History Matters: Path dependence and innovation in British city ...

Figure 23: Cambridge and Swansea sources of information for innovation 2002-2004 CIS4
Clients or
customers
Suppliers
Competitors
Technical standards
Sources
of information
Professional
associations
Conferences etc.
Publications
Consultants etc.
Universities
Government/
public research
0 10 20 30 40
50 60
Percentage of firms rating sources as moderately or very important
Swansea
Cambridge
Great Britain
It is also clear that, during this diversification,
the Cambridge high-tech economy also
witnessed some relative shifts in fortune
across its sectors. Even here, ‘Computing
and related activities’ lost their dynamism
during the 1990s. Between 1981 and 1991,
employment grew by some 50 per cent,
but growth slowed to 11 per cent between
1991 and 2005 (see Figure 22). By contrast,
‘Research and Development’ (which covers a
range of high-tech and knowledge-intensive
activities) stagnated during the 1980s but has
been a leading resurgent sector since. As Figure
24 also shows, most of the city’s (relatively
small) manufacturing economy has declined
– or certainly lost its dynamism – since the
early-1980s. Thus Cambridge, too, shows some
similarities with Swansea’s development path
though the fundamental composition of its
economy is clearly markedly different.
Some key points emerge from this contrasting
of the Swansea and Cambridge economies.
First, the economic history of an area can
exert an important influence – for good or
ill – on its subsequent development: ‘history
matters’. Second, the creation of new local
economic-technological development pathways
reflects the interplay of local conditions and
factors. Third, as Cambridge illustrates, even
with a favourable mixture of local conditions
and events, the development of vibrant new
paths of innovative activity takes time (30-40
years in Cambridge’s case). This means that
it is difficult for a city with the legacy of an
old industrial past to switch quickly into new
technologically advanced activities. Fourth,
once critical momentum becomes established,
new economic trajectories appear to become
self-reinforcing and path dependent. Fifth, this
path dependent development can itself spawn
new technologies and activities as part of an
evolutionary diversification process. Finally,
growth does not, however, continue unabated
without the need for renewal as indicated in
Figure 4 (Part 1).
3.3 Absorptive capacity: firms need
sources of new external knowledge
As we have seen in Part 1, the ‘absorptive
capacity’ of a city-regional economy depends
on its firms’ ability to identify, assimilate and
exploit new external knowledge. Data as well
as information from respondents suggest
that there is a significant difference between
Cambridge’s and Swansea’s ability to absorb
new knowledge into the local innovation
system.
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