Mark Lorenzen

The Cluster as Market Organisation

This paper views clusters as a specific spatial configuration of the economy suitable for the creation, transfer and usage of knowledge. It investigates how the modern exchange-economy becomes organised as rent-seeking firms build network relations to create knowledge and obtain resource efficiency while keeping transaction costs at bay. It moves on to consider the cluster as an emerging, self-organising, attractive alternative for interfirm relationships in cases where (global) network formation becomes a less feasible strategy. The paper empirically investigates two industries where clustering for different reasons might be considered superior to other forms of market organisation.

Centrality and Creativity: Does Richard Florida’s Creative Class Offer New Insights into Urban Hierarchy?

Abstract To provide new insights into urban hierarchy, this article brings together one of economic geography’s oldest and most well-established notions with one of its newest and most disputed notions: Christäller’s centrality and Florida’s creative class. Using a novel original database, the article compares the distribution of the general population and the creative class across 444 city regions in 8 European countries. It finds that the two groups are both distributed according to the rank-size rule, but exhibit different distinct phases with different slopes. The article argues that the two distributions are different because market thresholds for creative services and jobs are lower than thresholds for less specialized services and jobs. The article hence concludes that centrality exerts a strong influence upon urban hierarchies of creativity and that the study of creative urban city hierarchies yields new insights into the problem of centrality.

Ties, Trust, and Trade: Elements of a Theory of Coordination in Industrial Clusters

Abstract Industrial clusters are associated with positive economies of networking only because the benefits of specialization and trade among clustered firms are not offset by coordination costs. This article, drawing upon a diversity of theoretical sources, elaborates on this insight, explaining why coordination is particularly efficient in industrial clusters compared to other trade contexts. It argues that in clusters, firms are able to lower coordination costs of networking by means of social trust, while firms outside clusters have to rely on more costly coordination mechanisms. It defines and discusses trust and its origin, defines and discusses coordination and coordination problems, and explains the dominance of social trust within clusters through focusing upon information costs and social ties.

Emerging themes in economic geography: outcomes of the Economic Geography 2010 Workshop

Background Economic Geography sponsored a workshop to brainstorm collectively the emerging research themes in economic geography. We gathered a small group of midcareer scholars from 19 institutions in 7 countries on April 12–13, 2010, in Washington, D.C., to address what we considered a collective concern: that our discipline could use a significant boost in theoretical and thematic developments at this particular juncture. The workshop was intended to be one of the journal’s many contributions to disciplinary activities and ongoing efforts to keep the discipline vibrant for the next generation.The workshop aimed to achieve multiple goals. First, this was an attempt to develop a sense of collective responsibility for the discipline’s future. Economic geography is no longer monological and singularly centered, as Peck and Olds (2007) observed in their assessment of the Summer Institute of Economic Geography. Indeed, prior to the workshop, quite a few participants reported that they did not have a particular identity affiliation to the discipline but instead enjoyed multiple disciplinary affiliations through joint appointments or appointments in multidisciplinary departments. The increasingly specialized and fragmented nature of the discipline and the resulting “disappearing of the middle” translate into fewer scholars who are dedicated to the discipline, which, in turn, endangers the survival of the discipline. As Johnston (2002, 425) stated, “eternal vigilance is necessary to survival” of a discipline, and mobilization, as in the language of Latour, is a first step in disciplinary change (Johnston 2006).Thus, as editors with a disciplinary name that crowns the journal, we thought that the time was ripe for a deliberate intellectual mobilization.ecge_1114 111..126

The cluster as a nexus of knowledge creation

Today, the study of regions is central to academic analysis and policy deliberation on how to respond to the rise of the knowledge economy. Regional Economies as Knowledge Laboratories illustrates how newer types of regional analysis – utilising scientometrics, knowledge services measures and university networks, and concepts such as knowledge life cycles, experimental knowledge creation, and knowledge ethics – are leading to a perception that regional economies increasingly resemble knowledge laboratories.

Introduction: Knowledge and Geography

Geography is currently penetrating economics. New and technically advanced versions of growth and trade economics are under development (e.g. Romer, 1990; Krugman, 1991; Fujita et al., 1999), while empirical studies of industries and innovation are increasingly undertaken as studies of geographical systems of different varieties, such as clusters, national or regional innovation systems (e.g. Lundvall, 1992; Nelson, 1996; Edquist, 1997; Klepper, 2002; Malerba, 2004). What has happened so far on the theory side is mainly the application of economic method to geographical issues. It seems that, being a mainly empirical discipline, economic geography has not yet had much to offer economics, other than the handing over of its main concern—the geographical location of economic activity—to be treated by economists. The coming together of economics and geography, however, has more potential than simply using economic method on stylized geographical issues. What has been a weakness of geography as far as theory building is concerned, namely, its preoccupation with empirical, often qualitative, studies, has also supplied the discipline a noteworthy empirical insight into meso-level patterns of economic activity. For decades, economic geographers have studied real-life clusters and regional specialization and growth patterns—in fact, taking over the empirical study of these phenomena after classical economists such as Smith, Marshall and Veblen (a heritage largely disregarded by 20th-century economists). Geographers can now offer economists empirical insights into the organization of economic activity—including the influence of the institutions and mechanisms that society and business firms apply in order to change the geographical distribution of economic activity.

Towards an Understanding of Cognitive Coordination: Theoretical Developments and Empirical Illustrations

The cognitive dimension of institutions has been comparatively neglected in social science research. In particular, economists have concentrated on how institutions provide incentives. However, institutions also influence behaviours by influencing beliefs and expectations that help agents to overcome coordination problems. We explore various aspects of how institutions may align agents’ beliefs, concentrating on the role of analogies in interactive decision making, and how analogies grow from experience. We illustrate our reasoning by an empirical example.

Industry and Innovation: Continuity and Change

After being diligently edited by John Mathews of Macquarie Graduate School of Management in Sydney for more than a decade, the editorial responsibilities of Industry and Innovation have now been handed over to a core group of scholars within DRUID (The Danish Research Unit for Industrial Dynamics). Initially under the leadership of Bengt-Åke Lundvall, and now under the direction of Peter Maskell, DRUID is presently, at the time of its tenth anniversary, a leading international research community, with two major annual conferences and a working paper series with close to 150 articles and over 90,000 downloads. Drawing upon this community, Industry and Innovation’s new editorial team, consisting of Jens Frøslev Christensen, Ina Drejer, Henrik Sornn-Friese, and the new Executive Editor, Mark Lorenzen, is happy to be able to collaborate with the Founding Editor, John Mathews, in consolidating the journal’s unique position as a truly international (meaning American, European, and Asian) high-quality journal, treating organizational and institutional aspects of industrial dynamics.

Internationalization vs. Globalization of the Film Industry

We know an impressive lot about the film industry. Not only have media scholars and anthropologists probed into films, filmmaking and filmmakers for at least a century, economists, sociologists, geographers and management scholars have also taken to study this, the biggest of the commercial cultural industries, with gusto. Highly simplified, the latter literatures have made two main observations about the industrial and institutional dynamics of the film industry. The first observation is that because feature films have high development costs, they also have a relatively large minimum market size for making a profit (Caves, 2000; Vogel, 1998; Wasko, 2003; Eliashberg et al., 2006). For example, the small home markets for European films mean that even when producers here hold production budgets down by opting for low production values, the production of most films hinges upon state subsidies (Moran, 1996; de Turegano, 2006). The countries that have become specialized in film production, for instance, those with a high annual number of non-subsidized feature film releases, are countries with vast home audiences, such as India (1,041 film releases in 2005), USA (599 releases in 2006), Japan (417 in 2006) and China (330 in 2006) (figures from European Audiovisual Observatory, 2007). Of course, what matters for such specialization is not merely the size of a home consumer base, but also its purchase power. During the first half of the last century, Hollywood became the world’s largest producer of films on the basis of an increasingly wealthy US population that at the time depended mostly on cinema for mass entertainment. Consumer preferences also matter: in the latter half of the century, India, where the audience remains hugely attached to cinema going, overtook the USA as the world’s largest film producer, even if India’s population is

Space and Inter-organizational Relations

Conditioned by costs, organizational structures and institutions, innovation is unevenly distributed across space. Extant research has treated the spatial aspect of innovation in various ways, from...