Paper to be presented at the DRUID Summer Conference 2007

on

APPROPRIABILITY, PROXIMITY, ROUTINES AND INNOVATION

Copenhagen, CBS, Denmark, June 18 - 20, 2007

FACTORS AND MECHANISMS CAUSING THE EMERGENCE OF LOCAL INDUSTRIAL CLUSTERS - A META-STUDY OF 159 CASES
Thomas Brenner Max-Planck-Institute for Research into Economic Systems brenner@econ.mpg.de Andr Mhlig Max-Planck-Institute for Research into Economic Systems

Abstract: Local industrial clusters have attracted much attention in the recent economic and geographic literature. A huge number of case studies have been conducted. This paper offers a meta-analysis of the case studies of 159 local industrial clusters in various countries and industries. Guided by a theory about the emergence of such clusters it analyses the involvement of many local conditions and processes. The paper offers an overview on the knowledge that is gathered in these case studies and a comparision between continents, new and old clusters, and high- and low-tech industries.

JEL - codes: , ,

Factors and Mechanisms Causing the Emergence of Local Industrial Clusters - A Meta-Study of 159 Cases
Thomas Brenner and Andr Mhlig e u Max-Planck-Institute for Research into Economic Systems Evolutionary Economics Unit Kahlaische Str. 10 07745 Jena, Germany

ABSTRACT . Local industrial clusters have attracted much attention in the recent economic and geographic literature. A huge number of case studies have been conducted. This paper oers a meta-analysis of the case studies of 159 local industrial clusters in various countries and industries. Guided by a theory about the emergence of such clusters it analyses the involvement of many local conditions and processes. The paper oers an overview on the knowledge that is gathered in these case studies and a comparision between continents, new and old clusters, and high- and low-tech industries. KEYWORDS : local industrial clusters, case studies, meta study, local conditions. JEL classication: L60, O18, R12

Thomas Brenner and Andr Mhlig e u

1. Introduction In the recent economic and geographical literature, the phenomenon of local industrial clusters has attracted much attention. Under the headings of industrial districts, industrial local clusters, innovative milieu and regional innovative systems, the reasons why certain regions are successful while others are not have been extensively studied. Two kinds of approaches dominate this literature: case studies of regions that are identied as being economically successful (more than 200 such studies are analysed here) and more general theoretical approaches that aim to identify some of the circumstances that cause regions to be successful (such approaches can, for example, be found in Becattini 1990, Porter 1990, Scott 1992, Camagni 1995, Markusen 1996 and Brenner 2004). Furthermore, approaches in the so-called New Economic Geography explain the existence of local industrial clusters on the basis of mathematically modelling or simulating economies of location (Krugman 1991 and Fujita & Thisse 2002). All this literature tries to examine, why local industrial clusters exist, how they emerge and why they are successful in comparison to other locations. In this paper we focus on the question of how local industrial clusters emerge. Especially we address the question of what are the circumstances or prerequisites for the emergence of industrial clusters in a region. This questions has been addressed in many of the case studies that have been conducted. However, dierent case studies come to dierent results. A study that combines the ndings of the various case studies is missing. Hence, the literature provides us with a huge number of single studies and a few studies in which 2, 3, 4 or some more clusters are compared. In addition, the case studies are conducted on the basis of dierent concepts and assumptions. Thus, it is dicult to grasp a clear picture about what really causes the emergence of local industrial clusters. Only one large meta-study can be found in the literature (van der Linde 2003). It is based on the theory of Porter (see Porter 1990). This means that van der Linde focuses the meta-study on the factors that Porter claimed to be important, mainly four factors. He studies whether these factors play a role according to the case studies of 833 local clusters. He nds evidence for three of the four factors. Furthermore, he provides additional statistics about various characters, such as age and size, of the analysed clusters. However, he does not provide more detailed information about whether the factors have to occur together or on what their importance depends. Furthermore, the meta-study by van der Linde is restricted to the four factors claimed by Porter.

A Meta-Study of Local Clusters

We use a dierent theoretical background and examine 35 factors in total. Furthermore, we analyse the dierences in the importance of these factors between industries, countries and in time. As a consequence, the analysis is restricted to 159 local industrial clusters that are analysed in detail. In total 184 publications are used to conduct this study, quite some of them containing several case studies. The paper proceeds as follows. In Section 2 the theoretical background is outlined. In Section 3 the methodology used and the local characteristics and processes that are included in the analysis are described and discussed. Section 4 describes the sources for this study, including how the cases are selected and some basic statistics about the local industrial clusters chosen. In Section 5 the basic ndings are presented and some fundamental issues discussed. The comparison between countries, industries and points in time is conducted in Section 6. Section 7 concludes. 2. Theoretical background The literature provides us with various dierent concepts, such as clusters, industrial districts or innovative milieux. Each of them is based on dierent assumptions about the most important processes in the context of clustering. One of the main aims of this paper is to analyse case studies independent of one specic concept. The theory of local industrial clusters developed by Brenner (see Brenner 2001a and 2004) provides such a general framework that embraces the dierent available concepts. This theory is based on the assumption that local self-augmenting processes occur in certain industries (see Brenner 2001a). These self-augmenting processes cause a situation in which for each region two stable stationary states exist: a state with a low activity in the industry under consideration and a state with an industrial cluster. This means that local industrial clusters only exist if the self-augmenting processes are strong enough. In which of the two stable states a region is found in such a case is determined by the history of the region. The history is determined by the initial conditions in the region and by events. Therefore, Brenner (2004) identies two fundamentally dierent kinds of conditions for the emergence of a local industrial cluster. First, suciently strong local self-augmenting processes have to take place. Second, the region has to have suciently favourable characteristics and conditions and the actors within the region have to be suciently active. Each of the two conditions can be satised by quite a number of dierent factors

Thomas Brenner and Andr Mhlig e u

and processes. For example, local self-augmenting processes might be provided by the mutual positive impact of the number of rms and the number of spin-os in a region. A higher number of rms results, on average, in a higher number of spinos, which in turn implies a faster increase of the number of rms. There are many other such self-augmenting processes, such as the interaction between rms and the local human capital or the mechanisms of spillovers and cooperation between rms (see Brenner 2000 for a discussion of various self-augmenting processes). Local self-augmenting processes might be provided by all mechanisms that are characterised by a positive feedback loop between the local activity related to the cluster, such as employment or rm numbers, and some local factor. Quite a number of mechanisms might satisfy this condition (see Brenner 2001a). These are spin-os, the support of start-ups by rms, spillovers, cooperation among rms, impact of other rms location on location choices, buyer-supplier-relations, and interactions of the rm population with the accumulation of the local human capital, public education and research, local policy makers, local venture capitalists, and the local public opinion. All these mechanisms might constitute a local selfaugmenting process but do not necessarily imply such a process. It depends on the importance and the characteristics of these mechanisms whether a suciently strong local self-augmenting process results. Hence, it depends on the industry and location under consideration whether a self-augmenting process occurs and which of the above mechanisms is most relevant. The theory only tells us that, at least, one of these mechanisms has to be given if a local industrial cluster emerges. The same holds for the favourable conditions in a region. Again many dierent factors might inuence the location of industrial clusters. These are public opinion and cultural aspects, local policies, national policies, geographic location, type of region, universities and public research, technology parks, industrial structure, local capital market, local demand, suppliers, networks, wages, infrastructure, quality of life, and qualied labour. In addition, the emergence of local industrial clusters is often triggered or supported by specic actions. These actions depend on the region because the region has to provide the adequate actors. Furthermore, chance plays a role because these actors have to do the right thing at the right time. Therefore, these actions can only be partly attributed to the region but often play an important role. These actions are promoting activities, specic policy measures, historical events or preconditions, specic innovations, and foundings of leading rms. Again, the theory does not tell us which of these factors and events has to be

A Meta-Study of Local Clusters

given for a local industrial cluster to emerge. It tells us that these factors and events have to be seen as substitutes and that the likelihood of the emergence of a local industrial cluster increases with the quality of these factors and the occurrence of these events. To sum up, there are two fundamentally dierent types of conditions for the emergence of local industrial clusters. On the one hand, there are mechanisms that cause local self-augmenting processes, which are necessary for the emergence of clusters. On the other hand, various local factors and events increase the likelihood of such an emergence of clusters. A large group of mechanisms, factors and events exist that might be alternatively causal to the emergence of local industrial clusters. Theory tells us that one of each type of conditions should be, at least, visible in each emergence of a cluster. 3. Methodology Which of the above mechanisms, factors and events cause each emergence of a local industrial cluster is an empirical question. It has to be studied for each cluster separately. However, only if we combine the knowledge obtained in such studies of specic clusters, we are able to develop a comprehensive picture about the emergence of local industrial clusters. Therefore, this paper combines the ndings of many case studies, 159 case studies to be exact. The common framework that is necessary for such a study is provided by the above theory. This theory oers a number of alternative explanations, in the form of mechanisms, factors and events, for the emergence of local industrial clusters. We check these alternative explanations in each case study. But one has to keep in mind that until now no primary research case study was conducted testing the concept used here. This means that the authors of the case studies might not be aware of all possible causes and inuences that are studied here. Hence, for each case study and each potential explanation our examination results in one of three outcomes: Class I: The author of the case study states the potential explanation to be present and important. Class U: The author of the case study states the potential explanation as not given or unimportant. Class N: The case study does not provide any information about the potential explanation.

Thomas Brenner and Andr Mhlig e u

Reading a case study, we are able to classify the case study with respect to each potential explanation into one of the three classes above. As a result, we obtain a matrix in which each row presents a local industrial cluster and each column presents a potential explanation for its emergence. Each cell of this matrix contains either an I, a U, or a N. For some local industrial cluster more than one case study is available. In these cases all available case studies are used. If the results for the case studies vary for a potential explanation, the following rules are applied: If only the classes I and N appear, the cluster is classied as I. If only the classes U and N appear, the cluster is classied as U. If the classes I and U are mentioned by dierent authors, it is looked for further evidence in other sources. If further evidence is found, this evidence is used for a classication into I or U (including a mark of uncertainty). If no further evidence could be found, it was classied as N. These rules imply that if a potential explanation is considered only in some of the case studies for one local industrial clusters, only the case studies that mention this explanation are considered. In this way 159 local industrial clusters are classied with the help of 184 publications (see the appendix of this paper for a list of these publications ). We study in total 35 potential explanations for the emergence of local industrial clusters. According to the above theory, these explanations are distinguished into mechanisms, factors and events. The theory predicts that, at least, one mechanism has to be given for the emergence of local clusters. Furthermore, the factors and events have to be suciently positive for a cluster to emerge. In the following the 35 potential explanations are described. Whether they are relevant in a specic case is determined as described above. The mechanisms that we consider in this study are Spin-os (SPIN): A higher or important spin-o activity within the cluster. Support of start-ups by rms (SUP-START): Existing rms do activily support start-ups within the cluster. Intra-industrial spillovers (INTRA-SPILL): Important intra-industrial spillovers (including formal and informal spillovers as well as the moving of employees between rms) take place within the cluster.
Will be added later.

A Meta-Study of Local Clusters

Inter-industrial spillovers (INTER-SPILL): Important inter-industrial spillovers (including formal and informal spillovers as well as the moving of employees between rms) take place within the cluster. Cooperation among rms (COOP): Cooperation is common within the cluster. Choice of co-location with other rms (COLOC): Firms deliberately choose to locate near to other rms of dierent industries, so that they end up in the cluster. Buyer-supplier-relations (BUYSUP): Cooperation between buyer and supplier industries is common in the cluster. Accumulation of the local human capital (F-HC): Accumulation of human capital exists within the cluster. Interaction with public education and research (F-EDU/RES): Cooperation takes place between rms and public education or research institutes, such as scientic spin-os or joint research projects. Interaction with local policy makers (F-POL): Interactions between local policy makers and the emergence of the cluster take place. Interaction with local venture capitalists (F-VC): Interactions take place between venture capitalists and cluster rms, such as a specic co-location or a focus of venture capitalists on cluster-specic activities. Interaction with local public opinion (F-OPIN): Interactions take place between the public opinion and the cluster rms, such as interest and support for the cluster in the region or the impact of existing cluster rms as role models for further entrepreneurs in the region. Local factors that might play a role are: Public opinion and cultural aspects (CULT): Specic attitudes towards selfemployment, cooperation, or innovation are present within the cluster. Local policies (LOC-POL): Local policy makers take measures that are favourable for the cluster activities. National policies (NAT-POL): National policy makers take measures that are favourable for the cluster activities. Geographic location (GEOGR): Location has certain characteristics that are relevant for the activities in the cluster, such a natural resources, access to the see, or climatic conditions.

Thomas Brenner and Andr Mhlig e u

Type of region (TYPE): Regions can be classied according to their population density in to classes such as metropolies, cities, or rural areas. Universities and public research (UNI/RES): Relevant public research institutes exist in the region. Qualied labour (LABOUR): Labour in necessary quality and quantity is available in the region. Technology parks (TECH-PARK): A technology park exists in the region. Industrial structure (IND): Other industries that are important for the clustering industry are present in the region. Local capital market (CAPITAL): Sucient nancial resource, through banks or venture capitalists, for investments are available in the region. Local demand (DEMAND): The region is characterised by a high or technology/fashion-oriented demand for the products of the cluster. Suppliers (SUPP): An adequate set of suppliers exists in the region. Networks (NET): Networks (institutional, social or personal) exist in the region. Wages (WAGE): Salaries are low in the region. Infrastructure (INFRA): The region is characterised by an attractive infrastructure (including airports, ports, railway connections, and roads). Quality of life (LIFE): The region oers favourable life conditions, such as high air quality, attractive cultural infrastructure and good housing infrastructure. Tradition and historical preconditions (TRAD): The history and tradition of the region are favourable for the clustering industry. Finally, the following events are included in the study: Promoting activities (PROM): Inuencial local promoters (single persons, groups of people, dierent organisations, etc.) who support the cluster acitivies exist in the region. Specic policy measures (SPEC-POL): Policy makers take specic measures that directly supported the development of the cluster. Historical events (HIST): Historical events exist that had an inuence on the cluster development. Specic innovations (INNO): Major innovations are discovered in the region that are related to the cluster activities. Founding of leading rms (LEAD-FIRM): A leading or important rm exists in the region.

A Meta-Study of Local Clusters

Chance (CHANCE): Other events occur in the region that are classied by the authors of the case studies as happening by pure chance. All these events are stochastic in nature. This means that the characterisics of a region do only partly determine their occurrence. Nevertheless, we also include the more general event CHANCE in our analyse because quite some authors simply talk about the fact that the local industrial cluster emerged by chance without stating a specic event that triggered this development. In the above lists many aspects seem to appear several times. Policies are an example, showing up as mechanism (F-POL), as factor (LOC-POL and NAT-POL) and as event (SPEC-POL). It might be helpful to explain the dierences between these explanation-variables here in order to make the dierence between mechanisms, factors and events clearer. Variable F-POL represents the mechanism that a large number of rms might inuence local policy makers and thus change local policy in such a way that the rm population is able to prosper. This means that variable F-POL relates to changes in policies. Instead the factors LOC-POL and NAT-POL represent the long-term political environment, meaning all policy aspects that remain stable for longer periods of time and cannot be changed even by a large number of rms in a short period of time. Events, in contrast to mechanisms, are not triggered by a large number of rms. They are, thus, exogenous with respect to the emergence of the local industrial cluster. Hence, SPEC-POL contains all short-run policy measures that are taken by policy makers independent of the emergence of the local industrial, but maybe in order to support or trigger such an emergence. For all other aspects that appear above in dierent lists, similar distinctions are taken. Through this, the dierent explanation-variables are dened such that they do not overlap and the classication of statements in case studies with respect to the above list can be easily done. More problematic is the fact that many of these potential explanations are not mentioned by each author of a case study. As a consequence, we obtain a matrix that contains many N-entries (no information). The aims should be to have only I- (factor is important) and U-entries (factor is unimportant) in the matrix. However, without repeating all case studies this is not possible. For the analysis we have to decide how to deal with the N-entries. It can be assumed that the authors of case studies focus their attention on the factors, events and processes that are important for the emergence of the local industrial cluster they study. Hence, they should point out most of the important variables, while variables on which the case studies contain no information should be most

10

Thomas Brenner and Andr Mhlig e u

likely unimportant. Therefore, we focus our analysis below on the I-entries in the matrix that we obtain. This problem could only be solved by conducting further case studies in which all above dened possible explanations are considered. As a consequence, we keep in mind that the variables vary in their prominence. As a consequence, some of them might show up less often in the case studies simply because the authors do not think about them in their analysis. Thus, the comparison between the frequency of the dierent variables should be interpreted with care. 4. Data Case studies of local industrial clusters are the source of information in this study. All case studies that describe the emergence of a local industrial cluster and that we became aware of were included in the analysis. We used the very broad denition of a local industrial cluster by Brenner (2004) which includes industrial districts, innovative milieus, and local clusters for the identication of local industrial clusters. Thus, the analysis is not restricted to any of the concepts available in the literature. The only restriction we took is that only case studies are included in the analysis that contain a detailed description and/or analysis of the emergence of the local industrial cluster. In total 184 publications are considered in this analysis (the references are given in the appendix). Some of them concern the same local industrial cluster, so that in total 159 local industrial clusters are represented (some also contain several cases). Besides the check of each explanation-variable, for each local industrial cluster the approximate date or period of emergence, the country in which it is located and the main industry in the cluster are recorded. In total there are 86 local industrial clusters from Europe included in the study. 32 clusters belong to North America, 25 to Asia, 10 to Africa, 4 to South America and 2 to Australia. A complete list of all countries is given in Table 1. It is clear that not all countries are represented by an equal share. Some countries are well studied while other are not studied or only studied in local language. Similar arguments can be put forward with respect to the time of the emergence of local industrial clusters. Analysing local industrial clusters has become very prominent in the last 20 years. Therefore, it can be expected that this period of time is over represented in the case studies. Table 2 shows that this is not the case. Nevertheless, local industrial clusters that emerged recently are somewhat more frequent in the sample. We divided time into time periods of 20 years and assigned

A Meta-Study of Local Clusters

11

Europe Austria Belgium Danemark Danemark/Sweden Finland France Germany Ireland Italy Norway Portugal Russia Spain Sweden Switzerland The Netherlands U.K. 3 1 3 1 2 4 18 1 15 4 1 1 3 6 4 3 16

North America Canada 5 Mexico 2 U.S.A. 25

South America Brasil 2 Columbia 2

Asia China India Japan Pakistan South Korea Taiwan

1 4 16 1 2 1

Africa Ghana Kenia South Africa

2 6 2

Australia Australia

Table 1: Number of local industrial clusters from each country that are included in the analysis.

each local industrial cluster to one of these time periods if possible. The frequency of each time period is given in Table 2.

time of emergence before 1909 1910-1929 1930-1949 1950-1969 1970-1989 after 1990

number of cases 28 11 18 31 41 16

Table 2: Number of local industrial clusters from each time period that are included in the analysis (14 cases could not be classied).

The sample of local industrial clusters that are included in this analysis represent a very heterogeneous sample of industries. It is neither dominated by high-tech in-

12

Thomas Brenner and Andr Mhlig e u

dustries nor by low-tech industries. A classication of the analysed local industrial clusters into one of the standard industry classications is often not possible because many clusters span across these classes and we have to rely on the description of the authors of the case studies. Therefore, we use categories that are frequently used by the authors of the case studies themselves and build some prominent classes. The frequencies are given in Table 3.

industry Textile & leather ICT Life science Media Electronics, instruments & optics Furniture, juwelery & musical instruments Automotive Metals Agriculture, shery & food Maschines High-technology (general) Tourism & Culture Glas & ceramics Banking & business services Airspace Ship building Others

number of cases 25 23 15 13 12 10 9 9 8 8 5 5 4 4 2 2 5

Table 3: Number of local industrial clusters from each industrial class that are included in the analysis.

The distributions of the local industrial clusters that are included in this study in time, space and industry shows that local clustering is not a specic phenomenon. It is very general and the cases that are included here seem to be adequate to capture the wide range of this phenomenon. 5. Basic ndings The conduction of this meta-study, rst of all, resulted for each of the above mechanisms, factors and events in a count of the number of case studies that mention these to be relevant. Hence, the most straight-forward way of presenting

A Meta-Study of Local Clusters

13

the results is to list these frequencies. According to these frequencies the dierent mechanisms, factors and events can be ranked. However, we have to be aware of the fact that the most often stated variable is not automatically the one that is most often involved in the emergence of local clusters. It might well be a more frequently important variable is less often mentioned because the authors of the case studies do not believe in its importance or it was simply not studied (e.g. because of dierent intentions of the case studies or an only narrow study of some parts of the cluster). The source of our study, the 159 case studies, are the results of a subjective evaluation of the situation and developments in the analysed regions. Nevertheless, such a ranking of the variables should give us some information about their importance. It can be expected that there is at least a positive correlation between the subjective accounts of the case study authors and reality. It is, however, likely that some variables are systematically underestimated. We list the frequencies of the various variables again in three lists because the theory predicts that mechanisms, factors and events are within each group substitutes while the groups are complementary to each other. For the mechanisms the frequencies are presented in Table 4. The accumulation of human capital results to be the most frequently mentioned of all variables. Human capital is also prominently mentioned in the literature on local industrial clusters (see, e.g., Saxenian 1994). Hence, it can be assumed that most case study authors are well aware of the potential inuence of this factor, although in 33 of the 159 cases that are analysed here it is unclear what role the accumulation of human capital plays. This implies that the real value should not be much greater than the identied frequency of 116. Due to our method it is also most likely not smaller. We can conclude that the accumulation of human capital plays an important role in the emergence of many local industrial clusters, but not in the emergence of all of them. There are other mechanisms that seem to be nearly as important, such as the cooperation of rms, the choice of rms to co-located and spillover. All other mechanisms are also found to be important in some or quite a number of case studies. Furthermore, we have to take into account that some mechanisms are not mentioned in more than 120 of the studied 159 cases. It is unclear whether the authors of the case studies simply do not take them into account due to dierent reasons (like dierent intention of the case study) or whether they play no role in these cases. This is the already mentioned drawback of such a secondary analysis. However, the results above imply that there seems not to be one mechanism that is responsible for the emergence of all local industrial clusters. Nevertheless, local

14

Thomas Brenner and Andr Mhlig e u

mechanism F-HC COOP COLOC INTRA-SPILL F-EDU/RES SPIN F-POL INTER-SPILL F-OPIN F-VC SUP-START BUYSUP

important 116 87 83 81 66 60 49 46 44 35 31 30

unimportant 10 22 3 14 19 4 10 1 9 6 6 8

not known 33 50 73 64 74 95 100 112 106 118 122 121

Table 4: Frequency of each mechanism to be mentioned as an important factor for the emergence of the local industrial cluster in the respective case studies.

self-augmenting mechanisms, as we called them, seem to be very important. In 155 of the 159 cases, at least, one of the above mechanisms is found to be an important factor. None of the case studies mentions all these mechanisms to be important at the same time. Thus, the theoretical prediction that these mechanisms represent substitutable conditions for the emergence of local industrial clusters is conrmed, at least in 155 of the 159 cases. They appear in dierent combinations in the case studies, none appears always, but at least one of them is mentioned in these 155 cases. On average, 4.6 dierent mechanisms are found to be important in each case. Studying the local factors that inuence the emergence of local industrial clusters, the variable LABOUR is most often mentioned. However, this might again be caused by the fact that other local factors are less prominent among researchers conducting case studies. The frequency for all analysed local factors are given in Table 5. Again it can be easily seen from this table that none of the local factors is important in all case studies and that usually more than one factor is involved in the emergence of local clusters. On average, 10.2 dierent local factors are involved according to the subjective assessment in the case studies. Researcher seem to tend to identify a lot of dierent local factors that might have caused or supported the emergence of a local cluster. The literature on local clusters focuses very much on the specic situation of the location as the cause for the positive development. According to the above theory, local factors are only one of the three conditions

A Meta-Study of Local Clusters

15

for the emergence of a local clusters. The evidence from this meta-study at least conrms that, at least, one of the local factors has to be given. In the 159 cases that are studied here the number of local factors that are identied as important range from 2 to 17, which means all.

local factors LABOUR NET UNI/RES TRAD IND LOC-POL INFRA CULT GEOGR DEMAND NAT-POL SUPP LIFE CAPITAL WAGE TYPE TECH-PARK

important 105 78 70 66 61 56 52 52 51 49 47 43 31 30 23 21 21

unimportant 10 37 22 10 2 18 10 14 2 20 8 13 18 16 10 0 9

not known 44 44 67 83 96 85 97 93 106 90 104 103 110 113 126 138 129

Table 5: Frequency of each local factor to be mentioned as an important factor for the emergence of the local industrial cluster in the respective case studies.

Finally, there is the class of variables that we called events. These events are rarely discussed in the conceptual literature on local industrial clusters. This might be one reason for the fact that they show up with a lower frequency in the analysed case studies. The frequencies of the various events been found as important in the case studies are listed in Table 6. There also exist 36 case studies in which none of these events is mentioned to be important. Nevertheless, in the remaining 123 case studies, at least, one event is stated to have been inuencial. On average, 1.4 events are highlighted in each case study. The above analysis shows that many variables are involved in each emergence of a local industrial cluster and that each local cluster is specic in its mix of variables involved. The theoretical prediction that there are three groups of variables and

16

Thomas Brenner and Andr Mhlig e u

events LEAD-FIRM SPEC-POL HIST PROM INNO CHANCE

important 62 53 52 22 15 14

unimportant 4 10 0 7 4 1

not known 93 96 107 130 140 144

Table 6: Frequency of each event to be mentioned as an important factor for the emergence of the local industrial cluster in the respective case studies.

that each of them has to be represented in each emergence of a local industrial cluster has been mainly conrmed. We also obtained a ranking for the average importance of each variable. However, this has to be used with care. First, some variables might be under represented because the authors of case studies tend to ignore them. Second, some case studies contain no information because they were conducted for a dierent intention. Third, we have seen that each local industrial cluster is individual, so that it is unclear what such an average ranking tells us.

6. Dierences in industry, time and space Above it is discussed that the overall frequency with which the dierent variables are mentioned to be important in the case studies have to be interpreted with care. The various variables dier in their prominence, so that they are not all examined with the same rigourness. However, this kind of bias in the case studies can be expected to be relatively independent of the specic case study at hand. Hence, the results of a comparison between dierent case studies is more reliable. Three kinds of comparisons are of specic interest: a comparison between dierent points in time, a comparison between high- and low-tech industries, and a comparison between dierent parts of the world. First, we analyse whether the variables that play a role for the emergence of local industrial clusters have changed in time. Especially we want to know whether nowadays dierent variable play a role than in earlier times. Therefore, we compare the relevance of each variable for the cluster emergence between the local industrial clusters that developed before 1950 and after 1950. We also compare the times before 1970 and after 1970 in order to study the very recent developments. All

A Meta-Study of Local Clusters

17

35 variables are examined. However, only the signicant changes are presented in Table 7.

Variable SUP-START F-EDU/RES F-POL F-VC LOC-POL NAT-POL GEOGR UNI/RES TECH-PARK IND CAPITAL LIFE SPEC-POL HIST CHANCE

Comparison: post 1950 vs. ante 1950 > (0.020) > (0.006) > (0.011) > (0.009) > (0.007) > (0.040) < (0.011) > (0.039) > (0.003) > (0.032) > (0.013) > (0.001) < (0.032) < (0.018)

Comparison: post 1970 vs. ante 1970 > (0.012) > (0.041) > (0.044) > (0.047) > (0.027) < (0.001) > (0.010) > (0.001) < (0.003)

> (0.000) < (0.001)

Table 7: Signicant dierences (signicance level: 5%, result that are signicant on a 1%-level are bold) in the importance of the variables for the emergence of local industrial clusters during dierent periods of time (> (<) means that the variable becomes signicantly more (less) important moving from the rst time period to the second; in brackets the p-value is given according to Fishers exact test).

This comparison delivers some interesting results. Most variables that are listed in Table 7 are more frequently mentioned in the studies of newer local industrial clusters. There are only four variables that seem to have lost importance. These are the geographic location (GEOGR) of the region, the industrial structure in the region (IND), historical events (HIST) and chance (CHANCE). The rst is well in line with the argument of globalisation. The geographic location of a region becomes less and less relevant for its economic development. According to the above analysis it decreases especially from before 1970 to after 1970, which reects the recent trend to globalisation. Besides this, historical events and pure chance seem to have played a more important role before 1950 than after 1950. Chance seems

18

Thomas Brenner and Andr Mhlig e u

to have further decreased after 1970. Furthermore, the local industrial structure has lost importance after 1970. Nowadays, specic policy measures seem to be more important as triggering events. Among the local conditions, policy (LOC-POL and NAT-POL), university and public research (UNI/RES), technology parks (TECH-PARK), the availability of venture capital (CAPITAL) and the quality of life (LIFE) have increased in importance, the importance of NAT-POL, UNI/RES and TECH-PARK has especially increased after 1970. Most of these local factors depend on policy. Hence, a much greater importance is assigned to policy in the case studies of newer local industrial clusters than in the case studies of older clusters. Policy seems to increasingly interfer with the development of local clusters. There are also some self-augmenting processes that have gained in importance over time. Existing rms play a more important role for supporting new startups (SUP-START). Furthermore, the interaction between rms and universities, public research (F-UNI/RES), local policy (F-POL), and local venture capital (FVC) has increased in importance. This implies that the local interaction between dierent local actors has become more important nowadays, as it is, e.g. argued in the concept of the triple helix (see Leydesdor 2000). Let us now move to examining the dierences between high- and low-tech industries. We use two sources for a distinction of the industries: the denition of high- and low-tech industries according to Hatzichronoglou (1997) and the definition of knowledge-intensive and not-knowledge-intensive industries by Grupp, Jungmittag, Legler und Schmoch (2000). We nd that the results for the two distinctions of industries are very similar. Again we list only the variables for which the importance diers signicantly between the industries. This is done in Table 8. An obvious fact, comparing Table 7 and 8, is that there are more dierences between industries than in time. However, many of the dierences that are found between local industrial clusters that developed before 1950 and after 1950 are also found between high- and low-tech industries, or between knowledge-intensive and other industries. The reason for this is that local clusters in high-tech industries are, on average, younger than local clusters in low-tech industries. Nevertheless, a number of additional dierences are found between high- and low-tech industries. For the self-augmenting processes cooperation between rms (COOP) seems to play a more important role in the low-tech industries. However, that might be caused by the strong focus on cooperation in the Italian studies, where low-tech

A Meta-Study of Local Clusters

19

Variable SPIN SUP-START COOP F-HC F-EDU/RES F-VC LOC-POL NAT-POL TYPE GEOGR UNI/RES LABOUR TECH-PARK CAPITAL INFRA LIFE WAGE PROM SPEC-POL HIST LEAD-FIRM

Comparison: high-tech vs. low-tech > (0.000) > (0.001) < (0.001) > (0.009) > (0.000) > (0.004) > (0.010) > (0.000) < > > > > (0.000) (0.000) (0.001) (0.000) (0.001)

Comparison: knowledge-intensive vs. non-knowledge-intensive > (0.001) > (0.001) < (0.001) > (0.000) > (0.010) > (0.006) > (0.000) > (0.003) < (0.002) > (0.000) > (0.003) > (0.000) > (0.006) > (0.015) > (0.000) < (0.000) > (0.015) > (0.003) < (0.023) > (0.000)

> (0.000) < (0.001) > (0.017) > (0.003) < (0.009) > (0.000)

Table 8: Signicant dierences in the importance of the variables for the emergence of local industrial clusters in dierent kinds of industries (the meaning of the entries are as in Table 7).

industries dominate. In high-tech industries the self-augmenting processes are comparably more often provided by spin-os (SPIN), the support of start-ups by established rms (SUP-START), and the interaction of the existing rm population with the local human capital (F-HC), universities and public research (F-UNI/RES), and local venture capitalists (F-VC). Especially the last three variables are clearly related to the needs of rms in high-tech industries. There are two local factors that play a stronger role in the emergence of local industrial clusters in low-tech industries than in high-tech industries. These are the geographic location (GEOGR) and low labour costs (WAGE). The former might be explained by the correlation between old clusters and the involvement of low-tech

20

Thomas Brenner and Andr Mhlig e u

industries, which are more dependent of natural resources. The latter is related to the fact that in low-tech industries location decisions are very much based on labour costs. In high-tech industries, instead, the availability of qualied labour plays a more important role (LABOUR). Furthermore, local factors, such as the local infrastructure (INFRA), universities and public research (UNI/RES), and technology parks (TECH-PARK), are more important in high-tech industries than in low-tech industries. However, most of these factors are also more important for newer local clusters than for older local clusters. This holds especially for the policy related factors (LOC-POL, NAT-POL, LIFE, and TECH-PARK). For these factors it is not clear whether they show up more often in high-tech clusters because they are more relevant there or because they have become more relevant with time and high-tech clusters are usually less old. In the case of the importance of local events, specic policy measures (SPECPOL) are found to be more relevant in high-tech industries, while historical events (HIST) matter more for low-tech industries. Again the same dierences in importance are found between old and new local industrial clusters, so that the causal relations are not clear. However, two new dierences show up between high- and low-tech industries: the emergence of high-tech local clusters is more often triggered by local promoters (PROM) and the existence of leading rms (LEAD-FIRM). It seems that specic persons and individual outstanding rms are of a higher importance in high-tech industries than in low-tech industries. This might be caused by the importance of innovations and technological leadership in high-tech industries. Finally, we turn to dierences between countries. We study two kinds of dierences here: the dierences between developed and developing countries and the dierences between the continents. Since, continental Europe diers from U.K. more than the USA diers from U.K., we distinguish between the anglo-saxion sphere (Australia, Canada, U.K. and USA), continental Europe, and Asia. The other continents are not reected by a sucient number of case studies in this analysis. The results of these comparisons are given in Table 9. Again, some of the ndings can be explained by the correlation with other characteristics of the local industrial clusters. High-tech clusters are more frequent in the developed countries. Thus, it is not surprising that some variables, such as SPIN, F-EDU/RES, LOC-POL, UNI/RES, WAGE, LIFE, HIST and LEAD-FIRM, show up in the same way in the comparison of developing and developed countries as in the comparison of high- and low-tech industries. More interesting are the facts that the decision to locate near to other rms of the same industry (COLOC) and the

A Meta-Study of Local Clusters

21

Variable SPIN COOP COLOC BUYSUP F-EDU/RES F-POL F-VC F-OPIN CULT LOC-POL NAT-POL TYPE UNI/RES CAPITAL SUPP WAGE INFRA LIFE TRAD HIST INNO LEAD-FIRM

Comparison: developed vs. developing countries > (0.000) < (0.030) < (0.011) > (0.001)

Comparison: anglo-s. vs. cont. Europe

Comparison: anglo-s. vs. Asia > (0.036) < (0.006)

Comparison: cont. Europe vs. Asia > (0.002)

> (0.000) > (0.001) > (0.011) > (0.000) > (0.000) > (0.017) > (0.003) > (0.000) > (0.014)

> (0.000) > (0.001) > (0.011) > (0.001)

> (0.024) > (0.023) > (0.029) < (0.028) < (0.000) > (0.012) > (0.003) < (0.040) < (0.021) > (0.008) > (0.010) < (0.001) > (0.012) > (0.005) > (0.003) > (0.001) > (0.009) > (0.038)

> (0.000)

Table 9: Signicant dierence in the importance of the variables for the emergence of local industrial clusters in dierent countries (the meaning of the entries are as in Table 7).

relationships between buyers and suppliers (BUYSUP) seem to play a more important role for the emergence of local clusters in developing countries. In addition, the availability of suppliers in a region (SUPP) is a more important local factor in developing countries than in developed countries. This leads to the conclusion that the interaction between rms plays a more important role in less developed countries, while the interaction between rms and universities and public research plays a more important role in more developed countries. The comparison between the three groups of countries also shows some relations with the other comparison. Especially, Asia contains some developing countries

22

Thomas Brenner and Andr Mhlig e u

while the other two groups do not contain such countries. Therefore, it can be expected that some dierences between third world countries and developed countries show up also between Asia and the other two groups. However, the dierences should be much weaker because 19 of the 25 local clusters in Asia that are studied are located in developed countries. Therefore, we discuss the dierences between the three groups of countries independent of the analysis above. An interesting nding is that the anglo-saxian sphere does not dier from continental Europe with respect to the relevant local self-augmenting processes, while Asia diers strongly in the relevant processes from the other two country groups. In Asia spin-os (SPIN) and the interaction of the existing rm population with universities and public research (F-UNI/RES), the local policy makers (F-POL), local venture capitalists (F-VC), and the local public opinion (F-OPIN) play a less important role. In the case of the interaction with local venture capitalists continental Europe seems to be somewhere between Asia and the anglo-saxian sphere. In contrast, cooperation between rms (COOP) plays in Asia a more important role, while continental Europe is again somewhere between. Especially the ndings for the variables F-VC and COOP are well in line with the general nding that venture capitalists play a stronger role in the anglo-saxian sphere, while Asia has a more cooperative attitude. The results for the relevance of the various local factors are more mixed. The anglo-saxian sphere is outstanding for the strong relevance of the type of region (TYPE) and the infrastructure (INFRA). Continental Europe shows a comparable strong inuence of the tradition of regions (TRAD). Asia deviates by showing a weeker dependence on the public opinion and cultural aspects (CULT), on universities and public research (UNI/RES), and on the quality of life in the region (LIFE). In the case of the national policy (NAT-POL) and the availability of capital (CAPITAL) there is again a gradient in importance from the anglo-saxian sphere to continental Europe and nally Asia with the lowest importance. With respect to the relevance of specic events and dynamics in the regions, two dierences are detected between the three groups of countries. First, the anglosaxian sphere shows a strong importance of major innovations. This goes in line with the argument in the literature that especially the USA economy is strong in transferring major inventions into market products. Second, the founding of lead rms plays a signicantly stronger role in continental Europe than in the other two groups of countries.

A Meta-Study of Local Clusters

23

7. Conclusions This paper presents a meta-study of a large number of case studies of local clusters. Furthermore, it provides a theoretical framework on which dierent local cluster can be compared. The framework consists of a distinction of three groups of variables that inuence the emergence of local clusters. In total 35 dierent mechanisms, factors and events are considered. It is studied whether these variable appear to be important in the local clusters that are examined in the literature. As the theoretical framework predicts, we nd that none of the mechanisms, factors and events is found to be important in all case studies. The mechanisms of the emergence of local clusters dier tremendously between the cases. Nevertheless, some mechanisms, factors and events show up more often then others. Finally, the analysis is used to detect dierences between various kinds of clusters, such as clusters in developed countries compared to clusters in developing countries or clusters in high-tech industries compared to clusters in low-tech industries. Many interesting results are obtained. For example, it is found that with time (comparing clusters before and after 1950 and 1970) the geographic location and the present industrial composition have lost in importance while policy intervention and location interactions of various kinds have gained importance. The latter point is striking, given the fact that everybody talks about globalisation. Furthermore, high-tech local clusters are found to be based more than low-tech local clusters on variables related to human capital, public research and policy intervention. Comparing dierent groups of countries with each other we found that cooperation plays a more important role in Asia, while the local interaction between rms and public research, policy makers, venture capitalists and the public opinion play a less important role there. In continental Europe the emergence of local clusters are characterised by a relatively stronger inuence of the founding of leading rms and the tradition of regions. The anglo-saxian sphere is characterised by a higher importance of major innovations, national policies and venture capital. The main problem of conducting this meta-study is the fact that the authors of case studies might not consider all potential inuences as they are, for example, proposed in the Brenner concept. Thus, there might be important variables that are not mentioned in all case study in which they should be mentioned. Therefore, we hope that in the future authors of case studies use our list or any other common list of potential variables in analysing specic local cluster. That would lead to

24

Thomas Brenner and Andr Mhlig e u

more comparable results and would allow to judge more reliably the importance of dierent variables. References
Becattini, G. (1990). The Marshallian Industrial District as a Socio-economic Notion. In: (F. Pyke, G. Becattini & W. Sengenberger (Eds.)) Industrial Districts and Inter-rm Co-operation in Italy, pp. 37-51. Geneva: International Institute for Labour Studies. Brenner, T. (2000). The Evolution of Localised Industrial Clusters: Identifying the Processes of Self-organisation. Papers on Economics & Evolution #0011, Max Planck Institute Jena. Brenner, T. (2001a). Self-organisation, Local Symbiosis of Firms and the Life Cycle of Localised Industrial Clusters. Papers on Economics & Evolution #0103, Max Planck Institute Jena. Brenner, T. (2004). Local Industrial Clusters: Existence, Emergence and Evolution. London: Routledge. Camagni, R.P. (1995). The Concept of Innovative Milieu and Its Relevance for Public Policies in European Lagging Regions. Papers in Regional Science 74, 317340. Fujita, M. & Thisse, J.-F. (2002). Economics of Agglomeration - Cities, Industrial Location, and Regional Growth. Cambridge: Cambridge University Press. Grupp, H., Jungmittag, A., Legler, H. & Schmoch, U. (2000). Hochtechnologie 2000 - Neudenition der Hochtechnologie fr die Berichterstattung zur technologischen u Leistungsfhigkeit Deutschlands. mimeo, Fraunhofer-Institut fr Systemtechnik und a u Innovationsforschung ISI, Karlsruhe. Hatzichronoglou, T. (1997). Revision of the High-Technology Sector and Product Classication. STI Working Papers 1997/2, OCDE/GD(97)216, OECD, Paris. Krugman, P. (1991). Increasing Returns and Economic Geography. Journal of Political Economy 99, 483499. Leydesdor, L. (2000). The Triple Helix: An Evolutionary Model of Innovations. Research Policy 29, 243-255. Markusen, A. (1996). Sticky Places in Slippery Space: A Typology of Industrial Districts. Economic Geography 72, 293-313. Porter, M.E. (1990). The Competitive Advantage of Nations. New York: The Free Press. Saxenian, A.-L. (1994). Regional Advantage. Cambridge: Harvard University Press. Scott, A.J. (1992). The Role of Large Producers in Industrial Districts: A Case Study of High Technology Systems Houses in Southern California. Regional Studies 26, 265-275. van der Linde, C. (2003). The Demography of Clusters - Findings from the Cluster Meta-Study. In: (J. Brcker, D. Dohse & R. Soltwedel (eds.)) Innovation Clusters o and Interregional Competition, pp. 130149. Berlin: Springer.