Applied Evolutionary Economics and Economic Geography

Applied Evolutionary Economics and Economic Geography

Edited by Koen Frenken

Applied Evolutionary Economics and Economic Geography aims to further advance empirical methodologies in evolutionary economics, with a special emphasis on geography and firm location. It does so by bringing together a select group of leading scholars including economists, geographers and sociologists, all of whom share an interest in explaining the uneven distribution of economic activities in space and the historical processes that have produced these patterns.

Chapter 2: The Cambridge High-Tech Cluster: An Evolutionary Perspective

Elizabeth Garnsey and Paul Heffernan

Subjects: economics and finance, economics of innovation, evolutionary economics, geography, economic geography, innovation and technology, economics of innovation


Elizabeth Garnsey and Paul Heffernan 1. INTRODUCTION New knowledge-based firms emerge and grow around centres of learning and research. A process akin to ecological succession occurs as resources in the local science base are converted into and attract business activity, giving rise to a richer, more diverse economic habitat. To gain a better understanding of these developments we need to examine how processes of change operate over time. Cambridge provides an exemplar of endogenous formation of a high-tech cluster through spin-off, agglomeration and institutional adaptation. The importance of the strong science base at Cambridge is universally acknowledged, but the evolutionary micro processes through which its influence was exerted require further elucidation. Positive externalities providing incentives to firms to cluster in an area are not necessarily present at the time of the emergence of a new cluster of activity. Explanations in terms of measurable externalities beg the question of the evolutionary processes which gave rise to them. In other high-tech centres (Simmie et al., 2004), spillover effects have resulted from government spending on infrastructure, from large company investments, from metropolitan structures and defence spending on information technology (IT). These influences were absent in the case of Cambridge. After identifying the conceptual building blocks, we then examine indices of the growth of high-tech clusters in the Cambridge area. Underlying these aggregate trends are self-reinforcing mechanisms involving business spinouts and networks of knowledge diffusion. Case studies illustrating these processes, in the clustering of scientific instrumentation, information and...

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