Geography Reference
In-Depth Information
(2005) recently identii ed i ve separate processes that produce the same outcome (i.e.
they contribute to making people in a local area behave in a certain - uniform or at least
similar - way). In addition to the classic neighborhood ef ect based on local social inter-
action, there may be process of emulation, environmental observation, environmental
selection and local pressure, respectively (see Malmberg and Maskell, 2006).
All in all, there seems to be reasonable support for the claim that spatial proxim-
ity does make possible certain types of interactive learning. A division of processes of
localized learning into the vertical, the horizontal, and the social realm is a useful way
to identify in more detail how they come about, and they all point in the direction of
supporting the notion of myopia in processes of knowledge search. Vicarious localized
learning processes allegedly lead to spatial myopia in the sense that they contribute to
direct search processes into local, isomorphic paths (Levitt and March, 1988).
In section 4 we return to the issue of whether certain types of local milieu, notably
clusters, have characteristics that may, at least in part, help compensate for the negative
aspects of myopia and perhaps even turn them into advantages instead. But before doing
so, we direct our attention to the macro-level phenomena of institutions and institutional
change, and how they contribute to path-dependent development at the aggregate level
of cities, regions and nations.
3. Higher-order processes af ecting knowledge creation: the role of institutional settings
Institutions create incentives and guidelines for action (Scott, 2003). They can be con-
ceived of as resilient humanly devised constraints that structure interaction in society
(North, 1994). These constraints may be regulative (e.g. formal rules, laws, constitu-
tions), normative (e.g. norms of behavior, conventions, self-imposed codes of conduct),
or cultural-cognitive (e.g. creating interpretive frameworks by which meaning is estab-
lished and shaped). It is commonly recognized that institutions do not come into exist-
ence once and for all. On the contrary they undergo continual modii cations to adjust to
the circumstances of time and place, so that the restraints imposed on individual action
change over time.
Institutions can be thought of at dif erent levels of aggregation. At the most aggre-
gate level, the common set of market economy institutions provides individuals with
incentives to experiment with 'new combinations' (Schumpeter, 1934, p. 66) of existing
knowledge, while occasionally adding a novel idea or two. In other words: they jointly
create an encouraging environment for the whole evolutionary sequence of innovation,
selection and retention.
The perhaps most signii cant consequence of market economy institutions is the
way they allow for divergent interpretations of potentially successful behavior and the
continued coexistence of dissimilar approaches at the micro level (Marshall, 1890).
The resulting variation in individual responses to shared challenges and opportunities in
the environments provides material for the subsequent process of selection and interac-
tive knowledge creation.
At the less aggregate level of nations, regions or cities, variation may appear in the
general institutions of the experimenting market economy. Initially random and insig-
nii cant territorial nuances in institutional repertoires deepen over time in response to
the requirements of existing economic coni gurations. They thereby, in turn, create a
particularly favorable environment for attracting newcomers engaged in precisely those
