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

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Figure 32: Cambridge and Swansea narrowly defined KIBS employment 1981-2005 Great Britain 72: Computing and related activities 7411 + 7412: Legal services; accounting, auditing & tax consultancy 7413 + 7414 + 7415: Other KIBS* 742 + 743: Architectural & engineering design activities and related technology 73: Research and development 744: Advertising Swansea 7411 + 7412: Legal services; accounting, auditing & tax consultancy 72: Computing and related activities 742 + 743: Architectural & engineering design activities and related technology 7413 + 7414 + 7415: Other KIBS* 73: Research and development 1992 SIC equivalents 744: Advertising Cambridge 73: Research and development 72: Computing and related activities 742 + 743: Architectural & engineering design activities and related technology 7413 + 7414 + 7415: Other KIBS* 7411 + 7412: Legal services; accounting, auditing & tax consultancy 744 : Advertising 0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 Percentage of all employees 2005 1991 1981 * 1981 figures for ‘Other KIBS’ are NOT directly comparable with the 1991 & 2005 figures, as it is not possible to produce an exact match of activities between the 1980 and 1992 SIC (the 1981 figures include a wider set of activities than is counted in 1991 & 2005). beyond these formal networks, individual firms are said to be constrained in developing their own networks by time constraints normal in start-up companies. The Welsh Assembly Government funds a number of programmes to encourage collaboration, although not everyone agrees that they help knowledge adoption. One company cites a governmentsupported programme that funds international visits in collaboration with British embassies, of which that particular company had made full use to help set up foreign markets and distributors. However, another respondent gives the example of government funding which encourages firms to collaborate within Wales with other companies and universities, but does not fund collaboration outside Wales. External knowledge networks beyond Wales are therefore not being actively encouraged through this type of funding mechanism, which is likely to be hampering new knowledge adoption. Knowledge commercialisation A key aspect of innovation is the commercialisation of new knowledge: what matters is turning patents into commercial products and services. Knowledge-intensive business services (KIBS) can provide important external expertise for this. Here again Cambridge leads Swansea. Cambridge outperforms the British average in half of 56
Figure 33: Cambridge and Swansea VAT registrations per 10,000 resident adults 1980-2005 70 60 50 VAT registrations per 10,000 resident adults 40 30 20 10 0 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Years Cambridge Great Britain Swansea the KIBS sectors and is particularly strong in R&D and ‘computing and related services’, whereas Swansea underperforms in all detailed sectors, and is particularly weak in R&D and advertising. Interestingly, despite its image as a place of ‘blue-sky’ scientific research, the importance of commercialisation of ideas is stressed by most Cambridge firms. “At the end of the day, it’s bringing ideas to the market that counts. Companies don’t make money just doing ‘blue-sky’ research. It’s having ideas that can be turned into profitable products that matters. That’s why we work closely with customer firms and manufacturers. They know we can develop and apply advanced and cutting edge technology to make a product idea into a marketable product. That’s where, for us anyway, the technological challenge comes from. That’s what our people are trained to do.” [Interview CAMB003] In such firms, managerial and marketing expertise is vital, since the general view is that scientists are not always very good at commercialising their ideas. Although the data does not suggest that Swansea is strong in KIBS, respondents say that local legal and accounting services are of a high standard. For example, a large firm of lawyers located near the Technium buildings specialises in technology expertise, which can serve its companies. Successful commercialisation also depends on identifying markets for new products and services. There are examples of companies in Swansea that have a global outlook on markets, and have commercialised their products accordingly: “We could not have started this company if we couldn’t have aspired for it to be a global company right from the beginning, because the critical mass in the UK alone was never going to be enough to support the several millions that were spent in development.” [Interview SW002] New path creation As we saw in Part 1, technologicalindustrial evolution can be of two main kinds: path dependent evolution along a given technological-industrial trajectory; and the creation of new paths and new trajectories. New path creation is most readily identified with the introduction of radical 57
Page 1:
Research report: July 2008 History
Page 4 and 5:
Executive summary History matters:
Page 6 and 7: 5. Strong local social networks. By
Page 8 and 9: Acknowledgements This report was wr
Page 10 and 11: Part 1: Introduction 1.1 History ma
Page 12 and 13: Figure 2: Three perspectives on eco
Page 14 and 15: Figure 4: Two alternative path depe
Page 16 and 17: In the long-run, city-regional econ
Page 18 and 19: into new practical and commercial f
Page 20 and 21: Part 2: Path dependence and innovat
Page 22 and 23: Map 2: Introduction of novel produc
Page 24 and 25: Figure 8: Selected cities best fit
Page 26 and 27: Figure 10: Change in knowledge-inte
Page 28 and 29: Figure 12: Knowledge partners locat
Page 30 and 31: Figure 14: Change in proportions of
Page 32 and 33: Figure 15: New firm formation in se
Page 34 and 35: Figure 17: New firm formation by in
Page 36 and 37: Part 3: Cambridge and Swansea: cont
Page 38 and 39: Around the same time, the public se
Page 40 and 41: with around 10-12 firms on each of
Page 42 and 43: Figure 19: The growth of high-tech
Page 44 and 45: Figure 22: Cambridge annual employm
Page 46 and 47: Figure 24: Cambridge and Swansea em
Page 48 and 49: Figure 25: Cambridge and Swansea kn
Page 50 and 51: Figure 27: The explosion of patenti
Page 52 and 53: Figure 29: Cambridge and Swansea na
Page 54 and 55: average in all forms of innovation
Page 58 and 59: new technologies, products or proce
Page 60 and 61: innovation. The Cambridge cluster w
Page 62 and 63: Part 4: Why do cities differ in inn
Page 64 and 65: of the subsequent construction of s
Page 66 and 67: These two studies illustrate how qu
Page 68 and 69: 68 or technology transfer programme
Page 70 and 71: Map 4: Warrington Master Plan 1972
Page 72 and 73: Map 6: Analysis of innovation outco
Page 74 and 75: Map 8: Analysis of innovation outco
Page 76 and 77: Map 10: Analysis of innovation outc
Page 78 and 79: Map 12: Analysis of innovation outc
Page 80 and 81: Appendix 2: Secondary data indicato
Page 82 and 83: Indicators of path dependent develo
Page 84 and 85: Table 11: GVA per capita Indicator
Page 86 and 87: Table 17: Patent applications per c
Page 88 and 89: Table 22: Geography of knowledge ne
Page 90 and 91: Table 28: Occupational breakdown of
Page 92 and 93: Cohen, W. and Levinthal, D. A. (199
Page 94: Roberts, M. (2004) The Growth Perfo
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