Entrepreneurship and Development: The Role of Clusters

Defining entrepreneurship as the creation of new organisations,this paper explores,from a literature review standpoint,the moderating effect of clusters on the impact of entrepreneurship on development. To identify potential causes of this moderating effect, the paper focuses on three different impacts: entrepreneurship on development, clusters on development,and clusters on entrepreneurship. The findings of the paper are threefold.First,entrepreneurship is positively associated with economic growth.Given the importance of entrepreneurship in changing the economic and social structure of the economy,more research on the impact of entrepreneurship on development - i.e. focus on capabilities rather than on output - is needed. Second,it is difficult to reach empirical generalisations on the impact of clusters on development and entrepreneurship given conceptual and methodological constraints. Both positive results and caveats are found at different levels of analysis and at different stages of development of a cluster. Finally, given the previous finding, it is difficult to generalise on the impact of clusters on the association between entrepreneurship and development. Consensus on and validity between conceptual and operational definitions of clusters; consideration of context as well as process and, therefore, quantitative and qualitative methods; and differentiation between levels of analysis controlling for cluster stage and strength are the main criteria for future studies to consider to disentangle the impact of clusters on entrepreneurship, development and the association between entrepreneurship and development.

[1]  Maryann P. Feldman.  The geography of innovation , 1994 .

[2]  P. Hertog,et al.  Innovative clusters: drivers of national innovation systems , 2001 .

[3]  R. Pouder,et al.  Hot Spots and Blind Spots: Geographical Clusters of Firms and Innovation , 1996 .

[4]  Gerald A. Carlino,et al.  Contrasts in Agglomeration: New York and Pittsburgh Reconsidered , 1980 .

[5]  S. Shane,et al.  The Promise of Entrepreneurship as a Field of Research , 2000 .

[6]  W. Powell,et al.  The iron cage revisited institutional isomorphism and collective rationality in organizational fields , 1983 .

[7]  R. Eccles,et al.  Networks and Organizations: Structure, Form, and Action , 1992 .

[8]  E. Glaeser,et al.  Growth in Cities , 1991, Journal of Political Economy.

[9]  Bengt-Åke Lundvall,et al.  The Globalising Learning Economy: Implications for Innovation Policy , 1998 .

[10]  Walter Bernard Mccormick,et al.  LEAN AND MEAN , 1998 .

[11]  S. Fukuda‐Parr,et al.  Development as Capability Expansion , 2003 .

[12]  Helmut Voelzkow,et al.  The Governance of Local Economies in Germany , 2001 .

[13]  Allen J. Scott,et al.  New Industrial Spaces: Flexible Production Organization and Regional Development in North America and Western Europe , 1989 .

[14]  Martin Ravallion,et al.  Good and bad growth: The human development reports , 1997 .

[15]  Brian Everitt,et al.  Cluster analysis , 1974 .

[16]  Stan Czamanski,et al.  Industrial complexes: Their typology structure and relation to economic development , 1977 .

[17]  W. Gartner.  “Who Is an Entrepreneur?” Is the Wrong Question , 1988 .

[18]  Joyce Carol Oates.  Many Are Called , 1975 .

[19]  Michael Peneder,et al.  Cluster techniques as a method to analyze industrial competitiveness , 1995 .

[20]  David Terkla,et al.  Business Strategy and Cross-Industry Clusters , 1995 .

[21]  Raimar Richers.  The theory of economic development , 1961 .

[22]  S. Shane,et al.  The Promise of Enterpreneurship as a Field of Research , 2000 .

[23]  Twp Wong,et al.  The Social Structure , 2000 .

[24]  William H. Glick,et al.  Typologies As a Unique Form Of Theory Building: Toward Improved Understanding and Modeling , 1994 .

[25]  Edward M. Bergman,et al.  National Industry Cluster Templates: A Framework for Applied Regional Cluster Analysis , 2000 .

[26]  K. Pavitt,et al.  Large Firms in the Production of the World's Technology: An Important Case of “Non-Globalisation” , 1991 .

[27]  Mike Wright,et al.  Editor's Introduction: Low and MacMillan Ten Years On: Achievements and Future Directions for Entrepreneurship Research , 2001 .

[28]  Colin Crouch,et al.  Local Production Systems in Europe: Rise or Demise? , 2001 .

[29]  Mike Raco,et al.  Competition, Collaboration and the New Industrial Districts: Examining the Institutional Turn in Local Economic Development , 1999 .

[30]  Phil Cooke,et al.  Clusters and Regional Specialisation , 2001 .

[31]  M. Feldman,et al.  R&D spillovers and the ge-ography of innovation and production , 1996 .

[32]  Laura Galloway,et al.  Global Entrepreneurship Monitor , 2002 .

[33]  Edward J Feser,et al.  Old and new theories of industry clusters , 1998 .

[34]  Deborah H. Streeter,et al.  The Entrepreneurial Process: Economic Growth, Men, Women, and Minorities , 1997 .

[35]  M. Porter,et al.  The Competitive Advantage of Nations. , 1990 .

[36]  Alessandro Lomi,et al.  Density Dependence and Spatial Duality in Organizational Founding Rates: Danish Commercial Banks, 1846-1989 , 2000 .

[37]  Paul D. Reynolds,et al.  SMEs : Employment, innovation and growth : the Washington Workshop , 1996 .

[38]  R. Martin,et al.  Deconstructing clusters: chaotic concept or policy panacea? , 2003 .

[39]  P. Swann,et al.  Do firms in clusters innovate more , 1998 .

[40]  M. Enright.  Regional Clusters: What We Know and What We Should Know , 2003 .

[41]  David J. Storey,et al.  Cross-national Comparisons of the Variation in New Firm Formation Rates , 1994 .

[42]  Anthony Mcgrew,et al.  Global Transformations: Politics, Economics, and Culture , 2000 .

[43]  Bennett Harrison,et al.  Industrial Districts: Old Wine in New Bottles? , 1992 .

[44]  Patricia H. Thornton.  THE SOCIOLOGY OF ENTREPRENEURSHIP , 1999 .

[45]  Paul D. Reynolds,et al.  New Firm Survival: Industry, Strategy, and Location , 1995 .

[46]  Frank Wilkinson,et al.  High-technology clusters, networking and collective learning in Europe , 2000 .

[47]  Murray B. Low,et al.  Entrepreneurship: Past Research and Future Challenges , 1988 .

[48]  J. Hollingsworth.  Contemporary Capitalism: Continuities and Changes in Social Systems of Production: The Cases of Japan, Germany, and the United States , 1997 .

[49]  M. Castells.  The rise of the network society , 1996 .

[50]  Amalya L. Oliver,et al.  Social Networks, Learning, and Flexibility: Sourcing Scientific Knowledge in New Biotechnology Firms , 1994 .

[51]  Antonio G. Calafati.  On Industrial Districts , 2000 .

[52]  B. Lundvall,et al.  The Learning Economy , 1994 .

[53]  J. Coleman.  Foundations of Social Theory , 1990 .

[54]  Michael J. Enright,et al.  Local Partnerships, Clusters and SME Globalization , 2002 .

[55]  Sergio Conti,et al.  The Industrial Enterprise and Its Environment: Spatial Perspectives , 1995 .

[56]  Michael R. Darby,et al.  GEOGRAPHICALLY LOCALIZED KNOWLEDGE: SPILLOVERS OR MARKETS? , 1998 .

[57]  G. Becattini,et al.  Industrial districts and inter-firm co-operation in Italy , 1990 .

[58]  T. Allen,et al.  Poverty and development into the 21st century , 2000 .

[59]  D. Audretsch,et al.  Capitalism and democracy in the 21st Century: from the managed to the entrepreneurial economy* , 2000 .

[60]  Ernest Sternberg,et al.  The Sectoral Cluster in Economic Development Policy: Lessons from Rochester and Buffalo, New York , 1991 .

[61]  Harvey Molotch,et al.  The Regional World , 1998 .

[62]  A. Markusen.  Sticky Places in Slippery Space: A Typology of Industrial Districts* , 1996 .

[63]  M. Storper.  The geographical foundations and social regulation of flexible production complexes. , 1989 .

[64]  Douglas W. Lyon,et al.  Issues of Research Design and Construct Measurement in Entrepreneurship Research: The past Decade , 2001 .

[65]  Mark S. Granovetter.  Economic Action and Social Structure: The Problem of Embeddedness , 1985, American Journal of Sociology.

[66]  Edward M. Bergman,et al.  Industrial and Regional Clusters: Concepts and Comparative Applications , 1999 .

[67]  R. Sternberg.  New Firms, Regional Development and the Cluster Approach—What Can Technology Policies Achieve? , 2003 .

[68]  Roberta Rabellotti,et al.  Enterprise clusters and networks in developing countries , 1997 .

[69]  G. Garofoli.  Endogenous development and Southern Europe , 1992 .

[70]  Ben Fine,et al.  Endogenous Growth Theory: A Critical Assessment , 2000 .

[71]  Joel A. C. Baum,et al.  Toward An Institutional Ecology of Organizational Founding , 1996 .

[72]  William J. Baumol,et al.  Entrepreneurship in Economic Theory , 1968 .

[73]  R. Putnam.  Making Democracy Work , 1993 .

[74]  J. Henderson,et al.  Geography and Development , 1985 .

[75]  M. Porter.  Competitive Advantage, Agglomeration Economies, and Regional Policy , 1996 .

[76]  R. Oakey,et al.  High-Technology New Firms: Variable Barriers To Growth , 1995 .

[77]  Roberta Capello,et al.  Industrial Enterprises and Economic Space: the Network Paradigm , 1996 .

[78]  M. Cowen,et al.  Doctrines of Development , 1996 .

[79]  M. Storper,et al.  The Effects of Globalization on the Location of Industries in the OECD and European Union , 2000 .

[80]  M. Harper.  World Development Report 1991 , 1991 .

[81]  C. Sabel,et al.  The Second Industrial Divide: Possibilities for Prosperity , 1984 .

[82]  Wilbur R. Maki,et al.  Explaining regional variation in business births and deaths: U.S. 1976–88 , 1995 .

[83]  F. Pyke,et al.  Local and regional response to global pressure : the case of Italy and its industrial districts , 1996 .

[84]  J. Devine.  Lean and Mean , 1996 .

[85]  Sv. E. Green-Pedersen.  An entrepreneurial history , 1976 .

[86]  Erkko Autio,et al.  Global Entrepreneurship Monitor 2001 Executive Report , 2001 .

[87]  Harvey Armstrong,et al.  Regional Economics and Policy , 1985 .

[88]  C. Freeman.  Technology policy and economic performance : lessons from Japan , 1987 .

[89]  P. McCann,et al.  Industrial Clusters: Complexes, Agglomeration and/or Social Networks? , 2000, Urban Studies.

[90]  Joel A. C. Baum,et al.  Localized Competition and Organizational Failure in the Manhattan Hotel Industry, 1898-1990 , 1992 .

[91]  Paul Krugman,et al.  WHAT'S NEW ABOUT THE NEW ECONOMIC GEOGRAPHY? , 1998 .

[92]  D. Audretsch.  Agglomeration and the location of innovative activity , 1998 .

[93]  M. Trevor.  Technology Policy and Economic Performance. Lessons from Japan , 1989 .

[94]  Roy Thurik,et al.  An Eclectic Theory of Entrepreneurship: Policies, Institutions and Culture , 2002 .

[95]  Bengt-Åke Lundvall,et al.  Nation States and Economic Development:From National Systems of Production to National Systems of Knowledge Creation and Learning , 2000 .

[96]  Walter Isard,et al.  Location and Space-Economy , 1956 .

[97]  Michael Fritsch,et al.  Growth Regimes over Time and Space , 2002 .

[98]  S. Klepper.  Entry, Exit, Growth, and Innovation over the Product Life Cycle , 1996 .

[99]  M. Brewer,et al.  Intellectual Capital and the Birth of U.S. Biotechnology Enterprises , 1994 .

[100]  Bengt-Åke Lundvall,et al.  National Systems of Innovation: towards a theory of innovation and interactive learning London: Pint , 1995 .

[101]  Ziona Austrian,et al.  Cluster Case Studies: The Marriage of Quantitative and Qualitative Information for Action , 2000 .

[102]  Roberta Rabellotti,et al.  Is there an “industrial district model”? Footwear districts in Italy and Mexico compared , 1995 .

[103]  R. Solow.  TECHNICAL CHANGE AND THE AGGREGATE PRODUCTION FUNCTION , 1957 .

[104]  F. Stewart,et al.  Economic Growth and Human Development , 1997 .

[105]  Bruce C. Straits,et al.  Approaches to social research , 1993 .

[106]  R. Lucas.  On the Mechanics of Economic Development , 1988 .

[107]  Charles F. Sabel,et al.  HISTORICAL ALTERNATIVES TO MASS PRODUCTION: POLITICS, MARKETS AND TECHNOLOGY IN NINETEEN-THCENTURY INDUSTRIALIZATION , 1985 .

[108]  Amartya Sen.  Development and Thinking at the Beginning of the 21st Century , 1997 .

[109]  Erkko Autio,et al.  Global Entrepreneurship Monitor (Gem)-2002 Executive Report , 2002 .

[110]  Charles W. Hofer,et al.  Theorizing about Entrepreneurship , 1992 .

[111]  Anders Malmberg,et al.  Towards an explanation of regional specialization and industry agglomeration , 1997 .

[112]  J. Stiglitz,et al.  The Great Transformation: The Political and Economic Origins of Our Time , 2001 .

[113]  R. Florida,et al.  The Breakthrough Illusion: Corporate America's Failure To Move From Innovation To Mass Production , 1990 .

[114]  I. Hardill.  Entrepreneurship and local economic development in the East Midlands, UK , 2001 .

[115]  Joel A. C. Baum,et al.  Love Thy Neighbor? Differentiation and Agglomeration in the Manhattan Hotel Industry, 1898-1990 , 1997 .

[116]  James B. Wade,et al.  Density dependence in the organizational evolution of the American brewing industry across different levels of analysis , 1991 .

[117]  M. Tushman,et al.  On the Organizational Determinants of Technological Change: Towards a Sociology of Technological Evolution , 1992 .

[118]  Howard E. Aldrich,et al.  Many are Called, but Few are Chosen: An Evolutionary Perspective for the Study of Entrepreneurship , 2001 .

[119]  Roberta Rabellotti,et al.  The Internal Heterogeneity of Industrial Districts in Italy, Brazil and Mexico , 1999 .

[120]  Michael E. Porter,et al.  Clusters of innovation : regional foundations of U.S. competitiveness , 2001 .

[121]  T. Palva,et al.  Pages 1-19 , 2001 .

[122]  Werner Sengenberger,et al.  Industrial districts and local economic regeneration , 1993 .

[123]  Rui Baptista,et al.  A comparison of clustering dynamics in the US and UK computer industries , 1999 .

[124]  P. Romer.  Increasing Returns and Long-Run Growth , 1986, Journal of Political Economy.

[125]  C. Mason,et al.  The Entrepreneurial Process , 1999 .

[126]  Alessandro Lomi,et al.  The Population Ecology of Organizational Founding: Location Dependence and Unobserved Heterogeneity , 1995 .

[127]  Edgar M. Hoover,et al.  Location Theory and the Shoe and Leather Industries. , 1937 .

[128]  J. Schumpeter,et al.  Capitalism, Socialism and Democracy , 1943 .

[129]  M. Porter.  Location, Competition, and Economic Development: Local Clusters in a Global Economy , 2000 .

[130]  P. Ingram,et al.  Friendships among Competitors in the Sydney Hotel Industry1 , 2000, American Journal of Sociology.

[131]  D. North.  Competing Technologies , Increasing Returns , and Lock-In by Historical Events , 1994 .

[132]  E. Visser.  A Comparison of Clustered and Dispersed Firms in the Small-Scale Clothing Industry of Lima , 1999 .

[133]  Pino G. Audia,et al.  The Social Structure of Entrepreneurial Activity: Geographic Concentration of Footwear Production in the United States, 1940–19891 , 2000, American Journal of Sociology.

[134]  W. Arthur.  ‘Silicon Valley’ locational clusters: when do increasing returns imply monopoly? , 1990 .

[135]  Giovanna Ceglie,et al.  SME CLUSTER AND NETWORK DEVELOPMENT IN DEVELOPING COUNTRIES: THE EXPERIENCE OF UNlDO , 1999 .

[136]  M. Porter.  The Competitive Advantage Of Nations , 1990 .

[137]  Stuart A. Rosenfeld.  Bringing business clusters into the mainstream of economic development , 1997 .

[138]  A. Chandler,et al.  Regional Advantage: Culture and Competition in Silicon Valley and Route 128 , 1994 .

[139]  A. Jaffe.  Real Effects of Academic Research , 1989 .

[140]  M. Polanyi.  Chapter 7 – The Tacit Dimension , 1997 .

[141]  J. Schumpeter.  Capitalism, Socialism and Democracy , 1943 .

[142]  James B. Wade.  Dynamics of organizational communities and technological bandwagons: An empirical investigation of community evolution in the microprocessor market , 1995 .

[143]  R. Putnam,et al.  Making Democracy Work: Civic Traditions in Modern Italy. , 1994 .

[144]  Roy Thurik,et al.  Linking Entrepreneurship and Economic Growth , 1999 .

[145]  Paula E. Stephan,et al.  Company-Scientist Locational Links: The Case of Biotechnology , 1996 .

[146]  W. Baumol.  Entrepreneurship: Productive, Unproductive, and Destructive , 1990, Journal of Political Economy.

[147]  William A. Brock,et al.  Small business economics , 1989 .

[148]  J. Clapp,et al.  Development as freedom , 1999 .

[149]  Anne S. Miner.  Dynamics of Organizational Populations: Density, Legitimation, and Competition , 1993 .

[150]  Stan Czamanski,et al.  Identification of Industrial Clusters and Complexes: a Comparison of Methods and Findings , 1979 .

[151]  M. Greenhut,et al.  Location and Space Economy , 1958 .

[152]  Richard Florida,et al.  The Learning Region , 2002 .

[153]  John H. Dunning,et al.  Regions, Globalization, and the Knowledge Economy: The Issues Stated , 2001 .

[154]  Ajay Chhibber,et al.  World development report 1997 : the state in a changing world , 1997 .

[155]  E. Malecki.  Entrepreneurship in Regional and Local Development , 1993 .

[156]  C. Prahalad,et al.  The dominant logic: A new linkage between diversity and performance , 1986 .