Urban Amenities or Agglomeration Economies? Locational Behaviour and Entrepreneurial Success of Dutch Fashion Designers

Urban economic growth and industrial clustering is traditionally explained by Marshallian agglomeration economies benefiting co-located firms. The focus on firms rather than people has been challenged by Florida arguing that urban amenities and a tolerant climate attract creative people, and the firms they work for, to certain cities. We analyse to what extent these two mechanisms affect the locational behaviour of Dutch fashion designers. On the basis of a questionnaire, we find that urban amenities are considered more important than agglomeration economies in entrepreneurs’ location decision. Designers located in the Amsterdam cluster do not profit from agglomeration economies as such, but rather from superior networking opportunities with peers both within and outside the cluster.Agglomeration economies, urban amenities, creative class, fashion design, cultural industries, social networks, cluster

Beyond clusters: Fostering innovation through a differentiated and combined network approach

Over the past decades, economic and innovation policy across Europe moved in the direction of creating regional clusters of related firms and institutions. Creating clusters through public policy is risky, complex and costly, however. Moreover, it is not necessary to rely on clusters to stimulate innovation. A differentiated and combined network approach to enhancing innovation and stimulating economic growth may be more efficient and effective, especially though not exclusively in regions lacking clusters. The challenge of such a policy is to mitigate the bottlenecks associated with ‘global pipeline’, ‘local buzz’ and ‘stand alone’ strategies used by innovative firms (cf. Bathelt et al. 2004; Atzema & Visser 2005b), and to combine these strategies with a view to their complementarity in terms of knowledge effects. Private and semi-public brokers will be key in the evolving policy, as timely organizational change is crucial for continued innovation, while brokers also need to mitigate governance problems. This requires region-specific knowledge in terms of sectors, life cycles, institutional and socio-cultural factors, and yields spatially differentiated and differentiating adjustment strategies. The role of public policy is to assist in recruiting, provide start-up funding and monitor brokers. With this, policy moves towards a decentralized, process-based, region-specific, spatially diverging and multi-level system of innovation that is geared towards the evolving innovation strategies of firms.innovation policy, clusters, networks, governance, regionalization

Embedding Stand-Alone, ‘Local Buzz’ and ‘Global Pipeline’ Firms; a Plea for a Less Traditional Regional Innovation Policy

This paper deals with the policy implications of a research project based on a non-traditional approach to innovation measurement in a Dutch region. This region is characterized by an ‘innovation paradox’, as it lodges large numbers of ‘creative’ people while it also underperforms in traditional innovation measurements. A survey among experts regarding regional innovation yields large numbers of innovative firms in a wide range of industries, which in traditional studies would partly go unnoticed. Further data analysis reveals that innovation in the region has no clear face in terms of firms and sectors. This is due to the embroynic state of clustering in different subsectors, the mostly social and informal nature of network ties between entrepreneurs in the region, the international level at which much innovation-oriented networking takes place, and the lack of connectivity between the latter networks and local informal networks and the embryonic clusters. In terms of their innovation profile, firms in the region are strong in creative, non-technical and combined forms of innovation. So, dynamic capabilities especially show up ‘downstream’, connecting novelty with clients and markets, and translating this into change management and new practices. Next, we found that firms strategically engage in innovation ventures, in the three ways that were explained before by Bathelt et al. (2004), i.e. seeking and combining international knowledge with one’s own (constructing ‘global pipelines’), strengthening regional ties, identity, contact and linkages (‘local buzz’), and relying on one’s own resources for innovation (‘stand alone’ strategy). One challenge for policy is to exploit these three strategies of firms. Such can be done in three ways. One is to use the abundant social capital in the region, with a view to strengthening the economic relevance of existing local networks by constructing and extending ‘global pipelines’. The second is to display leadership and formulate a ‘community argument’ for innovation (dealing with the following sub questions: why must I innovate, why must I interact in networks and clusters, and why should I do so at different spatial scales?), thus strategically reorienting the available ‘local buzz’ and enhancing its economic relevance. Together, these two proposals serve the purpose of stimulating knowledge flows ‘outside-in’ and ‘inside-out’ (cf. Wolfe & Gertler 2005). The third is to correct for the policy myopia on cluster and network initiatives. The price we pay for the Porterian approach to clustering (cf. Martin & Sunley 2003; Hospers 2005) is that a significant number of firms in the region under review that individually engage in innovation processes, are not part of ‘global pipeline’ and ‘local buzz’ processes. Hence, they do not enrich nor benefit from these processes, and may thus relatively easy leave the region. Finally, they may be less effective in innovation, in terms of speed and the market fit of new products and processes. So, both from a regional and firm-level perspective, stand-alone firms merit attention.

Agglomeration economies and the location of new information and communication technology (ICT) firms in the Netherlands

In 2000, the world wide, rapid employment growth in the ICT-sector came to an end. Knowledge-intensive ICT-firms and -sectors in the Netherlands confirmed to this negative development trend as well. The life-cycle of the ICT-sector appears to reach a new phase of development, dominated by saturation of demand and enforced competition. This might affect the localised growth in the ICT-sector as well. According to evolutionary interpretations of agglomeration theory, one expects that new ICT firms start up in knowledge intensive, urban setting in order to gain from localised knowledge spillovers. The recent empirical literature is not unambiguous clear upon the role of intra- and intersectoral (specialisation or sectoral diversity based) agglomeration circumstances that determine firm formation, growth and survival patterns. In later stages of sectoral development, three kinds of spatial developments are expected from the geographical growth literature: (1) a cummulative causation based process of growth within the preliminary urban settings; (2) a dispersion process towards suburban and adjacent rural regions based on physical network and proximity conceptualisations, (3) spatial growth transmittance and firm dispersion based on functional network spatial relationships which are predominantly non-contiguous in character. For the latter category of spatial economic dynamics, the degree of urbanisation, accessibility, regional labour market- and national zoning spatial regimes are assumed to be leading spatial conceptualisations. A favourable macro-economic growth perspective, as present in the Netherlands during our research period, is assumed to speed up (and condition) spatial economic dispersal patterns. To test these spatial growth transmittance and firm dispersal hypotheses we analyse the components of growth (new firm formation, survival and growth in incumbent firms) of a large dataset of in total 36,000 ICT firms in the Netherlands for the period 1996-2000. The papers empirically distinguishes in-situ urban growth, contiguous relations in growth patterns (starting on an initially low, intra-urban spatial scale) and heterogeneous (non-contiguous) spatial research designs. Conclusions are drawn in relation to the recent agglomeration and economic growth literature.

The Geography of Internet Adoption by Retailers

Up till now, the literature on Internet adoption by retailers paid little attention to spatial variables. Using data on 27,000 retail outlets in the Netherlands, we investigate the geographical diffusion of Internet adoption by Dutch retailers. More precise, we examine to what extent retail Internet adoption differs between shopping centers, cities, and regions, while controlling for product and organizational variables. Results of the linear and multinomial logistic regressions suggest that shops at city centers are more likely to adopt the Internet than shops located at shopping centers at the bottom of the retail hierarchy. Furthermore, shops in large cities have a higher probability to adopt the Internet than shops in small cities. On the regional level, the likelihood of Internet adoption is higher for shops in core regions than for retail outlets in the periphery. In conclusion, geography seems to matter for retail Internet adoption.evolutionary economics, internet adoption, retailing