Geography Reference
In-Depth Information
9
Emergence of regional clusters: the role of spinof s
in the early growth process
Michael S
.
Dahl, Christian R
.
Østergaard and Bent Dalum
1. Introduction
The literature on regional clusters has increased considerably during the last decade.
Most of the theories focus on explaining their growth, internal dynamics and structure.
The emergence and growth patterns are usually explained by such factors as unique
local culture, regional capabilities, tacit knowledge or the existence of location-specii c
externalities (knowledge spillovers, networks, labour market pooling and specialised
suppliers). However, these factors are not sui cient to explain the early formation of
clusters, when it grows from one to many i rms. The location-specii c externalities are
non-existing when there is only one company, that is, there are no labour market pooling
externalities or knowledge spillovers. Additional i rms have to enter the cluster before
networks between employees working in various cluster-i rms are formed, before knowl-
edge spillovers occur and before i rms can benei t from labour market pooling.
The dominant theories focus more on explaining ex post dynamics of clusters than
their early development. This chapter focuses on the early phase and uses an alternative
approach to analyse the role of geography in the formation of clusters. Three key deter-
minants are identii ed: (1) the geographical dimension of entrepreneurial activity, (2)
spinof s from successful i rms and (3) new market opportunities. The chapter studies the
evolution of the wireless communications cluster in Northern Denmark and compares it
with the evolution of other clusters.
Section 2 presents the theoretical framework on the emergence of clusters with discus-
sions of the geographical dimension of entrepreneurial activity, the role of spinof s and
market growth. Section 3 describes the methodology. The history of the wireless cluster
is described in section 4. Section 5 gives an overview of the generation of new i rms in
the cluster. This evidence is discussed and compared with studies of four other clusters in
section 6, followed by the conclusions in section 7.
2. The emergence of clusters
The formation of clusters consists of several phases and the role of geography is chang-
ing during the evolution and over the industry life cycle. The process of clustering is not
deterministic and might stop at various stages. The i rst i rm in a cluster can, if success-
ful, grow. It can be unsuccessful and close. However, a single i rm is not a cluster. By
dei nition numerous i rms are needed. Firms can be attracted to the region, local i rms
can diversify from other industries, or new i rms can be founded. The entry of addi-
tional i rms is a key process in the emergence of clusters, where few i rms grow to many.
This process of early period evolution from a single i rm to a cluster has, however, only
received little attention in the literature.
Alfred Marshall (1920) observed that i rms within the same industry often cluster in
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