Policies for new path development: the case of Oxfordshire

This chapter reflects on how evolutionary economic geography (EEG) can be extended to incorporate public policy in its explanations of path development. A weakness of EEG is the poor conceptualisation of the role of the state (central, regional, local) in regional path development. It is therefore argued that a multi-scalar perspective of policy is required and that a large set of policies deserve attention. Oxfordshire in the UK is used to explore the link between public policy and path development

Skill-relatedness and firm diversification

Because of the importance of human capital, a firm's choice of diversification targets will depend on whether these targets offer opportunities for leveraging existing human resources. We propose to quantify the similarity of different industries' human capital or skill requirements, that is, the industries' skill relatedness, by using information on cross-industry labor flows. Labor flows among industries can be used to identify skill relatedness, because individuals changing jobs will likely remain in industries that value the skills associated with their previous work. Estimates show that firms are far more likely to diversify into industries that have ties to the firms' core activities in terms of our skill-relatedness measure than into industries without such ties or into industries that are linked by value chain linkages or by classification-based relatedness

The Dynamics of Agglomeration Externalities along the Life Cycle of Industries

This paper investigates the changing roles of agglomeration externalities along the industry life cycle. It is argued that industries have different agglomeration needs in different stages of their life cycles because their mode of competition, innovation intensity, and learning opportunities change over time. For twelve Swedish manufacturing industries, it is determined for each year between 1974 and 2004 whether the industry is in a young, intermediate, or mature stage. Whereas Marshall-Arrow-Romer (MAR) externalities steadily increase with the maturity of industries, the effects of local diversity (Jacobs' externalities) are positive for young industries, but decline and even become negative for more mature industries