Putting Clusters in their Place

Chapter 11 Putting Clusters in their Place Nick Henry, Jane Pollard and Paul Benneworth This is the pre-publication version of the following chapter: Henry, N., Pollard, J., & Benneworth, P. S. (2006) “Putting clusters in their place” in Asheim, B., Cooke, P. & Martin, R. (eds) Clusters and regional development: critical reflections and explorations, London: Routledge https://scholar.google.nl/scholar?cluster=2040643544497679689&hl=nl&as_sdt =0,5&as_vis=1

1

______________________________ Introduction A central concern of this edited collection is to put forward a theoreticallyinformed assessment of the cluster notion - its strengths, attractions, weaknesses and limitations. Furthermore, the collection seeks to apply this assessment across the variety of domains over which the concept has galloped – namely, from driving force within theories of regional innovation, competitiveness and development to multi-scalar empirical construct to the focus of a growing range of policy instruments delivered in the name of regional (cluster) development activity. Within this chapter our aim is similarly to provide an assessment by asking ‘what is the place of clusters?’. We ask this question particularly of the concept’s place within the conceptual armoury of regional development and we attempt to answer it by drawing on a variety of example cases. Our starting point is to respond to the cogent critique of clusters written by Martin and Sunley (2003), and which ends by asking just what is the ‘value added’ by the cluster concept to the range of literature on geographical agglomeration and regional development. We begin by arguing that ‘clusters’ should be understood as a set of multiple perspectives each of which encompasses a conceptual

underpinning

and

methodological

approach.

Multiple

perspectives explain both some of the confusion that surrounds the concept yet, to our minds, also create the potential for value added from theoretical, empirical and policy cross-fertilisation (see, also, Benneworth and Henry, 2004). To support our argument in this section we draw on two exemplars – business services in London and the Dutch ICT cluster. In both cases we outline briefly how a range of analyses grouped under the clusters rubric – yet drawing on different theoretical traditions, techniques and evidence bases

2

– can be usefully combined (if done so carefully) to provide a more confident, holistic and deeper understanding of the particular geography of economic activity. Whilst we use these examples to argue for the potential value added of the cluster concept we do, nevertheless, recognise a number of areas of theoretical development required to bring the concept to full maturity. The second section of the chapter discusses two particular areas of development – namely the role of finance in cluster development and the relationship of clusters to firm (as against regional) performance. As geographies of money and finance emerge as a distinctive arena of research, so it seems apposite to ask what role clusters play, if any, in the provision of firm finance. We use original research on the Jewellery Quarter of Birmingham, UK to suggest some answers. In turn, better access to finance may represent only one of the supposed advantages accrued by firms within clusters but evidence for the relationship between cluster location and the competitive performance of individual member firms remains imprecise. The paper provides a short review of a range of studies that have attempted to unravel this critical relationship and, drawing on the discussion in section one, begins to sketch out what a robust research design for identifying the posited performance differential of clusters might look like within a multiperspectival approach. Finally, that clusters (and the synergies of spatial proximity they represent) matter does not imply that all significant economic activity takes place within some bounded area. Nor does it imply that clusters are the inevitable and dominant form of contemporary economic development. Furthermore, as cluster policy continues to be rolled out across the world, a question that remains implicit all too often is what outcomes and impacts are expected from public policy support. In particular, if clusters are supported generally under the rubric of wealth creation and regional competitiveness, questions rarely asked of clusters are those pertaining to social equity and 3

(ironically) uneven regional development. Using the final example of ‘clusters for the inner city’, a discussion of understandings of economic practice and economic activity provides the backdrop to ask exactly what clusters can, and cannot, be expected to deliver for regional policy makers as the chapter concludes by seeking to put clusters firmly ‘in their place’.

Placing the value of clusters: clusters as a multiperspectival approach to understanding geographies of economic activity In 2003, Martin and Sunley published a powerful review of clusters. Crystallising growing concerns and dissatisfaction, they sought to deconstruct a concept that, for them, has become ‘chaotic’ in its universalistic reification of a diversity of economic processes of localisation. Identifying, amongst other things, theoretical eclecticism, methodological inconsistency and the ‘power of the brand’, ultimately, they questioned the ‘value added’ of cluster theory over and above existing theoretical explanatory strands. In a recent response (Benneworth and Henry, 2004), the authors of this piece agree with much of the argument laid forth by Martin and Sunley but, nevertheless, seek to identify the value added that clusters can bring to the theoretical table. Taking as a starting point that clusters are an (emergent) set of multiple perspectives (and not merely a singular approach propounded by Porter, 1998), we argue that an epistemological position of ‘hermeneutic theorising’ (Barnes, 2001) allows for the potential of theoretical eclecticism to drive forward processes of theoretical, empirical and policy cross-fertilisation. Hermeneutic theorising, as against ‘epistemological theorising’, recognises that no vocabulary is perfect or final in its (re)description of reality and, in turn, that there is no end of possible sources for vocabularies of theorisation (Barnes, 2001). In a context of diverse vocabularies, theorising is a creative and open-ended process of interpretation performed by community

4

members. Critical scrutiny by communities of practice will establish the ‘usefulness’ of any one theoretical competitor but the broader philosophical point to be drawn is that theorising is circular, reflexive, indeterminate and perspectival (Bohman, 1993, p.116, quoted in Barnes, 2001). Knowledge is situated and partial – even if certain vocabularies may hold sway as useful for long periods of time. Indeed, one might argue that the aims and contents of this book reflect a community of practice engaged in just such a process of theory development. And, certainly, many of the chapters highlight, and review, the diversity of theoretical traditions that comprise contemporary debates on clusters from geographical econometric models to normative recipes for generalised economic success (see also Benneworth et al., 2003; Gordon and McCann, 2000; Martin and Sunley, 2003; Newlands, 2003). For us, it is this range of theoretical perspectives that allow for the possibility of theoretical debate and cross-fertilisation. We do not dispute the inconsistencies, difficulties and problems that Martin and Sunley highlight within this eclectic literature on clusters. In particular, lack of a suitable marriage of theory and method within each perspective in use (cf. Massey and Meegan, 1985) ranks highly as just such an inconsistency yet, carefully treated as a portmanteau concept, cluster analyses drawing on different empirical studies and their related theories can make sense if the component ideas are each recognised to evolve along their own internal and logically coherent pathway. Different theoretical perspectives seek different forms of evidence collected through different sets of techniques (McKendrick, 1999; Swann, 2002; Martin and Sunley, 2003), and the vitality of the clusters concept can arise from the intersection of these different perspectives within the concept’s explanatory framework. From our perspective, then, ‘clusters’ are more akin to a series of proximate debates and the clusters approach partly the act of holding 5

together these dissonant threads in conversation. Both combining and disentangling the threads produces the possibility of new academic knowledges and, even, the possibility of a broader analysis in which the total knowledge of the ‘cluster situation’ may be greater that that of the component parts. In (anti) essence, multiple strands need not imply incoherence. Coherence is an emergent outcome of how effectively academics perform the theorisation process and is contingent on theorisation being done satisfactorily and convincingly in the eyes of the community of practice. To exemplify our argument we can, for instance, use the range of work on the London business services cluster (for expansion, see Benneworth and Henry, 2004). Early work on the agglomeration by Allen (1992) and Coe and Townsend (1998) was developed by Gordon and McCann (2000) who used three

disciplinary

views

of

clustering

–

regional

economics,

business/management, and geography/sociology – and their associated methodological tools and requisite evidence bases to reconcile earlier findings on the nature of this agglomeration. Recently, Keeble and Nachum (2002) produced the most comprehensive analysis of the cluster to date through careful operationalisation of an even broader set of theoretically informed explanations of clustering activity in the region. Within their approach, conceptual work drawn from regional science, economics, economic geography, strategic management, economic sociology and science and technology studies (STS) is utilised to develop robust conclusions. The result, to our minds, is a more confident identification of the existence of the cluster, a more holistic and deeper understanding of what is, or is not, driving its existence and, critically, a highly geographical (scaled) model of the spatial extent and constitution of this particular form of regional development (Benneworth and Henry, 2004, p.1018-1019). Similarly, the less well-known case of the ICT-sector in the Netherlands provides an example of how analytical threads drawn from different 6

theoretical perspectives can come together under the rubric of clusters to provide insight in to emergent economic geographies.

The value of the

cluster conceptual framework lies in helping to clarify some of the complexity in the situation, and to indicate that the sector’s economic and territorial development is not easily explained by a single set of factors. Moreover, in this case, once revealed, this complexity and multi-dimensionality is seen to be an integral part of the claims for the economic significance of the cluster. Initially, using a standard quantitative SIC mapping process, Brouwer and Den Hertog (2000) demonstrate that the ICT industry is economically significant for the Dutch economy, in terms of employment, value added and research activities. Den Hertog et al. (2000) have used an input/output analysis to reveal that there are four main sub-sectors in the cluster - electronics, services, traditional media and new media - with strong interactions within those sub-sectors, and between them in the cluster as a whole. Boumans and Bouwman (2000) used an eclectic methodology to explore these four sectors arguing that they have very different but interdependent geographies, and understanding each is necessary to understanding the cluster as a whole. In particular, they distinguish the media cluster in and around Amsterdam and Hilversum from the much more technology-driven cluster around Philips central research laboratories in the south of the country, in Eindhoven. Quah (2001) has argued, in turn, that these local concentrations have very different roles in international ‘clusters’; arguing, in particular, that the Amsterdam cluster is part of what he terms a macro-cluster, a central crescent of activity stretching from London to North Italy. Further, Van Oort (2004) has used a spatial econometric approach to demonstrate that the ICT sub-clusters based around Philips and the universities in the east and south are much more dependent on those large agents driving the clusters than in the Randstad area to the west, where there are strong dissociated knowledge pools derived from diffuse inter-firm networks. 7

Taken in isolation, it would be easy to dismiss the Amsterdam multi-media agglomeration or the Eindhoven electronics concentration as engaging anecdotes. A cluster framework allows these regional geographies to be understood within a more significant ‘regional system’ at the national level, and assists in building a better understanding of the role and nature of the ICT industry in the development of the Dutch economy.

With the

growing complexity of production systems, appreciating and explicating the linkages between places and scales that influence comparative economic success is of growing concern (Henderson et al., 2002) and, arguably, a carefully applied and validated cluster framework aids this explanation (Bathelt et al., 2004; Wolfe and Gertler, 2004). In summary, our two examples above suggest how different knowledges can be brought together to create insight and understanding. Nevertheless, in synthesising appealing cluster stories, we wholeheartedly agree with Martin & Sunley (2003) that there needs to be methodological rigour and consistency. The value added of the clusters approach (drawing on hermeneutic theorising) lies in, first, allowing for and explicitly promoting theoretical conversations and, secondly, the potential this affords for multiple explanations that can interact conceptually to provide a richer understanding of the situation than permitted by theoretically monistic approaches. For us, the portmanteau concept of clusters provides a potential uniting thread to bring multiple perspectives to bear on industrial agglomeration. The inconsistencies and ambiguities of the cluster concept identified by Martin and Sunley (2003), we would suggest, are part of the ‘work in progress’ around this immature, yet politically powerful, concept.

Clusters as work in progress: finance and firm performance

8

Just as Martin and Sunley (2003) identify, for example, a lack of theoretical development of the concept of social capital within Porter’s work so, in the spirit of ‘work in progress’, we wish to highlight two themes for further development within the clusters literature.

Financing Clusters In 1990, Becattini (1990, p.37) outlined an attempt to conceive “a framework for a theory of the industrial district”. His discussion ranged over the values and views of a local community, a population of firms and human resources, markets, the balance of competition and co-operation, technological change, adaptability, class and consciousness and, notably, a local credit system. The credit system was described as “crucial” (p. 47) in facilitating continuous development, most especially in the context of districts dominated by large numbers of small firms. Yet the financial systems element of Becattini’s formulation has been largely ignored in subsequent literatures dissecting the organisational, technological and knowledge architectures of agglomerated production complexes.1 Moreover, this neglect continues in spite of many of the insights from economic sociology that have made their way into economicgeographical research on agglomerated production systems, particularly the concern with the social and cultural embeddedness of economic behaviours and institutions. Although access to finance, and especially venture capital finance, is acknowledged as an important element in industrial development (see Florida and Kenney 1988; Malecki 1997; Gompers and Lerner 1999), there have been very few explorations of the spatiality of firms assets and liabilities and, more broadly, the geographic anatomy of financial infrastructure, institutions, knowledges, regulations and practices that constitute their

1

This section draws on arguments developed in Pollard (2003; forthcoming).

9

financial reproduction (see Zook 2004).

With few exceptions, 2 questions

concerning how and where firms obtain and use external finance, how firms’ capital structures are managed, and how individual entrepreneurs, firms and institutions reach decisions about financing are largely the domain of economists and finance theorists in business schools. Here, we wish to argue that it is important to consider whether debates about the significance of spatial proximity are relevant to the production and reproduction of firms’ financial networks. Firms are embedded in national and regionally varying constellations of financial infrastructures, regulations and practices and their assets, customers and suppliers are also grounded in real space-time. It is also important to investigate the social and cultural dynamics of firms’ financial networks and how they are shaped by gender, class and religious adherence (to name just three axes of differentiation); not simply to counter the under-socialised accounts of agency that predominate in economics and finance literatures, but also to acknowledge that entrepreneurs understand and navigate their relationships with money and financial institutions in different ways that can have profound material effects on the running of their businesses (Pollard, forthcoming). In turn, while clusters have become an important unit of analysis in regional economic theorizing, little is known about their financial architectures and whether there is a relationship between financial infrastructure and cluster development and performance. Just as innovation, learning, problem solving and other facets of economic co-ordination are now understood as geographically rooted, socially constructed achievements, there is a pressing need to examine a firm’s (and cluster’s) financial reproduction. The relative neglect of the role of finance in clusters arguably stems from geographers’ (and others’) use of bodies of theory that downplay the significance of the circulation of money and credit in understandings of firm 2

Feakins (2001) work on commercial bank lending to SMEs in Poland is one such exception.

10

behaviour and production systems.

Neoclassical theory, for example,

conceives money in neutral terms and describes an economy in which there is perfect competition in financial markets.

In addition to the standard

neoclassical precepts about utility maximisation and the frictionless, costless flow of information, it is assumed that information is symmetric between borrowers and lenders, that there is perfect mobility of investment capital (moving to highest rates of return) and non-existent or insignificant geographic differentials in costs of capital (see Gertler 1984).

If these

assumptions are accepted and capital can flow freely to the highest rate of return to facilitate adjustment to equilibrium, then financial flows are of minor importance in regional growth. Indeed, Modigliani and Miller’s (1958) influential work on the capital structure of firms argued that, under these neoclassical conditions, the financial structure of a firm is essentially irrelevant because internal and external funds should be substitutable and a firm’s choice of equity or debt finance should have no bearing on its market value or profitability. Neoclassical theory is not alone in holding to theoretical commitments that detract attention from examining the finance-production nexus. Economic-geographical research since the 1970s has been heavily influenced by Marxian political economy that placed production, and not circulation or consumption, at the heart of economic geography. Marx followed the Physiocrats and Adam Smith in arguing that production, and not exchange and money handling, was the source of wealth creation. This stance slowed engagement with issues of circulation (and also consumption, see Miller 1995) and generated debate amongst radical political economists about the significance of money and credit (Dymski 1990). This is not to say, however, that political economic approaches have had nothing to say about money and finance in geography. David Harvey (1973; 1982), for example, has long

11

encouraged geographers and others to use Marxian categories to examine how the financial system orchestrates flows of credit to (re)produce exploitation, inequality and uneven development (Harvey and Chaterjee 1973; Harloe and Lebas 1981; Dymski and Veitch 1992; Squires 1992; Leyshon and Thrift 1995); although there has been a clearly discernible trait to concentrate on ‘the big picture’ of the global financial order (Leyshon 2000). 3 It is now widely accepted that financial systems have a role to play in economic development, and that there exist significant national differences in financial systems, and their regulation, (Thompson 1977; Zysman 1983); differences that generate non-trivial variations in how, and on what terms, capital is channeled into industries. Rather less evident, however, has been interrogation of the microfoundations of financial markets, behaviours and practices and, most especially, issues of allocation and distribution (Sayer 1995; Storper 2001). For clusters, the under-researched question remains do different geographical configurations of financial institutions affect the supply and price of credit available for firms? Further, is firm behaviour affected by the nature, source and terms of their finance? There is a body of research, rooted in new-Keynesian (and later) readings of financial markets, that works from the premise that markets, as social institutions, always involve informational differences between buyers and sellers and that such asymmetries are especially acute in credit markets where borrowers know more about their collateral and industriousness than potential lenders (Leland and Pyle 1977). These literatures - developed and applied predominantly in economics, insurance and finance literatures - have

3

Similarly, there are now well- rehearsed debates about the significance of regional financial networks in an era of ongoing integration of financial markets, agents and regulation. Although ‘the region’ was an important financial unit in the UK in the 19th century, when banks were closely tethered to regional industrial structures, its contemporary significance is much less clear (see Pratt 1998; Klagge and Martin, 2004).

12

generated a series of important contributions, explaining the rationing of credit, small firms’ tendency to rely on bank debt as opposed to other forms of finance, the role of financial intermediaries in ameliorating information uncertainties through screening and monitoring, and the costs involved in operating in markets in which informational asymmetries, uncertainty and opportunism are pervasive (Spence 1974; Leland and Pyle 1977). Together with emergent work by geographers that interrogates the social-cultural shaping of financial markets, knowledges and institutions (O'Neill 2001; Pollard 2003; Tickell 2003), a clear agenda has opened up for further research into the role of clusters within the financial infrastructure of firm finance. For example, Russo and Rossi (2001), in a study of 1,700 small and medium firms between 1989 and 1995, found that for some time firms located in industrial districts in Central and Northern regions of Italy enjoyed lower interest rates and greater access to bank loans than their counterparts outside industrial districts. Theoretically, the few studies available might explain this outcome through agglomeration facilitating fewer information asymmetries for contract making, a smoother relationship between the supply and demand for finance through shared understanding (‘industry is in the air’ including for financial intermediaries), or reduced opportunistic behaviour due to peer networks (Becattini 1990; Dow, 1990; Stiglitz, 1994; Carnevali 1996; Alessandrini and Zazzaro 1999; Li et al. 2001; Russo and Rossi 2001). A further avenue for research concerns the significance (or not) of clusters as financial spaces, as understood by entrepreneurs. One of the hallmarks of much contemporary economic geographical research is an insistence on the social nature of the economic (Thrift and Olds 1996), that economic contracts are understood and framed in a non-contractual background (Hodgson 1988), and that the accumulation of knowledge and rules and norms are fundamental in shaping expectations, beliefs and decision making in conditions of uncertainty (Storper and Salais 1997). In a 13

recent study of designer maker jewellers in Birmingham’s Jewellery Quarter in the UK (Pollard forthcoming), designer makers described the Quarter as an important financial space, home not only to most of their banking transactions and suppliers of credit but also to their peer networks providing intelligence on banks, other financial professionals and sources of funding.

Designer

makers rely on financial relationships with other designer makers, suppliers, financial institutions and intermediaries in the Quarter that are not automatic or ‘natural’, but have to be produced/reproduced through repeated contact (face to face and sometimes telephone) and occasionally a referral from another designer maker. These relationships are crucial for these businesses because the provision of trade credit, and the ability to negotiate changes in payment terms, allow designer makers to ameliorate the financial uncertainties of co-ordinating turnover times in what is, overall, a relatively low wage, cash poor environment. In sum, ‘supporting institutions’ are a commonly attributed advantage of agglomeration and clusters yet whilst there now exists compelling evidence on the relationship between financial infrastructures and the nature and characteristics of production systems, the relationship between financial institutions, clusters and the firm remains both under-theorised and rarely investigated.

Clusters and Firm Performance In similar vein, work is still required in building the bridge between micro-scale clustering processes and demonstrating that those cluster processes have positive effects on particular firms’ productivity and competitiveness. Notwithstanding definitional issues concerning how a firm ‘participates’ in a cluster (cf. Gordon and McCann, 2000), this issue arises from how macro-scale cluster analyses have been justified. Lublinski (2003) notes that “so far, empirical work on clustering has either been descriptive 14

case studies or econometric studies that measured either the effect of a specific agglomeration advantage or the aggregated affect of all possible centripetal forces” (p. 454). A range of extensive analyses exist that make claims for a relationship between clustering and economic performance. Porter (1990, 2003), for example, has analysed regional performance and found that where ‘clusters’, broadly defined as specialisation/ concentration of activities, are present then those regional economies tend to perform well. Established, deep and internationally competitive clusters are argued to boost regional wages and rates of innovation. Similarly, DATAR-OECD, 2001 (quoted in Martin and Sunley, 2003) suggests greater profitability from location within clusters. In contrast, Smith et al. (2002) argue against the importance of urbanisation cluster effects for Danish companies on the basis that central location does not increase R&D activity or intensity. Chevassus-Lozza & Galliano (2003) have noted that knowledge spill-overs are associated with improved export performance in the French food industry, but note that knowledge spill-over effects are different for different sizes of firm. Van Ark et al (2003) note that productivity has grown fastest in those Dutch service sectors that are dominated by client-led approaches to innovation where proximity to clients is key, but sparse data leaves them unable to draw firm conclusions from their tantalising observations. Relatedly, Dumais et al. (1997) argue that labour mix is the main factor explaining industrial growth and decline, rather than Marshallian spill-overs from customers, suppliers and knowledge partners. They conclude, however, by observing “this effect could potentially be occurring because industries with similar labour mixes share ideas as well as workers” (p. 31) so, in effect, bringing possible cluster benefits back in to the equation. On the whole, however, these analyses remain some distance from spatially nuanced and empirically verified evidence that participation in a 15

cluster produces a particular set of competitive advantage outcomes for (a set of) firms which, in turn, drives a broader process of territorial economic success. As Lublinksi (2003) states, approaches fail “to explicitly measure the relative importance of the various agglomerative forces” (p. 454) and, in particular, he critiques the majority of work for focussing on locational factors in preference to measuring the impacts of cluster location on firms. Baptista and Swann (1998) did attempt to measure whether firms in clusters did innovate more, and found some supporting evidence for this thesis, but the issue of the causal relationship between clusters and innovation performance remains (especially as their method of cluster identification has been disputed, see Martin and Sunley, 2003). Those approaches that begin from particular clusters themselves have also struggled to deliver a fully convincing case for the existence of demonstrable territorial benefits through participating in ‘clustering’ (Benneworth et al., 2003). A number of cluster studies have argued that clusters and clustering processes have helped particular sets of firms to overcome certain technological problems they have faced. In her work on a local medical/ ICT cluster in the East of the Netherlands, for example, Klein Woolthuis (1999) revealed how co-operation and trust built up through common working, and that trust was directly a factor in the development of new products by cluster companies. Similarly, Lorenz (1999) has shown that the build up of trust through an ongoing learning process was a key part of the successful adjustment of the Lyons machine tools industry in the late 1980s. The issue remains, however, how these findings compare with other similar firms (and the sector) outside of the cluster. Indeed, of particular scarcity are analyses which begin from an assumed cluster, and compare tangible economic aggregates of cluster firms, such as exports, profits or employment growth, with the same industry elsewhere (Ketels, 2003). Lublinksi (2003), for example, is not able to establish 16

that clusters have definite benefits but, instead, is held to the rather less ambitious claim that in the north west German aerospace cluster, proximity was more important to firms in the cluster than in a control group of aerospace firms. Overall, however, the continued difficulty (even failure) to link competitive performance benefits with active participation in the cluster by a firm, or firms, represents a significant fissure in the theoretical contentions of cluster advocates. A positive sign is a growing, but still scattered, body of evidence that attempts to rectify this omission (Ketels, 2003). Swann (2002), for example, uses the EU community innovation survey to link co-operation in R&D by firms

with

improved

innovation

performance,

cost

reduction

and

profitability; however, they are not directly concerned with the spatial location of the collaboration. In 2002, Broersma applied an innovative methodology for exploring induced innovation effects in clusters, using input/output structures to gauge interaction between sectors and then gauging the flow of innovation based on known levels of R&D in each sector. This concluded that clusters did indeed have higher flows of knowledge between them when this was measured through this imputed I/O analysis. Theoretically, recent work drawing on a knowledge-based view of the firm (Pinch et al., 2003; Tallman et al., 2004) has theorised a set of propositions as to how knowledge flows within clusters can lead to differential firm performance (‘competitive advantage’) across the organisational constructs of industry, cluster and firm but these remain to be empirically tested. Yet, overall, the challenge remains to move away from ‘cluster truisms’ on economic performance and to fully theorise and empirically test cluster processes

and

their

relationship

to

innovation,

productivity

and

competitiveness within the firm (as well as, and in contrast to, groups of spatially proximate firms or sectors). Indeed, drawing on the above short review, and our earlier discussion on multiple analyses of the Dutch ICT 17

sector, one can begin to tease out that a robust, and multi-stranded, cluster methodology might comprise4:



initial identification of agglomerations using location quotients and input-output analysis to provide possible candidate clusters in any particular industry.

More sophisticated technical variants may be applied in this analysis and, for example, might include ‘aggregation’ of certain industrial classifications. If I/O relationships provide one justifiable rationale for aggregation, others might exist such as expert knowledges of emergent production systems (e.g. biotechnology) or systems ‘hidden’ within official classifications (e.g. UK motorsport industry).



investigation of a broader range of ‘connectivities or clustering processes’ (labour markets, knowledge systems, institutions, sociocultural characteristics, and so forth) that suggest a shift in categorisation beyond agglomeration to cluster



dependent on the research question but, in this case, asking the question ‘do firms perform better inside a cluster than outside’ the selection of matched respondent firms both inside and outside the cluster and collection of data on their comparative performance



the testing

of propositions for, or evidence

of, explanatory

relationships for differential performance between cluster and noncluster firms Whilst recognising that the above is necessarily schematic as only one small part of the chapter, we can suggest that the analytical design may be ordered differently according to research questions (or even policy drivers) 4

Our thanks to Phil Cooke for urging us to at least begin to put a sketch design on paper.

18

but that multiple methodologies reflecting a range of approaches can be combined to create more robust identification and deeper understanding of clusters.

Placing clusters in regional development So far in this chapter we have suggested that there is still significant work to be done on the clusters concept but, nevertheless, we believe the approach offers value added in understanding the agglomerative activity evident across the contemporary space economy. Although we have raised concerns about the comprehensiveness of evidence, and theoretical maturity of, the concept of clusters, there is little doubt that there are a range of worldwide ‘paradigmatic’ examples of regional agglomeration that have had a major impact upon models (and policies) of regional economic development. In particular, and to quote Martin and Sunley (2003, p.6), ‘Clusters, it seems, have become a world-wide fad, a sort of academic and policy fashion item’. Arguably an emblematic example of Thrift’s (2005) ‘soft capitalism’, in which key global institutions and elites rapidly create and live stories of the economy5, the fad of the cluster concept is losing some of its steam. In turn, and partly contributing to the slow down, a process of reflection, analysis and review of the concept is underway, almost reclaiming the idea from the policy domain as part of continued theoretical work on agglomeration in economic development. Whilst earlier sections of the chapter have to some extent mirrored this wider process – asking what is new and different, and what work is still required – it is only now that a more fundamental questioning of the ‘point of clusters’ can begin to be discerned. Highlighting possibly the most powerful aspect of the concept, what has remained an almost constant silence (or given) is exactly what type of regional development outcomes

5

See Lagendijk and Cornford (2000) for an early attempt to track the story of clusters

19

clusters are expected to deliver and the relationship of these outcomes (for example, greater regional competitiveness) to a broader set of regional development objectives such as greater general well-being, quality of life, and sustainable development. In this final section of the chapter we wish to ask exactly what form of growth, with what type of economic and social outcomes, can be expected from cluster development activity as a policy instrument. What are the broader regional development objectives of clusters? What has their dominance of regional development policy implied for other developmental avenues for local and regional economies? In asking these questions, our aim is to ‘place clusters’ within the realms of economic activity and policy development and, in particular, to argue for a diverse landscape of economies of which clusters are merely a part. By doing so, we wish to suggest that as one reading of a particular set of economic relations within the broader economy, clusters should sit alongside a range of approaches to regional development. In this sense, we wish to put clusters firmly ‘in their place’.

Clusters as a tool of regional development Fundamentally, clusters have been applied within a framework of the drive to greater regional competitiveness and competitive advantage (Porter, 1990; 1998). Putting aside the issues raised earlier of the current evidence base for this expectation, the question we wish to ask is, if successful, what would the outcomes for a regional economy driven by clusters look like? As Martin and Sunley (2003) put it, the impact of cluster growth on other aspects of the regional economy and regional development remain ‘unresolved’ (p.27). Within a successful cluster, one might expect rising productivity and profits

within

member

companies.

In

turn,

increased

employment

opportunities, rising local wages and higher rates of new firm formation might ensue around the core of the cluster. Yet a number of dimensions can 20

be played out around the economic and social outcomes of this growth. First, the nature of the development dynamic within clusters can drive – theoretically - equal or unequal distributional effects (across income and other social axes of differentiation). Previous work on high technology Cambridge, for example, has outlined the gender inequalities endemic to the growth of this production complex (Henry and Massey, 1995; Massey, 1995; see, also, Allen et al, 1998 on the regionalised growth of the 1980s South East of England). Moreover, growth can trigger ‘spillover’ effects such as tightened labour markets and pressures on housing stock and other regional services (for example, water and transport). This is only likely to increase the pressure on non-core (and/or less skilled and less productive activities) to the point that they might go out of business or move away6. In effect, then, this is merely to exemplify how Sassen’s (1994) arguments for the ‘two sides to growth’ associated with the particular agglomerative growth of global cities could be similarly applied within the realm of clusters. In a rare piece on the distributional effects of clusters, Rosenfeld (2003) asks the question as to what impact this particular form of development policy has on low and middle income people, economically distressed urban and rural places and small enterprises. He does so to pinpoint the reasons why certain people, places and firms are ‘excluded’ through the process of cluster development and in an attempt to identify routes to inclusion which might draw on cluster activity including how:

‘…examination of systemic relationships may reveal previously unnoticed common or collective competencies, hidden specialized resources, and ways to aggregate strengths that have the potential to take advantage of cluster tools, social capital, and externalities.’ (Rosenfeld, 2003, p.376)

6

As Martin and Sunley (2003, p.27) point out, whilst Porter (1998) views this as the ‘correct’ outcome of cluster development it could lead, in aggregate, to negative outcomes within the regional labour market.

21

On the one hand this attempt to engage with, and bend, the model of growth implicit within cluster policy is very welcome; on the other hand it highlights, as Rosenfeld himself suggests, that whilst clusters may be a single development tool more often than not they are interpreted as the framework for understanding and building regional economies. Thus, cluster policy has been applied to revive old industrial regions, stimulate new high-tech and or knowledge-based agglomerations and, probably most disconcertingly, proposed as the solution to the longstanding problems of the inner city (Porter, 1995). In 1995, Porter argued how cluster policy could find, and/or deliver competitive advantage to the inner city as a solution to these areas’ ingrained and longstanding economic problems. Whilst he has argued against any attempts to build clusters from scratch, through his ICIC consultancy (Initiative for a Competitive Inner City) he has sought to apply a demand-led and market-based solution to areas in which continued market failure has, arguably, been the root cause of their very definition. On a trip to the USA, ‘clusters for the inner city’ caught the eye of the UK Chancellor Gordon Brown as part of his broader aim to spread enterprise across all areas and communities of the UK. Under what was labelled as the City Growth Strategies programme, in 2003, a total of 7 pilot areas were chosen in the UK to implement cluster policy within the inner city under the tutelage of ICIC. Whilst the evaluation report of the pilots argued that it was too early to be able to evaluate the outcomes of the scheme (GHK, 2004a)7, the report also pointed out that no one model of cluster policy could be discerned across the pilots and the lack of any independent evaluation for the effectiveness of the clusters in the inner city initiative within its USA homeland. Nevertheless, a

7

Positive process outcomes such as business engagement with strategic economic development were identified

22

further dozen or so areas have been chosen for City Growth Strategies in the UK. Yet whilst evidence may yet materialise for the effectiveness of the policy, ‘clusters for the inner city’ may also precisely reflect the overextension of a development tool originally applied at a national level to that of a framework for understanding and building an economy irrespective of its scale and historical trajectory. For example, at the time of City Growth Strategies in the UK, the UK government was undertaking a national programme of support to Community Development Finance Institutions (CDFIs) that proved to be highly effective at stimulating, and funding, startup and enterprise expansion across ‘hard to reach’ communities and across areas of much greater breadth than inner cities and that achieved by City Growth Strategies (GHK, 2004b; Freiss, 2004). Indeed, CDFIs are only one institutional form with a broader range of social enterprises, social entrepreneurship activities, community and voluntary organisations, and alternative economic activities around self-provisioning, economies of regard and so forth that may have particular pertinence to ‘inner cities’. Whilst our argument is not to suggest that these examples of diverse economic activities are necessarily ‘the solution’ to the problem of the inner cities or, indeed, are confined to the spaces of the economically disadvantaged, their effectiveness and efficiency as possible policy solutions could, and should, be tested alongside other policy initiatives (including, for example, national support for regional/inner city champions, regional science policy, inter-regional transfer payments and social security) rather than simply reaching for the cluster toolkit. In other words other policy solutions do, or could, exist based upon different conceptualisations of the economy (and in particular its diversity), and which may have much greater resonance than the travelling concept of clusters for some of the problems of local and regional economic development. 23

Conclusion: putting clusters in their place We began this chapter by defending the potential of the concept of clusters as a theoretical, empirical and policy construct, and its ability to create fruitful dialogue

across

economic

analyses

holding

to

different

traditions.

Nevertheless, we end it arguing for the rightful place of this potential within the armoury of regional development activity - as only one club within the golf bag of regional development policy. We defend the cluster concept as providing the potential for added value

in

our

theorising

and

understanding

of

regional

economic

development. As a portmanteau concept, the clusters approach offers considerable potential to combine a variety of perspectives. Furthermore, writing as geographers, we would suggest this potential includes overcoming the economism of cluster analyses delivered within the realms of ‘geographical economics’ (Martin, 1999). In our argument we suggested that much work still remains to deliver this potential and highlighted two particular arenas of activity for further development – the relationship between clusters and financial architectures, and between clusters and firm performance. The variable evidence for the performance of clusters – and the intricate role of finance within firm activity - merely serves, in our view, to highlight the institutional and social practices that ‘make’ the economy, the economic diversity of the economy, and the role geography plays in this economic life. In the final section of the chapter the context of economic diversity is used to defend the right of clusters as a policy tool but to argue for ‘its place’; to argue against the current over-endowment of this brand within the armoury of regional development policy as the all-encompassing focus of regional development activity. Even if highly successful, the nature of success

24

delivered by cluster policy requires further clarification within the broader objectives of regional development, and reflection on clusters as a development tool, and not a model of the regional economy to the exclusion of all other alternative readings. Such reflection should countenance a number of criteria including the resonance of clusters with a particular set of internationally traded economic activities, the dangers of over-specialisation within a regional economy, a recognition that the economic and social outcomes of such policy are unlikely (on their own) to meet broader regional development aspirations, and the evidence of the effectiveness of other policy measures based upon different conceptualisations of the economy in delivering economic development. In this regard, Gibson-Graham’s (1995) challenging thesis on economic activity is just one example of alternative conceptualisations of ‘the economy’ that should remind us of both the richness of economic life (and our conceptualisation of this life 8), and the policy initiatives that might ensue. In sum, we strongly suggest a more sparing and nuanced use of a still to be enhanced cluster theory for understanding (elements of) the geographies and territorial performance of regional economies.

8

See, for example, Henry et al. (2002), Leyshon et al. (2003) and Smith and Stenning (2004) for a range of examples of alternative, but possibly complementary, readings of economic diversity.

25

References Alessandrini, P. and Zazzaro, A. (1999) “A 'possibilist' approach to local financial systems and regional development: the Italian experience” in R. Martin (ed) Money and the Space Economy Chichester, Wiley, pp. 71-92. Allen, J. (1992) ‘Services and the UK space economy: regionalisation and economic dislocation’ Transactions of Institute of British Geographers 7, 2, 292-305 Allen, J., Massey, D., Cochrane, A., Charlesworth, J., Court, G., Henry, N. and Sarre, P. (1998) Rethinking the Region Routledge, London. Ark, B. van, Broersma, L. and Hertog, P. den (2003) “Services innovation, performance and policy: a review” Structural Information Provision on Innovation in Services Synthesis Paper, MINEZ, The Hague, NL. Barnes, T. (2001) “Retheorizing economic geography: from the quantitative revolution to the “cultural turn” Annals of the Association of American Geographers, 91 (3) pp 546-565. Baptista, R. and Swann, P. (1998) ‘Do firms in clusters innovate more?’ Research Policy 27, 525-540 Bathelt, H., Malmberg, A. and Maskell, P. (2004) “Clusters and knowledge: local buzz, global pipelines and the process of knowledge creation” Progress in Human Geography 28 pp. 31-56. Becattini, G. (1990) “The Marshallian industrial district as a socio-economic notion” in F. Pyke, G. Becattini and W. Sengenberger Industrial districts and inter-firm co-operation in Italy. Geneva, Institute for Labour Studies, pp.37-51. Benneworth, P. S. and Charles, D. R. (2001) “Bridging cluster theory and practice: learning from the cluster policy cycle” in E. M. Bergman, P. den Hertog, D. R. Charles and S. Remoe (eds) Innovative clusters: drivers of national innovation systems, Paris: OECD Benneworth, P. and Henry, N. (2004) ‘Where is the value-added in the cluster approach? Hermeneutic theorizing, economic geography and clusters as a multi-perspectival approach’. Urban Studies 41, 5/6, 1011-1024 Benneworth, P. S., Raines, P., Danson, M., and Whittam, G. (2003) “Confusing clusters? Making sense of the cluster approach in theory and practice” European Planning Studies, 11 (5) pp 511-520. Bergman, E. M., den Hertog, P., Charles, D. R., and Remoe S. (eds), Innovative clusters: drivers of national innovation systems, Paris: OECD Bohman, J. (1993) New philosophy of social science: problems of indeterminacy Cambridge, MA: MIT Press. Boumans, J. and Bouwman, H. (2000) “De catrograife van de multimediasector” in H. Bouwman & W. Hulisnk (eds) Silicon Valley in de polder: ICT-clusters in de Lage Landen, Utrecht, NL: Lemma.

26

Broersma , L. (2002) “The Role of Services in Innovative Clusters” Structural Information Provision on Innovation in Services Working Paper, MINEZ, The Hague, NL. Brouwer, E. and Hertog, P den. (2000) “Key data on the Dutch information and communication cluster” Carnevali, F. (1996). "Between markets and networks: regional banks in Italy." Business History 38 (3) pp 84-100. Chevassus-Lozza, E. and Galliano, D. (2003) “Local spill-overs, firm organisation and export behaviour: evidence from the French food industry” Regional Studies 37 (2) pp 147-158. Coe, N., and Townsend, A. R. (1998) ‘Debunking the myth of localised agglomerations: the development of a regionalised service economy in South East England” Transactions of the Institute of British Geographers 23 (3) pp 385-404. Dalsgaard, M-H. (2001) “Danish cluster policy: improving specific framework conditions” in E. M. Bergman, P. den Hertog, D. R. Charles and S. Remoe (eds), Innovative clusters: drivers of national innovation systems, Paris: OECD Dow, S. (1990) Financial Markets and Regional Economic Development Avebury Press, London Dumais, G., Ellison, G. and Glaeser, E. L. (1997) “Geographical concentration as a dynamic process” National Bureau of Economic Research Working Paper No. 6270, Cambridge, MA: NBER. Dymski, G. (1990). "Money and credit in radical political economy: a survey of contemporary perspectives." Review of Radical Political Economics 22(2-3) pp 38-65. Dymski, G. and J. Veitch (1992) “Race and the financial dynamics of urban growth: LA as Fay Wray” City of Angels. C. Dersch. Los Angeles, Kendall/Hunt press: 131-158. Feakins, M. (2001). Commercial bank lending to SMEs in Poland: An empirical investigation. Oxford, School of Geography, University of Oxford. Florida, R. and M. Kenney (1988). "Venture capital, high technology and regional development." Regional Studies 22 pp 33-48. Freiss (2004) Evaluation of the Phoenix Development Fund http://www.sbs.gov.uk/content/analytical/evaluation/PhoenixDevFundE valuation.pdf ; accessed 5 December 2004 Gertler, M. S. (1984). "Regional capital theory." Progress in Human Geography 8 (1): pp 50-81. GHK (2004a) Evaluation of Community Development Finance Initiative http://www.sbs.gov.uk/content/analytical/evaluation/CDFIEvaluation.pdf ; accessed 5 December 2004

27

GHK

(2004b) Evaluation of City Growth Strategies http://www.sbs.gov.uk/content/analytical/evaluation/CityGrowthStrat egies.pdf; accessed 5 December 2004 Gibbs, D.C., Jonas, A.E.G., Reimer, S., and Spooner, D.J. (2001) “Governance, institutional capacity and partnerships in local economic development: theoretical issues and empirical evidence from the Humber Sub-region” Transactions of the Institute of British Geographers 26 (1) pp.103-120. Gibson-Graham, J. K. (1995) The End of Capitalism (As We Knew It): A Feminist Critique of Political Economy Oxford: Blackwell Gilsing, V. (2001) ‘Towards second-generation cluster policy: the case of the Netherlands’ in E. Bergman, P. Den Hertog, D. Charles, and S. Remoe (Eds) Innovative Clusters: Drivers of National Innovation Systems. Paris: OECD, pp.361-376. Gompers, P. and J. Lerner (1999). The venture capital cycle. Cambridge, MIT Press. Gordon, I. And McCann (2000) ‘Industrial clusters: complexes, agglomeration and/or social networks’ Urban Studies 37, 512-532 Grabher, G. (1993). The embedded firm: on the socio-economics of industrial networks. London, Routledge. Harloe, M. and E. Lebas, (eds) (1981) Cities, class and capital: new developments in the political economy of cities and regions. London, Edward Arnold. Harvey, D. (1973) Social justice and the city. London, Edward Arnold. Harvey, D. (1982) The limits to capital. Oxford, Blackwell. Harvey, D. and L. Chaterjee (1973) "Absolute rent and the restructuring of space by governmental and financial institutions." Antipode 6 pp. 2236. Henderson, J., Dicken, P., Hess, M., Coe, N.M. And Yeung, H.W-C. (2002). “Global production networks and the analysis of economic development”, Review of International Political Economy 9, 3, pp 436464 Henry, N. and Massey, D. (1995) ‘Competitive Time-Space in High Technology’ Geoforum, 26, 1, p. 49-64. Henry, N., McEwan, C. and Pollard, J. (2002) ‘Globalisation from below: Birmingham – postcolonial workshop of the world?’ Area 34, (2) pp.117-127 Hertog, P. den , Brouwer, E. and Maltha , S. (2000) Innovation in an Adolescent Cluster: The case of the Dutch Multimedia Cluster, Utrecht, NL: Dialogic. Hodgson, G. (1988). Economics and institutions: a manifesto for a modern institutional economics. Cambridge, Polity Press. Keeble, D. and Nachum, L. (2002) “Why do business service firms cluster? Small consultancies, clustering and decentralisation in London and 28

southern England” Transactions of the Institute of British Geographers 27 (1) pp 67-90. Ketels, C. H. M. (2003) “The development of the cluster concept: present experiences and further developments” Paper presented to Nord-Rhein Westfalen Conference on Clusters, Duisburg, Germany, available online at < www.isc.hbs.edu/pdf/Frontiers_ of_Cluster_Research_2003.11.23.pdf > Klagge, B. and Martin, R. (2004) ‘Decentralised versus centralised financial systems: is there a case for local capital markets?’. Paper presented at Financing Regional Enterprise University of Newcastle December 2004 Lagendijk, A. and Cornford, J. (2000) “Regional institutions and knowledge — tracking new forms of regional development policy” Geoforum 31 pp 209-218. Learmonth, D., Monro, A., and Swales, J. K. (2003) “Multi-sectoral cluster modelling: the evaluation of Scottish Enterprise cluster policy” European Planning Studies 11 (5) pp 567-584. Leland, E. and D. Pyle (1977). "Information asymmetries, financial structure and financial intermediation." Journal of Finance xxxii (2) 371-387. Leyshon, A. (2000) “Money and finance” in E. Sheppard and T. Barnes (eds) A Companion to Economic Geography Oxford, Blackwell pp 432-449. Leyshon, A., Lee, R. and Williams, C. (2003) Alternative Economic Spaces London, Sage Leyshon, A. and N. Thrift (1995). "Geographies of financial exclusion: financial abandonment in Britain and the United States." Transactions of the Institute of British Geographers 20 pp 312-341. Li, W., Y. Zhou, G. Dymski and M. Chee (2001). "Banking on social capital in the era of globalization: Chinese ethnobanks in Los Angeles." Environment and Planning A 33 pp 1923-1948. Lorenz, E. (1999). Trust, contract and economic cooperation, Cambridge Journal of Economics, 23, 3, 301-315 Lublinski, A. E. (2003) “Does geographical proximity matter? Evidence from clustered and non-clustered aeronautics firms in Germany” Regional Studies 37 (5) pp 453-467. Malecki, E. (1997). "Entrepreneurs, networks and economic development: a review of recent research." Advances in Entrepreneurship, Firm Emergence and Growth 3 pp 57-188. Martin (1999) “The new ‘Geographical Turn’ in economics: some critical reflections” Cambridge Journal of Economics 23 pp.65-91 Martin, R. and Sunley, P. (2003) “Deconstructing clusters: chaotic concept or policy panacea?” Journal of Economic Geography 3 (1) pp 5-35. Massey, D. (1995) “Masculinity, dualisms and high technology” Transactions of the Institute of British Geographers 20 (4) pp.487-499

29

Massey, D. and Meegan, R. (1985) (eds) Politics and methods : contrasting studies in industrial geography, London: Methuen McKendrick, J. H. (1999) “Multi-method research: an introduction to its application in population geography” Professional Geographer 51 (1) pp 40-50. Miller, D., Ed. (1995). Acknowledging consumption. London, Routledge. Modigliani, F. and M. H. Miller (1958). "The cost of capital, corporate finance and the theory of investment." American Economic Review 48 (3) pp 261-297. Newlands, D. (2003) “Competition and cooperation in industrial clusters: the implications for public policy” European Planning Studies 11 (5) p 521-532. O'Neill, P. (2001). "Financial narratives of the modern corporation." Journal of Economic Geography 1 (2) pp 181-199. Oort, F. G. van (2004) Urban growth and innovation: spatially bounded externalities in the Netherlands, Aldershot: Ashgate. Pinch, S., Henry, N., Jenkins, M. and Tallman, S. (2003) “From ‘industrial districts’ to ‘knowledge clusters’: A model of knowledge dissemination and competitive advantage in industrial agglomerations” Journal of Economic Geography, 3, 4, pp 373-388 Pollard, J. S. (2003). "Small firm finance and economic geography." Journal of Economic Geography 3 (4) pp 429-452. Pollard, J. S. (forthcoming). "Financing an alternative? Micro-business financial networks in Birmingham's Jewellery Quarter." Environment and Planning A. Porter, M. (1995) “The competitive advantage of the Inner City” Harvard Business Review, 74, p. 61-78 Porter, M. E. (1998) On competition, Boston: Harvard Business School. Porter, M. and Ketels, C. (2003) UK Competitiveness: Moving to the Next Stage DTI, London Pratt, D. (1998). "Re-placing money: the evolution of branch banking in Britain." Environment and Planning A 30(12) pp 2211-2226. Quah, D. (2001) “ICT clusters in development: theory and practice” European Investment Bank Papers, 6 (1) pp 85-101. Raines, P. (2002) “Cluster policy - does it exist?” in P. Raines (ed.) Cluster development and policy, Ashgate, Burlington VT. Rosenfeld, S (2003) “Expanding opportunities: cluster strategies that reach more people and places” European Planning Studies 11 (4) pp. 359-377 Russo, P. and P. Rossi (2001). "Credit constraints in Italian industrial districts." Applied Economics 33 (11) pp 1469-1477. Sassen, S (1994) Cities in a World Economy Pine Forge Press Sayer, A. (1995). Radical political economy: a critique. Oxford, Blackwell.

30

Smith, V., Broberg, A. L. And Overgaard J. (2002). “Does Location Matter for Firms' R&D Behaviour? Empirical Evidence for Danish Firms”. Regional Studies 36, 8, pp. 825-832. Smith, A. and Stenning, A. (2004) Social Exclusion, Spaces of Household Economic Practice and Post-Socialism Mimeo of ESRC Grant Application available from author at [email protected] Spence, A. (1974). Market signalling. Cambridge, Harvard University Press. Squires, G. D., Ed. (1992). From redlining to reinvestment: community responses to urban disinvestment. Philadelphia, Temple University Press. Stiglitz, J. (1994). "Peer monitoring in credit markets." World Bank Economic Review 4 pp 351-366. Storper, M. (1995). "The resurgence of regional economies, ten years later: the region as a nexus of untraded interdependencies." European Urban and Regional Studies 2 (3) pp 191-221. Storper, M. (2001). "The poverty of radical theory today: from the false promises of Marxism to the mirage of the cultural turn." International Journal of Urban and Regional Research 25 (1) pp 155-179. Storper, M. and R. Salais (1997). Worlds of production: the action frameworks of the economy. Cambridge, Harvard University Press. Storper, M. and R. Walker (1989). The capitalist imperative: territory, technology and industrial growth. Oxford, Blackwell. Swann, G. (2002) The implications of clusters: some reflections. Paper presented at the Clusters Conference, Manchester Business School, April. Tallman, S., Jenkins, M., Henry, N. and Pinch, S. (2004) “Knowledge clusters and competitive advantage” Academy of Management Review, 29 (2) pp. 258-271 Thompson, G. (1977). "The relationship between the financial and industrial sector in the United Kingdom economy." Economy and Society 6 pp. 235-283. Thrift, N. and Olds, K. (1996) ‘Refiguring the economic in economic geography’ Progress in Human Geography 20, 3, 311-337 Thrift, N. (2005) Knowing Capitalism London, Sage. Tickell, A. (2003) ‘Cultures of money’ in K. Anderson, M. Domosh, S. Pile and N. Thrift (eds) Handbook of cultural geography. London, Sage pp 116130. Wolfe, D and Gertler, M. (2004) “Clusters from the Inside and Out: Local Dynamics and Global Linkages” Urban Studies 41 5/6 pp1071-1093 Woolthuis, R. K. (1999). Sleeping with the Enemy: Trust Dependence and Contract in Interorganisational Relationships. University of Twente Press, Enschede, The Netherlands.

31

Zook (2004) ‘The knowledge brokers: venture capitalists, tacit knowledge and regional development’ International Journal of Urban and Regional Research 28 3 621-641 Zysman, J. (1983). Governments, markets and growth. Ithaca, Cornell University Press.

32