Geography Reference
In-Depth Information
industries will be laid down layer by layer on inherited structures through the phases of
development (Arthur, 1994). In an evolutionary perspective, agglomeration can be inter-
preted as the mechanism by which existing organisations breed the new ones founded by
entrepreneurs.
This argument is a quite similar to the cluster theories that focus on location-specii c
externalities to cause industries to cluster spatially. However, these ex post dynamics can
only exist when there are several i rms located in a particular geographical location. The
externalities may or may not be important for clusters, but they can not drive the emer-
gence of clusters in the early phase.
The open window of locational opportunity (OWLO) model (Boschma and Knaap,
1999) distinguishes between two stages in the spatial evolution of a new industry. In
the initial stage the location-specii c externalities do not exist, while they may lead to
clustering in the second stage. The OWLO model argues that the novelty and discon-
tinuous nature of new industrial activities would imply that local supply of knowledge is
unlikely to determine where the new industry would evolve. Some regions may provide
some generic conditions that create a stimulating environment for new industries while
others are non-stimulating, but the new industry may initially emerge in both types of
region (Boschma and Knaap, 1999). As a result, chance events become important for
the spatial evolution. The new industry also relies on the creative ability to transform
generic conditions into specii c conditions. Thus, the new industry uses its creative ability
to create the required labour and technological knowledge or to attract it from other
regions (Boschma and Knaap, 1999; Storper and Walker, 1989). However, creation of
the necessary labour through internal training and learning ef ects does not take place
without i rms. Likewise, skilled labour is unlikely to be attracted to a region with very
few i rms. The evolution from one to many i rms is by dei nition a key process in the
emergence of clusters.
Geography has a dif erent role than proposed by much of the existing cluster literature
that focuses on the location-specii c externalities. Geography plays a role in the location
decision of entrepreneurs because they may tend to found their new i rms within close
proximity to their previous employers or close to where they reside and have social con-
tacts and family, and so on. It requires a considerable ef ort to obtain the information
and resources needed to base a i rm in another location (Sorenson, 2003).
This does not necessarily imply that i rms always will be located within close prox-
imity to their past employer and residence. There are many examples of founders who
search for the most suitable location among regions that either provide access to a large
local market or, perhaps more important, of er the best selection of resources to the
organisation. It is hard to argue that potential founders only have knowledge about
their own local environment and the local entrepreneurial opportunities (Romanelli and
Schoonhoven, 2001). Nonetheless, they argue that most new i rms will be founded in the
same region or very close to the i rm that produced the entrepreneur, since social and
economic forces will induce entrepreneurs to locate close to their origins, so they can
maintain their social ties and continue exploiting their localised knowledge of venture
capitalists, potential employees, and suppliers.
It requires a wide selection of resources and social commitments to found a i rm
(Stinchcombe, 1965). These resources, such as available technical personnel and i nancial
resources, generally tend to be immobile and unevenly distributed across geographical
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