The Performance of Seaport Clusters - RePub - Erasmus Universiteit ...

Chapter 4 – Variables of Cluster Performance 29
In this quote, Porter discusses a number of relevant issues: the role of diversity in a cluster,
common mental maps in clusters, interaction in clusters, the role of entry in a cluster and the
role of information flows in a cluster. All these aspects are relevant, but Porter does not
develop them in much detail. Furthermore it remains unclear how exactly performance is
influenced by the elements of the diamond (Martin and Sunley, 2003).
4.1.3 New economic geography
New Economic Geography starts from the observation that clustering - also termed
agglomeration - can be widely observed (see Krugman, 1991). This clustering of activities in
particular locations has remained largely unexplained by (mainstream) economists.
Incorporating space in economic models would therefore, according to Krugman, be a step
forward in (mainstream) economics. Krugman, referring to Marshall (1890) identifies three
general agglomeration economies: the presence of a labor pool, the presence of suppliers
and clients, and knowledge spillovers. We discuss these forces more in detail in the next
chapter.
Such agglomeration economies are ‘centripetal forces’ (Fujita, Krugman and Venables,
1999), forces that promote spatial concentration (clustering). These forces are opposed to
agglomeration diseconomies, ‘centrifugal’ forces that oppose concentration, such as
congestion and high land prices. In New Economic Geography an analysis of the equilibrium
- and changes in the equilibrium - between these two forces is center stage. When
agglomeration economies dominate, clusters will develop. If such economies become less
relevant in an industry, this leads to spatial deconcentration. New Economic Geography
focuses on processes of agglomeration in general and does not deal with specific clusters
and the question how these clusters evolve over time.
4.1.4 The Industrial District School
The Industrial District School analyzes local production systems. These consist of various,
mainly small and medium sized firms that are embedded in their environment and cooperate
with other firms. In the school relatively much attention is given to behavioral aspects of
industrial districts, such as the development of trust, social embeddedness of firms in the
region and governance issues in industrial districts. The school argues that clusters are
characterized by a specific institutional structure and a specific culture and furthermore, that
such variables influence the performance of a cluster (Harrison, 1992). Industrial district