Geography Reference
In-Depth Information
systemic integration, which refers to the evolving functions in the
cluster or region as a whole, driven by inter-organizational capabili-
ties, networks, institutional learning, and the overall system's degree
of openness.
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The dynamics of the process of the accumulation of capabilities at both
firm and system level are critical determinants of the vertical structure
of firms and industries. Moreover, they also have a major influence on
spatial structures. In history-friendly simulation models (Malerba et al.
2006), the degree of vertical integration or disintegration of firms in a
specific industry depends on the actual distribution of capabilities across
firms in that industry and in the upstream and downstream industries. In
addition, the degree of heterogeneity and the distribution of capabilities
are also affected by market structures and selection. As such, the pres-
ence of MNEs with wide-ranging capabilities which are superior to those
available on the local market will spur processes of either specialization
or vertical integration in backward- and forward-linked industries located
within the region, with major effects on the spatial patterns of industries.
In turn, the level of capability accumulation on the part of the cluster's
firms is influenced by the degree of vertical integration, because special-
ized firms accumulate knowledge and capabilities differently from verti-
cally integrated firms (Malerba et al. 2006).
The variety of firm-level capabilities, technological regimes and systemic
integration account for the observed variety of spatial configurations and
the different sources of innovation in each particular cluster/region. This
is the case, even allowing for the fact that the innovation processes will
change over time, following changes in each of the three factors. However,
whilst capabilities at the firm and system levels can be considered to be
largely endogenous to the cluster or region, the features of the technologi-
cal regime are largely exogenous to the cluster or region. This fact is what
justifies our choice to introduce them as the critical dimension for expand-
ing the transactions costs cluster taxonomy presented above.
As broad examples of such industry-geography interdependencies, tradi-
tional sectoral systems with highly scattered (cross-country) spatial concen-
trations will often be connected to technological regimes with low degrees
of opportunities. Meanwhile, capital goods and machinery systems with
strong sub-national agglomerations and localized knowledge bases will
usually be allied with technological regimes offering medium to high oppor-
tunities. At the same time, advanced sectoral systems such as microelectron-
ics, biotechnology and software, exhibit technological regimes characterized
by new and fast-growing opportunities. These sectoral regimes will usually
be associated with high spatial concentrations of activity, both within and
