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

Part 4: Why do cities differ in innovative performance?
Conclusions and some lessons for policy
4.1 Introduction
In this chapter we draw together our findings
and interpret them in the light of our initial
theoretical approach. We link those findings
to the concept of path dependence and the
contributions of absorptive capacity and local
innovation systems to the creation of new
pathways in city-regional economies and the
determination of the trajectories that they
follow subsequently. In doing this we note
the methodological difficulties involved in
analysing some elements of the conceptual
framework using the available time series
datasets that only span a period of around 25
years, when some urban industrial legacies go
back over many decades.
4.2 Knowledge, absorptive capacity and
local innovation systems
We have argued that knowledge assets and
the creation of new knowledge are critical
driving forces underlying both the creation of
new pathways and the subsequent parameters
determining the trajectories that they follow.
In particular, the historical development of
the aggregate capacities of urban economies
to identify, assimilate and exploit knowledge
(their absorptive capacity) determines the
range of possibilities for their immediate future
development. Those possibilities that they
explore are controlled by their systemic abilities
to make use of these assets to generate or
adopt new knowledge and to translate it into
commercial products and services (their local
innovation systems).
Our evidence on technological lock-in as
a source of path dependence is that it can
sometimes lead to decline or to reluctance
to adopt new pathways. In Swansea, for
example, there have been two major waves of
growth and decline as a result of technological
lock-in. The local economy was once based
on the extractive industries mining coal, iron,
copper, tin and zinc. At its peak, Swansea
was producing 60 per cent of the world’s
copper requirements. But a combination of
declining natural resources and a failure to
break out of and diversify its longstanding
mining technologies led to the closure of most
of these industries by the 1960s and 1970s.
This lesson had not been learned when the
second wave of growth developed on the
basis of foreign investment in electronics. The
technologies used in the production of cathode
ray tubes (CRTs) and video cassette recorders
(VCRs) were quickly rendered obsolete by the
new technologies of plasma and liquid crystal
display (LCD) screens and digital recording
devices such as DVD recorders. In both cases,
the local economy remained locked-in to
technologies that were overtaken either by
the discovery and exploitation of alternative
sources of natural resources or by the invention
of replacement technologies. By the time the
scale of these “gales of creative destruction”
was recognised locally it was too late to do
much about it.
Some respondents have suggested that even
Cambridge may be subject to an element of
technological lock-in. So, despite successive
waves of development spanning related
developments in IT, life-sciences, software,
and biotechnology it can be argued that
many of these new pathways are linked by
similar cognitive frameworks in advanced
computing. Despite this, there are emerging
areas concerned with media applications of
advanced computing, currently clustered in
62