Chapter 7: High-tech industry clustering rationales: the case of German biotechnology
Kerstin Wolter 1. INTRODUCTION Biotechnology is often heralded as a key sector that will shape future technological development in areas as important as food and healthcare. Although there is good reason to doubt some of the more ambitious predictions regarding the industry’s impact in times to come, there have been important changes set off by the emergence of biotechnology in the sectors mentioned above, especially regarding healthcare. Consequently, many regions worldwide strive to position themselves as the next biotechnology centre by building regional agglomerations of companies. What is however not fully understood – both in the case of biotechnology as well as other high-tech industries – are the rationales underlying a speciﬁc industry’s spatial concentration. Instead, much has been written about the positive effects resulting from agglomeration, starting as early as the 19th century with the formulation of Marshallian externalities (Marshall, 1972). According to Marshall, companies proﬁt from co-location due to the emergence of pooled labour markets, the availability of specialized inputs as well as knowledge spillovers. Additional agglomeration economies lie with public support for the industry, better infrastructural endowments (Brenner, 2000) or the emergence of commonly accepted business behaviour standards (Maskell, 2001). Taken together, these factors are argued to enhance the competitiveness of ﬁrms located within an agglomeration relative to those outside of it. The goal of this chapter is to take a step forward in the analysis. While the existence of agglomeration economies is not doubted, the aim is to investigate in more detail what factors are responsible...
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