Geography Reference
In-Depth Information
with existing manufacturing industry, itself non-innovative, might turn around even
in these least auspicious conditions. In a world of 'peak oil' and energy insecurity, the
empty i elds of the dying agricultural economy might be reinvigorated by the judicious
interactive innovation of selecting them to be suppliers of bioenergy to the manufactur-
ers who hitherto were un-innovative and thought they had nothing to discuss with the
representatives of the remaining farmers. Regions like the American mid-west, former
East Germany, not to mention central-southern Brazil, are experiencing such an evolu-
tionary regional development process because what was once a marginal and far-fetched,
systemic idea - a post-fossil fuel economy - has moved closer to the mainstream.
These changes have the consequence that, through interaction with other i rms
and agencies, the economic environment is itself modii ed as well as exerting its own
modifying ef ects. The dif usion of both codii ed and tacit knowledge among i rms
in relatively equal relationship to one another, especially where they are competitive
outside their domestic base but complementary, or even collaborative within it, is an
important source of constructed advantage for small i rms. But constructed it has to
be; for example, the aforementioned linking of traditional agro-food production with
the world of large-scale energy production requires construction of new interactive
networks. An interesting question is how precisely this happens. How, in other words,
may related industrial variety arise from unrelated? Yesterday, farmers and automotive
workers may have had little reason to interact closely except through the anonymity
of the market where food and tractors were purchased. But today, in areas that were
recently thought unviable in agro-food terms, like the region of Mecklenberg-Pomerania
in Germany, parts of northern England, and elsewhere, interactions among representa-
tive associations and research institutes from agriculture, energy and automotives have
begun discussions and announced investments in biofuels (Goodall, 2007; Jürgens et
al., 2007). The evolution of this 'revealed related variety' is why, for example, Italian
industrial districts have proven capable of maintaining a competitive edge in tradi-
tional sectors despite competition from low wage, less developed economies. They have
systemic
process elements and knowledge l ows inherent within and between them. In
periods of relative economic stability, the system generates and absorbs externalities of
the kind neoclassical theory assumes to be ei ciently internalised in the institution of
the i rm (Boschma, 2005).
Such relationships are not
hierarchical
, they are
heterarchical
. Heterarchy is the con-
dition in which network relationships pertain, based on trust, reputation, custom, reci-
procity, reliability, openness to learning and an inclusive and empowering rather than an
exclusive and disempowering disposition (Cooke, 2002). However, heterarchy does not
operate in a vacuum. Modern regional development theory, even more than evolutionary
economic theory, emphasises the importance of the socio-cultural milieu (Maillat, 1995)
within which network forms of inter-i rm organisation are embedded (Granovetter,
1985). We are not here talking about community in a simplistic and generic way, rather
about routine practices and mentalities of entrepreneurship in the context of a commer-
cial community. As Marshall (1919) put it:
. . . good work is rightly appreciated, inventions and improvements in machinery, in processes
and the general organisation of the businesses have their merits promptly discussed; if one
person starts a new idea, it is taken up by others and combined with suggestions of their own;
and thus it becomes the source of further new ideas. (Marshall, 1919, p. 271)
