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Chapter 5 – Cluster Structure 41 The third agglomeration economy is termed ‘knowledge spillovers’ (see Marshall, 1890, p. 271 and Krugman, 1995) 16 . Knowledge and information is cheaper and earlier available inside clusters than outside, because it flows more easily locally. This factor has been widely discussed and has become popular among regional policy makers. Empirical research has demonstrated the positive effect of clustering on innovation (see Baptista and Swann, 2000, Audretsch and Feldman, 1996 and Nooteboom, 1999) and the positive effect of clustering on knowledge diffusion (Baptista, 2000). Audretsch and Feldman (1996, p. 637) empirically prove that ‘industries where new economic knowledge tends to play a more important role have a higher propensity to cluster together’. This demonstrates that knowledge spillovers are an agglomeration economy 17 . Apart from the agglomeration economies, ‘dispersion forces’ exist. Without these forces all activities would be concentrated in one place. Two dispersion forces are widely acknowledged: land scarcity and congestion (see Fujita and Thisse, 1996). Agglomeration forces foster concentration. Since space is limited, land in clusters becomes scarce. This leads to high land prices. Such high land prices in a cluster decrease the attractiveness of locating in a cluster. High land prices - even though they reflect the strength of agglomeration economies - are a dispersion force. Congestion is a second dispersion force. In general, clusters need investments in transport infrastructure. Given the scarcity of land and concentration of economic activities, congestion is likely to develop. This decreases the attractiveness of a cluster, compared to locations without congestion. Table 6 shows the above-mentioned three agglomeration economies and two dispersion forces. 16 The argument that proximity influences the diffusion of knowledge does not really fit in Krugman’s neo-classical framework, because this is hard to reconcile with arguing that distance influences the diffusion of innovations, since ‘transport costs’ are irrelevant for the diffusion of ideas, information and knowledge. The importance of proximity is thus at odds with the assumptions of rational actors and perfect information. 17 Even though these spillovers are beneficial for the cluster, they are not necessarily beneficial for firms in the cluster. In many cases, firms would rather control and limit the spillover of their knowledge. In clusters this is difficult because information is ‘in the air’.
42 Table 6: Agglomeration and dispersion forces Agglomeration forces Dispersion forces Labor pool Land rent Suppliers Congestion Knowledge spillovers Source: based on Fujita et al, 1999, p. 346 The Performance of Seaport Clusters The presence and importance of the three agglomeration economies enhance the performance of a cluster. Such economies increase the attractiveness of locating in a cluster. The presence and importance of dispersion forces in a cluster reduces cluster performance. The balance between these two opposing forces changes over time. When the importance of agglomeration forces increases, the performance of a cluster improves, a growing effect of the dispersion forces reduces the performance of a cluster 18 . The strength of these forces differs between clusters and changes over time. For instance, land scarcity depends on expansion projects and congestion depends on initiatives to improve the transport infrastructure. 5.2 Internal competition Competition fosters efficiency and is an important engine for growth and change 19 . With regard to clusters, the distinction between internal competition (competition between firms located in the same cluster) and external competition (competition between a firm in the cluster with other firms outside the cluster) is relevant. Porter has strongly emphasized the 18 The balance between these forces is partially caused by developments in the environment of the clusters. We do not take these effects into account, since these are not cluster specific but ‘industry specific’ (for instance changes in the minimum efficient size of production) or the result from changing policies (such as international trade regulations (see Krugman, 1995) or changing trade costs (including transport costs). These effects are not caused by the cluster structure, but by the cluster environment. 19 Competition and cooperation can co-exist in a cluster. Competition in clusters is discussed in this section, cooperation in a cluster in the next chapter.
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PETER W. DE LANGEN The Performance
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10 STRUCTURE AND PERFORMANCE IN SEA
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13 CONCLUSIONS FOR ANALYZING CLUSTE
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14 CONCLUSIONS ON SEAPORT CLUSTERS
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236 Cluster barriers Entry barriers
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Appendix 2: Cluster Experts in the
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English Summary 249 The Performance
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English Summary 251 The third schoo
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Curriculum Vitae 271 Curriculum vit
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The Performance of Seaport Clusters
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