Geography Reference
In-Depth Information
the new geographical economics after Krugman. The positive externalities referred to
in this context developed 'unintentionally' through individual actions. Co-evolution in
the sense discussed in this chapter, however, refers per se to a dynamic cognitive process
of reciprocal inl uence, in which technology and purposeful actions are linked. The
resulting institutions are understood to be consciously aimed for (at least by some) and
deliberately utilised. The analysis of co-evolution and regionalisation therefore calls for
a similar socio-political perspective, as for instance used by Murmann (2003) for the co-
evolution of the dye industry and national institutions.
Thus the construct of regional path dependency currently debated in economic
geography (Martin and Sunley, 2006) may not be a sign of co-evolution if it is seen in
the uni-directional sense of the past inl uencing the present. I would like to expand on
the problems of distinguishing between path dependency and co-evolution using the
example of Frankfurt's growth as a i nancial centre (Grote, 2003, 2004). Although a
satisfying answer cannot be found to the question of whether co-evolution was a factor
in the institutionalisation of the i nancial centre, a glance at it is helpful for our debate.
Following the division of Germany in 1945, Frankfurt gradually replaced Berlin as
the leading i nancial centre and attained a unique position among Germany's i nancial
centres (see Schamp, 1999). Today, Frankfurt as a i nancial centre is subject to European
competition. Grote has identii ed dif erent phases in the specii c agglomeration advan-
tages for information processing in the i nancial centre that make the location attractive
to German and foreign banks. They grow and decline, often as a result of technical
innovations and regulatory changes at a national or international level. In this way
he identii es a long-term path dependency in the emergence of the i nancial centre as a
whole, while also demonstrating the changes in the reinforcing mechanisms in the dif er-
ent phases; that is parts of the development path. In brief, for such a complicated object
as a (local) i nancial centre, 'path dependency' and 'co-evolution' are not synonymous.
Rather, it is necessary to examine specii c aspects of the spheres of activity of a i nancial
centre and of the temporal dimension in order to analyse the emergence of a business
segment in the i nancial sector in association with emerging, locally tied rules. In the case
of Frankfurt this could be the specii c business segment of mergers and acquisitions of
and for German i rms (Lo, 2003).
Lo examined dif erent forms of a mechanism very familiar in current institutional
economic geography, which are dif erently suited to demonstrate the co-evolution of
a business segment and its own local institutional arrangements. A fairly calculated,
knowledge-based trust obtains between the service providers involved in the mergers
and acquisitions process, a trust that can be immediately reversible in individual cases,
while an identii cation-based, long-term, personal trust is absent. Nevertheless this
short-term, calculating trust has a long-term ef ect on the emergence and persistence
of the mergers and acquisitions sector in Frankfurt. Two conclusions can be drawn:
path dependency and cluster may appear together in space, but not necessarily simul-
taneously in time. Path dependency and cluster should not inevitably be understood as
processes in the co-evolution of cluster-specii c local institutions. It seems to me that
we are far from really understanding co-evolution between technology-based clusters
and regionally based institutions, and I believe that this kind of co-evolution of i rms
(technology) and regionalisation is a special case in geography whose existence must be
specii cally proven.
