boschma 1999). Similarly, the concept of national systems of innovation can be given an explicit evolutionary meaning when a national systems is modelled as an evolving complex system containing an interrelated set of institutions (Frenken 2000). It is further argued that the traditional research questions of economic geography and regional science remain pertinent, but that evolutionary economics provides a rich set of analytical and empirical tools to address these questions. Among these tools are: (i) simulation techniques from complexity studies that explicitly links micro-economic processes and macro-economic structures, (ii) empirical techniques that indicate the rate and nature of technical change, and historical studies that emphasise the role of "small events" in explaining long-run evolutionary specialisation patterns.

Knowledge networks in the Dutch aviation industry: the proximity paradox

The importance of geographical proximity for interaction and knowledge sharing has been discussed extensively in economic geography in recent years. There is increasing consensus that it is just one out of many types of proximities that might be relevant. We argue that proximity may be a crucial driver for agents to connect and exchange knowledge, but too much proximity between these agents on any of the dimensions might harm their innovative performance at the same time. In a study on knowledge networks in the Dutch aviation industry, we test this so-called proximity paradox empirically. We find evidence that the proximity paradox holds to some degree. Our study clearly shows that cognitive, social and geographical proximity are crucial for explaining the knowledge network of the Dutch aviation industry. But while it takes cognitive, social and geographical proximity to exchange knowledge, we found evidence that proximity lowers firms's innovative performance, but only in the cognitive dimension.proximity, paradox, social network analysis, knowledge networks, aviation

Cluster Evolution and a Roadmap for Future Research

There is increasing recognition that the existence of clusters can only be understood when studying their dynamics over time (Audretsch and Feldman 1996; Pouder and St. John 1996; Swann et al. 1998; Maggioni 2002; Brenner 2004; Iammarino and McCann 2006; Menzel and Fornahl 2010; Ter Wal and Boschma 2011). In fact, clusters may be best understood as products of a path-dependent process (Martin and Sunley 2006). In that context, scholars have described the main features of cluster development over time, and have explored the driving forces behind their evolution. In their seminal contribution, Menzel and Fornahl (2010) proposed a cluster life cycle model in which firms enter and exit the cluster, capabilities of cluster firms develop and interact (and might converge), and inter-organizational linkages within and beyond the cluster are established and dissolved along the cluster life cycle.Downward causation, Economic landscape, emergence, Evolution, Supervenience

The cognitive and geographical composition of ego-networks of firms – and how they impact on their innovation performance

Firms’ embeddedness into knowledge networks has received much attention in the literature. However, little is known about the composition of firms’ ego-networks with respect to different types of proximities. Based on survey data of 295 firms in eight European regions, we show that the ego-networks of firms systematically differ in their geographical and cognitive embeddedness. We find that firms’ innovation performance is stimulated if the firm primarily links to technologically related firms as well as technologically similar organizations. Connecting with organizations at different geographical levels yields positive effects as well.ego-networks, geographical proximity, innovation performance, knowledge networks, technological relatedness

The emerging empirics of evolutionary economic geography

Following last decadeÕs programmatic papers on Evolutionary Economic Geography, we report on recent empirical advances and how this empirical work can be positioned vis-ˆ-vis other strands of research in economic geography. First, we review studies on the path dependent nature of clustering, and how the evolutionary perspective relates to that of New Economic Geography. Second, we discuss research on agglomeration externalities in Regional Science, and how Evolutionary Economic Geography contributed to this literature with the concepts of cognitive proximity and related variety. Third, we go into the role of institutions in Evolutionary Economic Geography, and we relate this to the way Institutional Economic Geography tends to view institutions. From this discussion, a number of new research challenges are derived.evolutionary economic geography, clusters, related variety, institutions, regional branching