The Genesis of Innovation

The Genesis of Innovation

Systemic Linkages Between Knowledge and the Market

New Horizons in the Economics of Innovation series

Edited by Blandine Laperche, Dimitri Uzunidis and G. N. von Tunzelmann

The genesis and diffusion of innovation depends upon the density of the cognitive and market relationships among individuals, organisations and institutions at both the micro- and macro-economic level. By addressing the nature of these relationships, which include cooperation, competition and power, this book presents an important and progressive enquiry into the economic and social origins of innovation.

Chapter 11: Clumps or Clusters: A Case Study of Biotechnology and Life Sciences in the Seattle Area

Paul Sommers

Subjects: economics and finance, economics of innovation, innovation and technology, economics of innovation


Paul Sommers 1. INTRODUCTION: CLUMPS AND CLUSTERS Bob Drewel, the leader of a regional economic development organization in the Puget Sound, says that he is trying to encourage clusters of firms in the region, not clumps of firms.1 ‘Clumps’ in his view are firms that just happen to be located near each other but do not interact much to exploit their potential agglomeration economies, whereas clusters deliberately exploit a variety of interdependencies that make themselves and the region more competitive. This chapter examines this distinction, using the case of biotechnology-related firms and institutions in the Seattle area as a test of the theoretical perspective developed below. Drewel identified one of the key issues in the debates around cluster initiatives. Michael Porter’s classic cluster model focuses attention on competitive relations among firms in an industry striving to meet the needs of demanding customers, and among suppliers to those firms, all of which are located in proximity to each other. He also stresses the importance of supporting institutions in his well-known diamond model (Porter 1990, 2000). Stuart Rosenfeld, on the other hand, has emphasized the importance of collaboration among firms and key institutions in a regional cluster: The glue that continues to make proximity matter consists of ‘soft’ externalities, e.g. greater access to tacit knowledge, opportunities for deliberate acts of cooperation and collaboration that give companies the strength of numbers to influence customers, markets, or policies, and access to experienced labour. (Rosenfeld 2005, p. 6) Both of these theoretical frameworks...

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