The second axis explores how global interorganizational networks (discussed in Axis 1) are transforming geographic locations, industrial clusters, and the spatial dynamics of industries. Economic regionalization leads to increased regional and local specialization because the reduction in transportation costs and trade barriers allow firms to cluster together to benefit from local economies of scale (Krugman, 1991; Fujita, Krugman, Venables, 2001), which in turn are expected to increase local productivity growth (Martin and Sunley, 1998). Industrial clustering has long been recognized as a driver of regional economic development and regional competitiveness.
Numerous studies have explored the link between geographic clustering of firms and regional performance, including knowledge and innovation creation, entrepreneurship, and job creation (Delgado et al., 2010, 2014; Feldman and Audretsch, 1999; Porter, 2003; Porter, 1998; Bresnahan and Gambardella, 2004).
Given the importance of industrial clustering, various researchers have attempted to analyze the factors that influence the performance of industrial clusters. Much of the earlier literature focused on the benefits of clustering and the characteristics of clusters such as their size and age. Nevertheless, recent studies have argued that the positive benefits of clustering do not depend simply on the size and age of a cluster, but rather on the pattern of linkages among firms within clusters or, in other words, the intensity with which firms collaborate within the boundaries of a cluster (Maskell and Lorenzen, 2004).
In addition, experts observed that firms are increasingly linking together outside the geographic boundaries of a cluster to connect to global production and innovation systems.
External investment and vertical supply chain formation with suppliers in other clusters help reduce firms’ costs (Sturgeon et al., 2008), while horizontal partnerships (e.g., joint R&D projects) with firms in other clusters facilitate access to knowledge that is not available within the firm’s own cluster (Bathelt et al., 2004; Owen-Smith and Powell, 2004). Recent theoretical work has suggested that the success of an industrial cluster depends on the configuration of its local and translocal linkages (Bathelt et al., 2004; Lorenzen and Mudambi, 2013; Wolfe and Gertler, 2004). However, most of this literature is conceptual and empirical research has lagged behind.
This line of research further explores how inter-firm linkages transform industrial clusters. It also examines the relationships and impacts between clusters within industries and in new industries such as artificial intelligence and green industry.
This research will help identify structural gaps and opportunities between sectors; information that will be very important for policy makers. By using this mapping of linkages and innovations (as measured by patents), they will be able to make more informed and refined decisions.