Geography Reference
In-Depth Information
high entry and exit costs, and the rationale for spatial clustering in these
types of industries is that proximity is required primarily in order to mini-
mize inter-firm transport transactions costs. Rental appreciation is not a
feature of the cluster, because the land which has already been purchased
by the firms is not for sale. The notion of space in the industrial complex
is local and regional, but not necessarily urban, in that these types of com-
plexes can exist either within or outside of an individual city. This complex
model is actually the single explicitly spatial element in the transactions
costs approach of Williamson (1979), where the focus is on the types of
flow-process scale economies which firms can realize by being part of
vertically-integrated production complexes.
The third type of spatial industrial cluster is the social network model.
This is associated primarily with the work of Granovetter (1973), and
is a response to the hierarchy model of Williamson (1975). The social
network model argues that mutual trust relations between key decision
making agents in different organizations may be at least as important
as decision-making hierarchies within individual organizations. These
trust relations will be manifested by a variety of features, such as joint
lobbying, joint ventures, informal alliances, and reciprocal arrangements
regarding trading relationships. However, the key feature of such trust
relations is an absence of opportunism, in that individual firms will not
fear reprisals after any reorganization of inter-firm relations. Inter-firm
cooperative relations may therefore differ significantly from the organi-
zational boundaries associated with individual firms, and these relations
may be continually reconstituted. All of these behavioural features rely
on a common culture of mutual trust, the development of which depends
largely on a shared history and experience of the decision-making agents.
This social network model is essentially aspatial, but from the point of
view of geography, it can be argued that spatial proximity will tend to
foster such trust relations, thereby leading to a local business environment
of confidence, risk-taking and cooperation. Spatial proximity is necessary
but not sufficient to acquire access to the network. As such, membership
of the network is only partially open, in that local rental payments will
not guarantee access, although they will improve the chances of access.
The geographical manifestation of the social network is the so-called
'new industrial areas' model (Scott 1988), which has been used to describe
the characteristics and performance of areas such as Silicon Valley and
the Emilia-Romagna region of Italy (Piore and Sabel 1984; Scott 1988;
Storper 1997; Castells and Hall 1995). In this model space is once again
local or regional, but not necessarily urban.
In reality, all spatial configurations will contain characteristics of one
or more of these ideal types, although one type will tend to be dominant
