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Industrial Location Economics

Edited by Philip McCann

Because space is not homogenous, economic activities occur in different locations. Understanding the reasons behind this and understanding exactly how industries are spatially organized is the central theme of this book. Industrial Location Economics discusses different aspects of industrial location behaviour from a variety of theoretical and empirical perspectives. Each of the analytical traditions provides insights into the nature of industrial location behaviour and the factors which can influence it.
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Chapter 7: Clusters and Networks: Institutional Settings and Strategic Perspectives

Michael Steiner


Michael Steiner Karl-Franzens University, Graz, Austria 1. INTRODUCTION Clusters and networks are nowadays keywords with strong policy implications for the industrial location debate. Nevertheless their users should be aware of the changing fortunes of hit-lists of keywords and keep in mind the 40-year-old subtle criticism of Machlup (1958) against the use of ‘weaslewords’ and jargon in economics, alluding in this case to the extreme use of the word ‘structure’: ‘Structure, I am afraid, is often a weaselword used to avoid commitment to a definite and clear thought.’ In our case, substituting the words ‘cluster’ or ‘network’ for the word ‘structure’ also allows us to use Machlup’s phrasing without any difficulty. The word ‘structure’ (cluster or network) works in some ‘educated’ circles just as the phrase ‘you know what I mean’ works among less literate people. To persuade you that a certain measure is needed you are told that the ‘structure’ (network character) makes it absolutely indispensable, and that the ‘structural imbalance’ (missing network) cannot be coped with in any other way; surely, you understand, don’t you? (Machlup, 1958) Nevertheless he makes the strong distinction between clearer, vaguer and crypto-apologetic meanings of the word. In this chapter we will argue that the concepts of ‘cluster’ and ‘network’, despite their pervasive use and sometimes crypto-apologetic application as a policy strategy, do have clear meanings. We will suggest additional perspectives to underline the usefulness of the cluster concept by putting it into the context of recent theorizing on an adaptive logic...

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