Clusters and agglomeration (Motor Sport Valley (Henry and Pinch, 2000)…
Clusters and agglomeration
MacKinnon and Cumbers
The abandonment of Keyensian politics has led to state control loss over global flows of investment and cities have been fully exposed to international competitors and economies.
Agglomeration refers to the tendency for industries to cluster in particular places which is contrast to spatial dispersion where firms move from existing centres into less developed areas usually due to lower costs.
Knowledge and skills are key to urban agglomeration and economic development (Lundvall, 1994)
Our economy is increasingly knowledge based - knowledge is the most important resource (Lundvall, 1994)
Knowledge comes in 2 ways: 1) explicit knowledge which is formal and systematic education or 2) tacit knowledge which is direct experience and expertise which is not communicable
Triumph of the City (Glaesar, 2011)
cities are the absence of physical space between people and companies, they are proximity density and closeness
The paradox of a modern city is that proximity is more important in terms of economic costs in comparison to transporting goods. This reflects globalisation.
Universities and regional development
universities are being attributed a changing role in public policy, where they are increasingly positioned as central to the building of ‘knowledge economies’ at regional or urban as well as national scales (Harloe and Perry, 2004)
In Silicon Valley, companies that were formed by alumni of Stanford University’s electrical engineering programme, notably Hewlett Packard, are seen as critical to the emergence of the region as a technology centre in the post-war period (Castells and Hall, 1994)
firms will locate close to strong research universities to access their knowledge externalities (Audretsch et al., 2005)
Motor Sport Valley (Henry and Pinch, 2000)
The British motor sport industry dominates its world of production with a regional agglomeration, Motor Sport Valley, centred on Oxfordshire and stretching into East Anglia and down into Surrey.
The industry employs well in excess of 30,000 people and consists of scores of small-and-medium-sized firms
Approximately three quarters of the world’s single-seater racing cars are designed and assembled in this region including the vast majority of the most competitive Formula One, Championship Auto Racing Teams and Indy Racing League cars. The region is the base also for a large number of the world’s rallying teams.
a knowledge-based approach is also important in accounting for the maintenance and growth of the British motor sport industry and Motor Sport Valley as well as its origins
One of the most important ways in which knowledge is spread within the motor sport industry is by the rapid and continual transfer of staff (bodies) between the companies within the industry. Especially at the end of every racing season, there is an intense period of negotiation as designers, engineers, managers and, of course, drivers move between teams.
an important process of knowledge transfer is through the links constructors and manufacturers have with the numerous component suppliers. Many component suppliers work for more than one constructor making bespoke items of the clients design (but usually with a substantial contribution of their own expertise). Clearly, it is in the interests of these component suppliers not to disclose secrets to other constructors for whom they also undertake work or they would soon be out of business.
the importance of gossip, rumour and observation in defining productive knowledge has been highlighted. In the case of the motor sport industry, particular sites and mediums of this process include the pit lane, test track and race meetings and the frenzy of speculation encouraged by the large number of specialist magazines and extensive press and television coverage.
Business services: Driving the knowledge-based economy in the UK? (Faulconbridge, 2010)
The Office for National Statistics (2008a) reports that there are now close to 800,000 firms providing business services. Of these, 98.5 per cent of firms are small enterprises (employing less than 50 employees)
In 2003, for example, Knowledge intensive business services (KIBS) accounted for 38 per cent of all employment in London in 2003 but only 16 per cent in Leeds and Manchester, 13 per cent in Birmingham and 12 per cent in Liverpool (Wood, 2006).
IBS are distributed in a geographically uneven way,
meaning London and the South-east benefit disproportionately from the employment
and wages generated.
the financial crisis and recession of 2008–9 raised further questions about the role of business services in the UK’s economy. The recession led to a 3.25 per cent decline in the number of business service jobs in the UK (Office for National Statistics, 2009b). This is unsurprising. The dominance of non-manufacturing, finance-related business services in the UK means the business service economy was affected severely by the crisis that hit financial markets in 2007 and 2008. So an economy that is heavily reliant on business services for employment did not prove to be recession-proof and whilst some business service firms benefited from the recession (e.g. lawyers specialising in bankruptcy law), most were hit by massive drops in demand for their services.