Edited by Charlie Karlsson
Chapter 5: Knowledge-based Clusters: Regional Multiplier Models and the Role of ‘Buzz’ and ‘Pipelines’
Harald Bathelt 1 Introduction: regional networks and growth During the period of Fordist accumulation after World War II, many studies of economic development in industrialized countries were focused on the analysis of mass production in large, vertically-integrated ﬁrms, their input–output structure and related internationalization processes. Support policies for less industrialized, lagging regions in countries such as Germany were designed so that these regions would beneﬁt from the investments of large Fordist ﬁrms in branch plants. Drawing on export-base models of regional development, these policies assumed that regional exports of these branch plants would trigger a regional multiplier process and stimulate growth (e.g. Klemmer, 1995). With the Fordist crisis in the 1970s, it became clear, however, that alternative economic structures exist which can also be competitive, thanks to their capability to overcome the rigidities of the Fordist system. It was, for instance, hypothesized that tendencies toward an increasing segmentation and volatility in markets and new ﬂexible technologies would generate new growth for small and medium-sized ﬁrms (Piore & Sabel, 1984). From this, a new interest in localized growth based on networks of small and medium-sized ﬁrms has developed. Related work has assumed that ﬁrms can improve their performance and innovativeness if they are tied to close networks with other ﬁrms in the same region. This became the basis for a new regional policy approach in the 1990s which views the support of regional networks as being crucial to strengthening regional economies. The emphasis on small-ﬁrm growth and localized networks...
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