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Application possibilities of the micro-meso-macro framework in economic geography
Abstract
The micro-meso-macro approach is an analytical framework to study processes of economic evolution. In economic geography it has been hardly taken up so far. Using the example of spatial implications of corporate processes of adaption and renewal after structural interruptions, this paper shows at a conceptual level how the framework could be applied to topics in economic geography. Compared to other approaches, the micro-meso-macro framework has several advantages: It allows to analyse the coevolution between different forms of knowledge in an economic system and the context in which companies operate. By integrating mechanism rules, it also considers the ability of firms to adapt to a changing environment. Furthermore, it is possible to explain the interplay between enterprises and higher levels of analysis like industry sectors or regions through the analytical unit of the rule trajectory. In this paper it is argued not to assign any spatial dimension to the different levels of analysis per se, but to examine the mechanism rules along trajectories of operational rules under a spatial perspective.
... This article will deal with relationships between path dependence, agency, institutions and regional economic transformation processes. By applying a micro-meso-macro terminology used in evolutionary theories (Dopfer et al., 2004;Schröder, 2011), interactions between different levels of agency on the city level are investigated to understand changes along regional pathways. Thus, the complexity of agency and its interactions on different levels shall be revealed to better understand the necessary coordination of agency within regional policies. ...
... In this context, cities are understood as complex adaptive systems . 'Complexity' refers to a multitude of interactions between single system elements along different scales (firms, inter-organisational collaborations, local entities;O'Sullivan et al., 2006;Schröder, 2011;Urry, 2005). These systems are under continuous exogenous and endogenous pressures to change and react to these pressures by emerging self-organising capacities. ...
The article provides elements of a theoretical framework to embed the discussion of regional path dependence and transformation into evolutionary approaches of complex adaptive systems. The evolutionary perspective avoids the focus on lock-in as a major challenge of path dependence, while allowing for more options along path-dependent processes including path plasticity and path creation. The empirical part is based on a qualitative study of transformation processes in three German cities, Stuttgart, Dortmund and Chemnitz, during the last 25 years, showing the variety of combinations between micro, meso and macro interactions as well as the diversity of relevant policies to gain influence on local transformation processes.
... In contrast to biological systems, these potentials for adjustment and change in complex social systems like regional economies are based on conscious decisions on the micro level (Martin and Sunley, 2013;Schröder, 2011). These decisions on investments in qualifications, technological development, market exploration or inter-organisational collaboration, however, need to be coordinated between the firms and organisations to be able to react to external shocks. ...
... A typical example for these adjustments refers to collective bargaining agreements between industrial trade unions and employers' associations, which maintained their mantle but included flexible elements to cope with transformation crises on the firm-level, improve further education or increase the flexibility of working-time. 3 This process of institutional path plasticity also illustrates the interrelationships between micro-, meso-and macro-level adjustments along evolutionary processes (see also Dopfer et al., 2004;Schröder, 2011). On the micro-level of single firms, new elements of interactions and coordination were introduced to cope with challenges of internationalisation, intensified collaboration with partners along the supply chain or in cross-industry innovation processes. ...
This paper links two strands of literature (collective learning and resilience) by looking at experiences with collective learning as precondition of regional economic resilience. Based on a qualitative empirical study, the emergence of collective learning structures in the Stuttgart region after a macroeconomic and structural crisis at the beginning of the 1990s is investigated. This process of building up adaptive capabilities in the region follows a pattern of institutional path plasticity. The relevance of these experiences with adjustment processes and adaptive capabilities for the economic performance during the great recession in 2008-2009 is finally shown by following episodic narratives of interview partners and secondary firm panel results.
... Similar comments have been made by others, such as who warned about the dangers of employing a 'linear' approach when investigating the issue of meso-level relatedness. This coincides with other epistemological arguments proposed in the evolutionary literature (see Dopfer et al., 2004;Schroeder, 2011): concentrating on only one level of analysis implicitly assumes that most of the heterogeneity is located at the chosen level, whereas alternate levels of analysis are considered to be more or less homogenous. Studies of firm-level heterogeneity assume, for example, that significant variation occurs at the firm level of analysis, whereas individuals are more or less homogenous or randomly distributed across firms. ...
This dissertation investigates the theoretical and conceptual underpinnings of evolutionary economic geography (EEG) and its approach to regional restructuring. A dynamic approach considering that regional industries are continuously renewing (albeit to differing degrees) is developed. Such considerations have largely been ignored in investigations of regional restructuring and much work on EEG, which have instead focused on how to re-establish former contingencies following external shocks, i.e. a reactive approach. The concept of regional industry renewal is discussed, emphasising
that regional restructuring is a continuous process characterized by different ‘intensities’ in different regions and/or time periods.
Moreover, it is emphasized throughout this dissertation that EEG has addressed the micro level of firms and organizations, the meso
level of regional settings, and the macro level of national and international settings. However, particular focus has been put on the meso level, as is illustrated by the literatures on industry clusters, regional innovation systems (RIS) and the concept of related variety. However, ‘uni-level’ approaches focusing on the meso level have
implied that EEG has predominantly developed imprecise categorizations of micro-level activity and that the role of the macro level mainly has been approached by looking at supraregional linkages as relatively homogenous. These approaches can largely be classified as static, and dynamic approaches that treat the three levels as integrated are lacking.
Thus, the approach to regional industry renewal used herein emphasizes that its sources can be both endogenous and exogenous to a region, and also that agency can play a role in shaping how these processes develop spatio-temporally, i.e. that different actors can proactively contribute to the process. In addition, the few recent contributions investigating the micro, meso and macro levels in conjunction have largely focused on path creation and new industry development, and less so restructuring of existing industry activity.
Thus, a multilevel approach to regional industry renewal is developed.
Furthermore, this is connected to the debates over the role of structure and agency in EEG. It is argued that EEG has generally ascribed power to structure over agency, but that recent conceptual and empirical works have granted agency (ascribed to the micro
level) a more prominent role in the evolution of economic systems. It is proposed that different actors, e.g., firms, industry clusters, and national policymakers, have different scopes and roles in the regional industry renewal processes, but that, importantly, agency resides not only at the micro level but also at the meso and macro levels. The connotation of this argument is for instance that the agency of cluster facilitation can play an important role in regional industry renewal. This is referred to as ‘system agency’, because deliberate actors can play a role in changing structural frameworks, e.g., through changing national regulations or regional innovation policy, and that they, in
turn, can influence the practices of other (regional) actors.
These issues are explored based on seven papers, each of which used qualitative methodology. The papers contribute with theoretical and empirical insights on the role of agency and multilevel dynamics in regional industry renewal. The empirical work described in these papers focused on the Bergen region in western Norway. Based on
this work, the Bergen region is argued to be characterized by beneficial multilevel dynamics as a result of strong firms and research and development organizations, and an industry structure characterized by related and diversified activities. Furthermore, policy has arguably played an important role in contributing to regional industry renewal
in the Bergen region, inter alia through RIS development. In addition, the region is also characterized by a largely positive interweaving in global knowledge flow and trade, and several leading firms operate in the region. Thus, the Bergen region serves well as a case study illustrating the theoretical and conceptual approaches developed in this dissertation.
... . the embeddedness of evolutionary processes in multilevel governance settings The systemic approach in many evolutionary approaches corresponds with considerations of complex linkages between system elements along different scales. Dopfer et al. (2004) distinguished between processes on a micro-, meso-and macro-level corresponding with processes and decisions by individuals or single organizations (micro), communities of agents or organizations (meso) and larger private or public authorities (macro; see for an application of this concept Schröder, 2011). Within political settings, the interplay between activities on local, regional, national and supranational levels as well as between decisions, initiatives and measures on political and private levels have to be considered (see also Conzelmann, 2008). ...
Reindustrialization has become a major political objective in the European Union. This paper provides three urban case studies on reindustrialization pathways and experiences during the global economic crisis to reveal the specificities of place-based approaches on the local level despite common policies on EU, federal and state levels. Moreover, the evolutionary perspective on reindustrialization and economic resilience shows the importance of adaptive capabilities on the local level, although the sources for these capabilities differ according to context- and place-specific structures.
Looking for a unified agenda
What is the agenda and scope of evolutionary economic geography (EEG)? In particular, what is the role that the disciplines of geography and economics can, or should, play in such an—arguably common—program? While efforts to answer these questions have been made in EEG (Boschma and Martin, 2007, 2010; Kogler, 2017), there is no comparable effort aimed at clarifying the issue in the camp of evolutionary economics (EE). This article seeks to shed some light on the relationship between EEG and EE in general and the role that EE may play in a common program in particular.
Notwithstanding conceivable dissent, geographers and economists should share a common subject: the study of geographic space in an evolving economy. There may be differing views concerning how to approach the shared subject matter, what themes and topics are pertinent or what theoretical approaches or methodological tools to apply. Dissenting views of this kind relate to a joint project. They do not indicate a schism, but rather confirm the mutual endeavour of the students of the two disciplines. EEG is a garden with many flowers.
Cambridge Core - Entrepreneurship and Innovation - Modern Evolutionary Economics - by Richard R. Nelson
In diesem einführenden Beitrag werden zentrale Motive und Strukturelemente des Sammelbandes vorgestellt. Anhand von drei Themenstellungen – der Bestimmung eines inhaltlichen Resilienzziels, der Zeitebene zur Feststellung von Resilienz und der Voraussetzungen zur Entwicklung von Handlungsempfehlungen – werden offene Forschungsfragen und Unschärfen vorgestellt, um die besonderen Potentiale einer multi- und interdisziplinären Beschäftigung mit dem Thema „Resilienz“ zu unterstreichen. Dies leitet zum Abschluss des Beitrags zu einer Übersicht über die Anordnung der Einzelbeiträge in diesem Sammelband über.
This introductory paper looks at recent debates on the concept of regional economic resilience and focuses on three elements of debate: (1) indicator systems and consideration of the normative content of the concept; (2) the evolutionary dimension of the concept and its inter-disciplinary linkages; (3) the policy dimension and challenges for the development of policy recommendations. The author discusses the state of the debate and presents some directions for future research priorities.
Zusammenfassung
Dieser einführende Artikel betrachtet aktuelle Debatten über das Konzept regionaler ökonomischer Resilienz und konzentriert sich auf drei Aspekte dieser Debatte: 1) Indikatorensysteme und der normative Gehalt des Konzepts; 2) die evolutionäre Dimension des Konzepts und ihre interdisziplinäre Verknüpfung; 3) die politische Dimension und Herausforderungen einer Entwicklung von Politikempfehlungen. Der Autor diskutiert den Stand der Forschung innerhalb der Debatten und präsentiert einige Ausrichtungen für zukünftige Forschungsschwerpunkte.
Building on the ontology of evolutionary realism recently proposed by Dopfer and Potts (forthcoming), we develop an analytical framework for evolutionary economics with a micro-meso-macro architecture. The motive for reconception is to make clear the highly complex and emergent nature of existence and change in economic evolution. For us, the central insight is that an economic system is a population of rules, a structure of rules, and a process of rules. The economic system is a rule-system contained in what we call the meso. From the evolutionary perspective, one cannot directly sum micro into macro. Instead, we conceive of an economic system as a set of meso units, where each meso consists of a rule and its population of actualizations. The proper analytical structure of evolutionary economics is in terms of micro-meso-macro. Micro refers to the individual carriers of rules and the systems they organize, and macro consists of the population structure of systems of meso. Micro structure is between the elements of the meso, and macro structure is between meso elements. The upshot is an ontologically coherent framework for analysis of economic evolution as change in the meso domain - in the form of what we call a meso trajectory - and a way of understanding the micro-processes and macro-consequences involved. We believe that the micro-meso-macro analytical framework can greatly enhance the focus, clarity, and, ultimately, power, of evolutionary economic theory. Copyright Springer-Verlag Berlin/Heidelberg 2004
The last two decades have seen an explosion of research in economics inspired by evolutionary thinking. There has been an upsurge in the number of publications addressing evolutionary themes, paralleled by the foundation of new journals and new academic societies devoted to the subject matter. Heterodox contributions in themselves do not yet signal any extraordinary event; in fact, the ongoing challenge of the received view is part and parcel of the theoretical discourse of any ‘normal’ science. What gives the recent advances in this field – grouped loosely under the heading ‘evolutionary economics’ – their distinct hallmark are the rapid pace and persistent power of the underlying intellectual dynamic. The 1982 book by Richard Nelson and Sydney Winter on An Evolutionary Theory of Economic Change has served as an ice-breaker that arguably gave the early process its critical momentum. In their contributions to this volume, these authors address one of the core issues of evolutionary economics: The change of economic knowledge as it applies to technology and production. What are the factors that may conceivably account for the present dynamism of evolutionary economics? We get a first hint when we consider that, in their field of study, orthodox economists encounter decreasing marginal returns with respect to new theoretical findings per additional unit of research effort or research time.
The aim of dynamic capabilities research is ambitious: to understand how firmscan sustain a competitive advantage by responding to and creating environmen-tal change (Teece, 2007). As one of the most central and difficult questionswithin the strategy domain, this might well be characterized as the Holy Grailof strategic management. The topical domain of dynamic capabilities, in conse-quence, is as broad and as complex as any in the field. It spans the domains ofstrategy process and content, and involves multiple levels of analysis, from man-agerial decision-processes, to organizational routines, to competitive inter-actions and environmental change. The complexity of the topic is matched,fittingly, by the complexity of the theoretical underpinnings. Undoubtedly, thishas generated some confusion. It is therefore not surprising that the critique ofArend and Bromiley (A&B) in the preceding essay reflects some of this confu-sion. Here, we address this by clarifying the dynamic capabilities concept, inrelation to its development and the challenges faced.We first survey the development path of dynamic capabilities research, anddiscuss the different theoretical bases of this emerging area of scholarship. Thenwe clarify issues regarding the definition of dynamic capabilities and discuss thelink between dynamic capabilities and firm performance. As part of our analy-sis, we address the two main conclusions of A&B regarding dynamic capabil-ities research. The first is that we should abandon the dynamic capabilitiesapproach if it does not ‘quickly develop a theoretical foundation’. The second isthat regardless of the pace of theory development, we should replace theseefforts with ‘work on strategic change tied to fuller theories of strategic organ-ization’. In what follows, we explain why these conclusions are premature andunwarranted. We also address other issues raised by A&B, focusing on the mainissues raised in the body of their commentary.
Defining ordinary or ‘zero-level’ capabilities as those that permit a firm to ‘make a living’ in the short term, one can define dynamic capabilities as those that operate to extend, modify or create ordinary capabilities. Logically, one can then proceed to elaborate a hierarchy of higher-order capabilities. However, it is argued here that the strategic substance of capabilities involves patterning of activity, and that costly investments are typically required to create and sustain such patterning—for example, in product development. Firms can accomplish change without reliance on dynamic capability, by means here termed ‘ad hoc problem solving.’ Whether higher-order capabilities are created or not depends on the costs and benefits of the investments relative to ad hoc problem solving, and so does the ‘level of the game’ at which strategic competition effectively occurs. Copyright © 2003 John Wiley & Sons, Ltd.
This article aims to show how processes of knowledge development and their institutional underpinnings make up the core of evolutionary economic geography. We argue that micro level concepts—notably innovation, selection and retention—provide insights that can be helpful also when investigating evolutionary processes of knowledge creation at the aggregate levels of cities, regions or nations. We investigate the linkage between drivers, mechanisms and barriers to knowledge creation and acquisition at the micro-level, and the development over time and across spatial settings of higher-order phenomena of localized institutions and other capabilities. We apply this distinction on the analysis of the rise, growth, decline and possible rejuvenation of spatial clusters of similar and complementary economic activity.
Within the evolutionary economic geography framework, the role of institutions deserves more explicit attention. We argue that territorial institutions are to be viewed as orthogonal to organizational routines since each territory is characterized by a variety of routines and a single firm can apply its routines in different territorial contexts. It is therefore meaningful to distinguish between institutional economic geography and evolutionary economic geography as their "explanans" is different. Yet the two approaches can be combined in a dynamic framework in which institutions coevolve with organizational routines, particularly in emerging industries. Furthermore, integrating the evolutionary and institutional approach allows one to analyze the spatial diffusion of organizational routines that mediate conflicts among social groups, in particular, those between employers and employees. An evolutionary economic geography advocates an empirical research program, both qualitative and quantitative, that can address the relative importance of organizational routines and territorial institutions for regional development. Copyright (c) 2009 Clark University.
Following last decade’s programmatic papers on Evolutionary Economic Geography, we report on recent empirical advances and
how this empirical work can be positioned vis-à-vis other strands of research in economic geography. First, we review studies
on the path dependent nature of clustering, and how the evolutionary perspective relates to that of New Economic Geography.
Second, we discuss research on agglomeration externalities in Regional Science, and how Evolutionary Economic Geography contributed
to this literature with the concepts of cognitive proximity and related variety. Third, we go into the role of institutions
in Evolutionary Economic Geography, and we relate this to the way Institutional Economic Geography tends to view institutions.
From this discussion, a number of new research challenges are derived.
In this article, the goal is to offer a new research agenda for evolutionary macroeconomics. The article commences with a
broad review of the main ideas in the history of thought concerning the determinants of economic growth and an introduction
to the evolutionary perspective. This is followed by a selective review of recent evolutionary approaches to macroeconomics.
These approaches are found to be somewhat disconnected. It is argued that the ‘micro-meso-macro’ approach to economic evolution
is capable of resolving this problem by offering an analytical framework in which macroeconomics can be built upon ‘meso-foundations’,
not micro-foundations, as asserted in the mainstream. It is also stressed that the economic system and its components are
complex adaptive systems and that this complexity must not be assumed away through the imposition of simplistic assumptions
made for analytical convenience. It is explained that complex economic systems are, at base, energetic in character but differ
from biological complex systems in the way that they collect, store and apply knowledge. It is argued that a focus upon stocks
and flows of energy and knowledge in complex economic systems can yield an appropriate analytical framework for macroeconomics.
It is explained how such a framework can be connected with key insights of both Schumpeter and Keynes that have been eliminated
in modern macroeconomics. A macroeconomic framework that cannot be operationalized empirically is of limited usefulness so,
in the last part of the article, an appropriate methodology for evolutionary macroeconomics is discussed.
KeywordsComplex system–Dissipative structure–Economic evolution–Economic growth–Energy–Knowledge–Macroeconomics–Micro-meso-macro–Economic methodology–Agent-based modelling
This paper investigates the mechanisms through which organizations develop dynamic capabilities, defined as routinized activities directed to the development and adaptation of operating routines. It addresses the role of (1) experience accumulation, (2) knowledge articulation, and (3) knowledge codification processes in the evolution of dynamic, as well as operational, routines. The argument is made that dynamic capabilities are shaped by the coevolution of these learning mechanisms. At any point in time, firms adopt a mix of learning behaviors constituted by a semiautomatic accumulation of experience and by deliberate investments in knowledge articulation and codification activities. The relative effectiveness of these capability-building mechanisms is analyzed here as contingent upon selected features of the task to be learned, such as its frequency, homogeneity, and degree of causal ambiguity. Testable hypotheses about these effects are derived. Somewhat counterintuitive implications of the analysis include the relatively superior effectiveness of highly deliberate learning processes such as knowledge codification at lower levels of frequency and homogeneity of the organizational task, in contrast with common managerial practice.
The concept of path dependence is being used in highly deterministic ways in neo-institutionalist analysis, so that studies using this framework have difficulty in accounting for, or predicting, change. However, the original Polya urn model from which path-dependence theory draws predicts that alternative paths will be possible. It can then be argued that actors will be able to use these when they perceive a need to change. This article seeks to capture this possibility through accommodating a Bayesian parametric decision-maker interacting with an environment. This makes it possible to examine how change may involve such processes as: the use of past or redundant institutional repertoires; transfer of experience across action spaces; or from other agents, through networks of structured relationships; the emergence of perceived 'one best' solutions. This approach points to the need to change how typologies are used in neo-institutionalist research, so that those features of cases that do not fit the pre-conceived framework of a type are not disregarded as 'noise', but properly evaluated as potential resources for change.
What does the economic in economic geography stand for? For much of the 1990s up to the more recent past, answers to this pertinent question frequently referred to the embeddedness-network paradigm of the new economic sociology. At the same time, economic geography more and more drew inspiration, metaphors, and practices from an increasingly diverse range of schools. In terms of the disciplinary orientation, economic geography, on the one hand, remains firmly engaged with sociology, although interest seems to expand from the Granovetterian paradigm to the poststructuralism of Latour and Callon. On the other hand, economic geography's interest in heterodox economic geography is gaining new momentum. Above all, evolutionary approaches have attracted considerable attention that most recently culminated in a range of programmatic statements to develop a distinct evolutionary economic geography. It is these attempts to develop a collective agenda that Danny MacKinnon, Andrew Cumbers, Andy Pike, Kean Birch, and Robert McMaster take issue with. Subsequently, Ron Boschma and Koen Frenken, Jürgen Essletzbichler, and Geoffrey Hodgson comment on this "sympathetic critique." A rejoinder by Andy Pike and his coauthors concludes this symposium. Copyright (c) 2009 Clark University.
Economic geographers have recently been confronted with attempts to constitute both relational and evolutionary economic geography. The two proposed paradigms have much in common, such as the perception of space as being socially constructed instead of a pre-given entity with causal powers. Until now, however, astonishingly little has been written about the differences between these proposed paradigms. By comparatively focussing on three research issues, the paper concludes that the conceptual differences are rather subtle and that the relational approach seems to include a wider and therefore, more unspecific perspective to explain the distribution of economic activities over space.
The first book to chart the development of the field of evolutionary economics, this book provides an integrated generic framework to define the rules of an economic system; how they are coordinated and the causes and consequences of their change. Packed with pedagogical features including essay and tutorial questions, case studies and an extensive bibliography, this book: proposes a new analytic framework for the study of the nature and causes of long run economic growth and development in market systems, analyzes the foundations of the neoclassical tradition, before developing a thesis through micro, meso and macro domains drawing conclusions as to what can be learned from the point of view of policy analysis, focuses on an open-systems analytical framework and successfully formulates and refines the analytical foundations of a new general theory of economic evolution. This volume is essential reading for scholars and students of economic evolution and as well as for anyone who seeks to better understand the complex evolutionary nature of the structure and dynamics of the knowledge-based economy in today's society.
The economic system is not ultimately made of resources, but of institutions. And because economic systems differ in their institutions, their comparative performance can be (partially) explained by these differences. Moreover, institutional differences are the outcome of an evolutionary process, implying that as institutions evolve, so do economic systems. Institutional significance, institutional difference, and the causal connection to economic growth and development are all therefore central to the revival of Veblenian institutional economics (Brette 2006; Hodgson 2007). Yet, this will require more than just a refurbishment of "original" institutional economics with new micro insights from evolutionary psychology, experimental and behavioral economics, complexity theory, replicator dynamics, and game theory. Why? Because as Brette and Mehier (2005) also argue, it is better to begin with a general theory of economic evolution and locate institutions within this, than to start with institutions and derive a theory of the economy. Toward this end, I propose an evolutionary theory of economic institutions derived from the rule-based analytic framework of micro meso macro recently developed by Dopfer, Foster and Potts (2004); Dopfer (2005); and Dopfer and Potts (2004; 2007). In this framework, an institution is defined as a stable (meso) rule population as the outcome of a (meso) trajectory. The central analytic implication of the evolutionary theory of institutions is that an institution is essentially a meso - not a micro or macro - concept. A meso-centered theory of institutions may provide, in this view, a useful map of the various schools of institutional economics in terms of the different aspects of the meso unit they represent. ©2007, Journal of Economic Issues
In contrast to the dominant transition framework that examines organizational forms in Eastern Europe according to the degree to which they conform to, or depart from the blueprints of already existing capitalisms, this paper examines the innovative character, born of necessity, in which actors in the postsocialist setting are restructuring by redefining and recombining resources. Instead of conceiving these recombinations as accidental aberrations, it explores their evolutionary potentials. Its starting premise is that the actual unit of entrepreneurship is not the isolated individual personality but the social networks that link firms and the actors within them. Drawing on recent developments in evolutionary theory, it cautions that although all-encompassing privatization and marketization might foster adaptation in the short run, the consequent loss ot organizational diversity will impede adaptability in the long run.
This article attempts to explore how key notions from Evolutionary Economics, such as selection, path-dependency, chance and increasing returns, may be applied to two key topics in Economic Geography. The first issue is the problem of how to specify the (potential) impact of the spatial environment on new variety in terms of technological change. Evolutionary thinking may be useful to describe and explain: (1) the process of localized `collective' learning in a regional context, (2) the adjustment problems that regions may be confronted with in a world of increasing variation, and (3) the spatial formation of newly emerging industries as an evolutionary process, in which the spatial connotation of increasing returns (that is, agglomeration economies) may result in a spatial lock-in. The second issue is the problem of how new variety may affect the long-term evolution of the spatial system. We distinguish three approaches that, each in a different way, apply evolutionary notions to the nature of spatial evolution. This is strongly related to the issue whether mechanisms of chance and increasing returns, rather than selection and path-dependency, lay at the root of the spatial evolution of new technology.
Like Nelson (2002), I make a case for bringing institutions into evolutionary economics. But unlike Nelson, who defines institutions as social technologies consisting of rules-routines, I define them in agreement with North (1990) as humanly devised rules-constraints - such as formal law and informal social norms - but also view them, to accommodate most of Nelson's approach, as constraining the variety of rules-routines employable by agents. I show that this definition has advantages for communicating with modern institutional analysis, for clarifying how institutions can influence, and be influenced by, changes in physical and social technologies, and for producing policy implications. Copyright Springer Verlag Berlin/Heidelberg 2003
In recent years, economic geographers have seized on the concepts of 'path dependence' and 'lock-in' as key ingredients in constructing an evolutionary approach to their subject. However, they have tended to invoke these notions without proper examination of the ongoing discussion and debate devoted to them within evolutionary economics and elsewhere. Our aim in this paper, therefore, is, first, to highlight some of the unresolved issues that surround these concepts, and, second, to explore their usefulness for understanding the evolution of the economic landscape and the process of regional development. We argue that in many important aspects, path dependence and 'lock-in' are place-dependent processes, and as such require geographical explanation. However, the precise meaning of regional 'lock-in', we contend, is unclear, and little is known about why it is that some regional economies become locked into development paths that lose dynamism, whilst other regional economies seem able to avoid this danger and in effect are able to 'reinvent' themselves through successive new paths or phases of development. The issue of regional path creation is thus equally important, but has been rarely discussed. We conclude that whilst path dependence is an important feature of the economic landscape, the concept requires further elaboration if it is to function as a core notion in an evolutionary economic geography. Copyright 2006, Oxford University Press.
The paper explains the commonalities and differences between neoclassical, institutional and evolutionary approaches that
have been influential in economic geography during the last couple of decades. By separating the three approaches in terms
of theoretical content and research methodology, we can appreciate both the commonalities and differences between the three
approaches. It is also apparent that innovative theorizing currently occurs at the interface between neoclassical and evolutionary
theory (especially in modelling) and at the interface between institutional and evolutionary theory (especially in ‘appreciative
theorizing’). Taken together, we argue that Evolutionary Economic Geography is an emerging paradigm in economic geography,
yet does so without isolating itself from developments in other theoretical approaches.
We consider the microfoundations controversy from the perspective of economic evolution. Although the analogy between biology and economics has been noted before, it has rarely focused on clarifying the micro--macro distinction in economic theory and modelling. The micro--macro debate is more developed in biology than in economics owing to a greater degree of specialisation and a greater degree of interaction between various sub-disciplines. The task for economists is to distinguish between insights directly relevant for economic theory and ones that hinge on unique features of biological systems. We argue that both micro and macro processes drive economic change and that macroeconomic change cannot be explained by microlevel optimising alone. We show that debates in biology about group selection and punctuated equilibria are relevant to understanding economic evolution. The opposition of reductionism and holism is of little use and, in its place, a hierarchical approach is proposed. This allows for both upward and downward causation and interaction between levels. Copyright 2003, Oxford University Press.
Thus far, most of the work towards the construction of an evolutionary economic geography has drawn upon a particular version
of evolutionary economics, namely the Nelson-Winter framework, which blends Darwinian concepts and metaphors (especially variety,
selection, novelty and inheritance) and elements of a behavioural theory of the firm. Much less attention has been directed
to an alternative conception based on complexity theory, yet in recent years complexity theory has increasingly been concerned
with the general attributes of evolutionary natural and social systems. In this article we explore the idea of the economic
landscape as a complex adaptive system. We identify several key notions of what is being called the new ‘complexity economics’,
and examine whether and in what ways these can be used to help inform an evolutionary perspective for understanding the uneven
development and adaptive transformation of the economic landscape.
Evolutionary approaches in economics have gathered increasing support over the last 25 years. Despite an impressive body of
literature, economists are still far from formulating a coherent research paradigm. The multitude of approaches in evolutionary
economics poses problems for the development of an evolutionary economic geography. For the most part, evolutionary economic
geography imports selective concepts from evolutionary biology and economics and applies those concepts to specific problems
within economic geography. We discuss a number of problems with this approach and suggest that a more powerful and appealing
alternative requires the development of theoretically consistent models of evolutionary processes. This article outlines the
contours of an evolutionary model of economic dynamics where economic agents are located in different geographical spaces.
We seek to show how competition between those agents, based on the core evolutionary principles of variety, selection and
retention, may produce distinct economic regions sharing properties that differentiate them from competitors elsewhere. These
arguments are extended to illustrate how the emergent properties of economic agents and places co-evolve and lead to different
trajectories of economic development over space.
The paper is concerned with spatial clustering of economic activity and its relation to the spatiality of knowledge creation in various sorts of interactive learning processes. It questions the merit of the prevailing explanatory model where the realm of tacit knowledge transfer is confined to local milieus whereas codified knowledge may roam the globe almost frictionless. When doing so the paper highlights the conditions under which both tacit and codified knowledge can be exchanged locally and globally. A distinction is made between, on the one hand, the learning processes taking place among actors embedded in a community by just being there - dubbed buzz - and, on the other, the knowledge attained by investing in building channels of communication - called pipelines - to selected providers located outside the local milieu. It is argued, that the co-existence of high levels of buzz and many pipelines may provide firms located in outward looking and lively clusters with a string of particular advantages not available to outsiders. Finally, some prescriptive elements, stemming from the argument, are identified.
In recent years, economic geographers have seized on the concepts of `path dependence' and `lock-in' as key ingredients in constructing an evolutionary approach to their subject. However, they have tended to invoke these notions without proper examination of the ongoing discussion and debate devoted to them within evolutionary economics and elsewhere. Our aim in this paper, therefore, is, first, to highlight some of the unresolved issues that surround these concepts, and, second, to explore their usefulness for understanding the evolution of the economic landscape and the process of regional development. We argue that in many important aspects, path dependence and `lock-in' are place-dependent processes, and as such require geographical explanation. However, the precise meaning of regional `lock-in', we contend, is unclear, and little is known about why it is that some regional economies become locked into development paths that lose dynamism, whilst other regional economies seem able to avoid this danger and in effect are able to `reinvent' themselves through successive new paths or phases of development. The issue of regional path creation is thus equally important, but has been rarely discussed. We conclude that whilst path dependence is an important feature of the economic landscape, the concept requires further elaboration if it is to function as a core notion in an evolutionary economic geography.
This paper focuses on dynamic capabilities and, more generally, the resource-based view of the firm. We argue that dynamic capabilities are a set of specific and identifiable processes such as product development, strategic decision making, and alliancing. They are neither vague nor tautological. Although dynamic capabilities are idiosyncratic in their details and path dependent in their emergence, they have significant commonalities across firms (popularly termed 'best practice'). This suggests that they are more homogeneous, fungible, equifinal and substitutable than is usually assumed. In moderately dynamic markets, dynamic capabilities resemble the traditional conception of routines. They are detailed, analytic stable processes with predictable outcomes. In contrast, in high-velocity markets, they are simple, highly experiential and fragile processes with unpredictable outcomes. Finally, well-known learning mechanisms guide the evolution of dynamic capabilities. In moderately dynamic markets, the evolutionary emphasis is on variation. In high-velocity markets, it is on selection. At the level of REV, we conclude that traditional REV misidentifies the locus of long-term competitive advantage in dynamic markers, overemphasizes the strategic logic of leverage, and reaches a boundary condition in high-velocity markets. Copyright (C) 2000 John Wiley & Sons, Ltd.
The paper discusses different theoretical approaches towards the explanation of regional development paths in transition economies. These approaches are integrated into a conceptional framework that serves as basis for the analysis of the restructuring of the microelectronics industry in Dresden, Saxony, during transformation from a socialist planning economy into a market economy. The paper aims to identify the processes and actors of the transformation process, to analyse the way which these processes are interconnected and to discuss them in the context of the theoretical concept.
From a focus on technological change, this article deals with the issue of how to systematically study regional restructuration. The article aims to study regional restructuration as a case of general economic transformation in an evolutionary economics perspective. However, such open-ended types of analyses are inherently complex. In order to remediate the difficulties of empirical studies and to allow for a more structured comparison of different frame-works, the article outlines and applies a ‘research tool’ to the specific issue of regional restructuration. While such a tool is not a framework, it is intended to more readily compare different theories and frameworks with empirical studies.
The tool treats change as involving novelty, renewal and destruction of actors and activities. These changes take place across four different dimensions: technology, organizations, interactions and economic value. The article ‘tests’ the tool by analysing three case-studies of regional restructuration at the municipality and country levels. The issue under scrutiny is how the restructuring of regional industries and technologies takes place, especially as linked to the emergence of new technologies. There are two cases of information technology in West Sweden and one case of biotechnology in Sweden.
Three issues relating to the empirical findings are discussed. (1) The tool can help to structure empirical material to analyse complex processes of change over time. This is illustrated, for example, by the changes across dimensions of what is internal and external to regional restructuration. (2) The processes of technological development and of economic exploitation overlap but are differentiated from each other. Hence, a clearer distinction is needed between technology concepts and economic concepts such as ‘products’, ‘industries’, ‘economic growth’ and ‘regional development’. (3) In emerging technologies, there is clear evidence of the interdependencies between new, old and exit during regional restructuration. These three concluding remarks highlight the need for additional research to link empirical material to theoretical considerations of evolutionary processes.
The dynamic capabilities framework analyzes the sources and methods of wealth creation and capture by private enterprise firms operating in environments of rapid technological change. The competitive advantage of firms is seen as resting on distinctive processes (ways of coordinating and combining), shaped by the firm's (specific) asset positions (such as the firm's portfolio of difftcult-to- trade knowledge assets and complementary assets), and the evolution path(s) it has aflopted or inherited. The importance of path dependencies is amplified where conditions of increasing retums exist. Whether and how a firm's competitive advantage is eroded depends on the stability of market demand, and the ease of replicability (expanding intemally) and imitatability (replication by competitors). If correct, the framework suggests that private wealth creation in regimes of rapid technological change depends in large measure on honing intemal technological, organizational, and managerial processes inside the firm. In short, identifying new opportunities and organizing effectively and efficiently to embrace them are generally more fundamental to private wealth creation than is strategizing, if by strategizing one means engaging in business conduct that keeps competitors off balance, raises rival's costs, and excludes new entrants. © 1997 by John Wiley & Sons, Ltd.
This article develops a model of regional development that is then used to examine the evolution of two media industries in Leipzig, Germany. We note that the city's current media cluster, centered on television/film production and interactive digital media, shares little in common with the city's once-premier book publishing media cluster. Treating interactive learning as the primary causal mechanism that drives economic growth and change, our conceptual framework incorporates both sectoral/technological and political crises as mechanisms that rupture regional development paths. These regional development paths are not homogeneous, but instead consist of bundles of various technological trajectories. Regions recover from crises as their actors continually rebundle local assets until they find a combination that generates growth. As a result of these crises, new opportunities for growth may arise for new and previously marginal industries. In turn, these expanding industries shape the region's development path.
This paper contributes to the clarification of the link between operational (how you earn your living) capabilities and dynamic (how you change your operational routines) capabilities. In doing so, the article builds on a knowledge management (KM) perspective to capture KM processes behind the development and utilization of dynamic capabilities and to examine their impact on operational capabilities. Empirical evidence is provided by performing survey research with a sample of 107 firms in the information technology and communication industry in Spain. The article includes conclusions and practical steps for managers with an interest in KM practices supporting dynamic capabilities.
Seeks to present a better understanding of dynamic capabilities and the resource-based view of the firm. Dynamic capabilities are considered to be the "organizational and strategic routines by which firms achieve new resource configurations." Dynamic capabilities are identifiable and specific routines that can serve different purposes, including integrating resources, reconfiguring resources within firms, and guiding the gain and release of resources. Various examples such as the product development process and alliancing, are discussed. Commonalities related to effective dynamic capabilities can be seen across firms though this does not mean that these capabilities are exactly alike. The dynamism of the market can impact the sustainability of the dynamic capabilities and the causal ambiguity of these capabilities. Moderately dynamic markets see robust, grooved routine, while high velocity markets experience simple rules and real-knowledge creation. The evolution of these dynamic capabilities within a firm are unique but the firm's individual path is shaped by well-known learning mechanisms. Competitive advantage does not lie in the dynamic capabilities themselves but rather in the resource configurations that managers build using these dynamic capabilities. (SRD)
'Frenken has edited a volume that provides stimulating and wide-ranging information on the current state of evolutionary and spatial thought areas of economics. Its high standards and the variety of themes and methods that are represented make the volume excellently suited to encourage further reflection on the strengths and weaknesses of evolutionary economics from a geographic perspective, thereby contributing to the adoption of the evolutionary approach in economic geography.'
Economic geography has, over the past decade or so, drawn upon ideas from evolutionary economics in trying to understand processes of regional growth and change. Recently, some researchers have sought to delimit and develop an "evolutionary economic geography" (EEG), aiming to create a more systematic theoretical framework for research. This article provides a sympathetic critique and elaboration of this emergent EEG but takes issue with some aspects of its characterization in recent programmatic statements. While acknowledging that EEG is an evolving and pluralist project, we are concerned that the reliance on certain theoretical frameworks that are imported from evolutionary economics and complexity science threatens to isolate it from other approaches in economic geography, limiting the opportunities for cross-fertilization. In response, the article seeks to develop a social and pluralist conception of institutions and social agency in EEG, drawing upon the writings of leading institutional economists, and to link evolutionary concepts to political economy approaches, arguing that the evolution of the economic landscape must be related to processes of capital accumulation and uneven development. As such, we favor the use of evolutionary and institutional concepts within a geographical political economy approach, rather than the construction of some kind of theoretically separate EEG-evolution in economic geography, not an evolutionary economic geography. Copyright (c) 2009 Clark University.
This article argues that in its "canonical" form, the path dependence model, with its core concept of lock-in, affords a restrictive and narrowly applicable account of regional and local industrial evolution, an account moreover that is tied to problematic underpinnings based on equilibrist thinking. As such, the canonical path dependence model actually stresses continuity rather than change. The article explores recent developments in political science, in which there have been active attempts to rethink the application of path dependence to the evolution of institutions so as to emphasize change rather than continuity. These developments are used to argue for a rethinking of path dependence ideas in economic geography. Copyright (c) 2010 Clark University.
In this response to MacKinnon et al. (2009 ), I argue that the theoretical development of evolutionary economic geographies is necessary in order to evaluate its unique contribution to an understanding of the uneven development of the space economy; that the distinction between evolutionary and institutional economic geographies is overdrawn; that the neglect of class, power, and the state reflect empirical rather than theoretical shortcomings of the evolutionary approach; and that there is significant potential overlap between evolutionary and political economy approaches. Copyright (c) 2009 Clark University.
Rodríguez-Pose A. and Crescenzi R. Research and development, spillovers, innovation systems, and the genesis of regional growth in Europe. Regional Studies. Research on the impact of innovation on regional economic performance in Europe has fundamentally followed three approaches: (1) the analysis of the link between investment in research and development (R&D), patents, and economic growth; (2) the study of the existence and efficiency of regional innovation systems; and (3) the examination of the geographical diffusion of regional knowledge spillovers. These complementary approaches have, however, rarely been combined. Important operational and methodological barriers have thwarted any potential cross-fertilization. This paper tries to fill this gap in the literature by combining in one model R&D, spillovers, and innovation systems approaches. A multiple regression analysis is conducted for all regions of the group of 25 European Union countries (EU-25), including measures of R&D investment, proxies for regional innovation systems, and knowledge and socio-economic spillovers. This approach allows the discrimination between the influence of internal factors and external knowledge and institutional flows on regional economic growth. The empirical results highlight how the complex interaction between local and external research, on the one hand, with local and external socio-economic and institutional conditions, on the other, shapes the innovation capacity of every region. They also indicate the importance of proximity for the transmission of economically productive knowledge, as spillovers are affected by strong distance decay effects.
Rodríguez-Pose A. et Crescenzi R. R&D, retombées, systèmes d'innovation, et la genèse de la croissance régionale en Europe. Regional Studies. Les recherches sur l'impact de l'innovation sur les performances économiques régionales en Europe ont essentiellement suivi trois approches: (1) l'analyse du lien entre l'investissement dans la R&D, les brevets et la croissance économique; (2) l'étude de l'existence et de l'efficacité de systèmes régionaux d'innovation; et (3) l'examen de la diffusion géographique des retombées régionales du savoir. Ces approches complémentaires ont cependant été rarement combinées. D'importants obstacles opérationnels et méthodologiques ont contrecarré toute fertilisation croisée potentielle. Dans cet article, nous essayons de combler cette lacune dans la littérature en combinant dans un modèle unique les approches de type R&D, retombées et système d'innovation. Une analyse de régression multiple est menée pour toutes les régions de l'UE à 25, incluant les mesures pour l'investissement en R&D, les mandataires des systèmes d'innovation régionaux, et les retombées socio-économiques et du savoir. Cette approche nous permet de faire la distinction entre l'influence des facteurs internes et des flux externes de savoir et institutionnels sur la croissance économique régionale. Les résultats empiriques soulignent combien les interactions complexes entre la recherche locale et la recherche extérieure, d'un côté, et les conditions socio-économiques et institutionnelles locales et extérieures, de l'autre, façonnent la capacité d'innovation de chaque région. Ces résultats indiquent également l'importance de la proximité dans la transmission du savoir économiquement productif, les retombées étant affectées par les forts effets de dégradation qu'entraîne la distance.
Croissance économique Innovation R&D Savoir Retombées Systèmes d'innovation Régions Union Européenne
Rodríguez-Pose A. und Crescenzi R. F&E, Wissensübertragung, Innovationssysteme und die Entstehung von Regionalwachstum in Europa. Regional Studies. Bei der Erforschung der Auswirkung der regionalen Wirtschaftsleistung in Europa auf die Innovation wurden bisher in erster Linie drei Ansätze verfolgt: (1) die Analyse der Verknüpfung zwischen Investitionen in F&E, Patente und Wirtschaftswachstum, (2) die Erforschung der Existenz und Effizienz von regionalen Innovationssystemen und (3) die Untersuchung der geografischen Diffusion von regionaler Wissensübertragung. Diese Ansätze ergänzen einander, wurden jedoch bisher nur selten miteinander kombiniert. Eine potenzielle gegenseitige Befruchtung wurde durch wichtige operative und methodologische Hindernisse konterkariert. In diesem Beitrag versuchen wir diese Lücke in der Literatur zu schließen, indem wir die Ansätze für F&E, Wissensübertragung und Innovationssysteme in einem Modell kombinieren. Wir führen für alle EU-25-Regionen eine multiple Regressionsanalyse durch, die Messungen der F&E-Investitionen, Vertreter für regionale Innovationssysteme sowie Wissens- und sozioöonomische Übertragungen umfasst. Mit diesem Ansatz lässt sich zwischen dem Einfluss von internen Faktoren und externen Wissens- und Institutionsströmen auf das regionale Wirtschaftswachstum unterscheiden. Die empirischen Ergebnisse verdeutlichen, wie die komplexen Wechselwirkungen zwischen lokaler und externer Forschung einerseits und lokalen sowie externen sozioökonomischen und institutionellen Bedingungen andererseits die Innovationskapazität jeder Region prägen. Ebenso weisen sie auf die Bedeutung der Nähe für die Übertragung von wirtschaftlich produktivem Wissen hin, da die Wissensübertragung mit zunehmender Entfernung stark beeinträchtigt wird.
Wirtschaftswachstum Innovation F&E Wissen Wissensübertragung Innovationssysteme Regionen Europäische Union
Rodríguez-Pose A. y Crescenzi R. I + D, ‘spillovers’, sistemas de innovación y la génesis del crecimiento regional en Europa. Regional Studies. La investigación sobre el impacto de la innovación sobre el desempeño económico en Europa ha seguido fundamentalmente tres enfoques: (1) el análisis del vínculo entre la inversión en I + D, patentes y crecimiento económico; (2) el estudio de la existencia y eficacia de sistemas de innovación regionales y (3) el examen de la difusión geográfica del conocimiento (spillovers). A pesar de su complementariedad, estos enfoques apenas se han combinado. La presencia de barreras metodológicas y operacionales ha minado cualquier posibilidad de interacción. En este artículo nuestra intención es cubrir este hueco en la literatura, combinando en un modelo los enfoques basados I + D, spillovers y sistemas de innovación. Esto se realiza mediante un análisis de regresión múltiple que incluye variables de inversión en I + D, componentes de los sistemas de innovación regional y spillovers de conocimiento y de carácter socioeconómico. Este enfoque nos permite discriminar entre la influencia de los factores internos y los flujos externos de conocimiento e institucionales sobre el crecimiento económico. Los resultados empíricos subrayan cómo la interacción entre la investigación local y la realizada en otros espacios, por un lado, con las condiciones socioeconómicas e institucionales tanto en el ámbito local como en otras áreas, por otro, influye en la capacidad innovativa de cada región. Los resultados también ponen de manifiesto la importancia de la cercanía geográfica en la transmisión del conocimiento productivo, ya que la eficacia de los spillovers se ve fuertemente afectada por la distancia.
Crecimiento económico Innovación I + D Conocimiento Spillovers Sistemas de innovación regiones Unión Europea
This paper lays the methodological foundations of an analytical framework that may help shed some new light on the issue of territorial inequalities in the digital economy. It opposes the recent tendency to build up an evolutionary economic geography as an alternative not only to the so-called "New Economic Geography" (namely "geographical mainstream economics") but also to the institutional economic geography. The paper advocates the development of an evolutionary and institutional approach in economic geography, which would be meso-focused. Finally, it presents some insights that highlight the heuristic potential of this approach in reappraising the territorial features of the digital economy.
'With this important collection of fine new papers, Foster and Metcalfe have brought together another volume that will make an impact on the newly unfolding science-of-complexity approach to economics. Ranging from the theoretical foundations to modeling tools and concrete empirical applications, the contributions cover all relevant areas. The reader is being offered exciting new views on variety generating and selecting mechanisms in the economy and their role for technological and commercial change.' - Ulrich Witt, Max Planck Institute, Jena, Germany. Dedicated to the goal of furthering evolutionary economic analysis, this book provides a coherent scientific approach to deal with the real world of continual change in the economic system. © J. Stanley Metcalfe and John Foster, 2004. All rights reserved.
This paper uses a multidimensional cluster concept that views processes of knowledge creation as being decisive in explaining how clusters are established, why they grow and how they reproduce themselves. It is suggested that clusters can only create new knowledge and continue to grow if the cluster firms have linkages with external markets and employ a mix of local and non-local transactions. Local interaction or 'buzz' and interaction through global or trans-local I pipelines' create a dynamic process of knowledge creation which is the key to understanding a cluster's growth process. It is argued that the lack of a reflexive mechanism of local and trans-local interaction is the reason as to why the Leipzig media industry cluster has Stagnated in recent years after a decade of substantial growth. In this cluster, we are confronted with what is referred to as the 'distanced neighbour' paradox. Firms in the Leipzig media sector are neither characterized by strong pipelines to firms and markets outside the cluster nor do they engage in intensive local networking and interactive learning. The paper explores the conceptual foundations of this phenomenon and applies it to the case of Leipzig, Germany.
Classical economics was both evolutionary and institutional. With the rise of neoclassical economics, both the evolutionary and the institutional aspects were squeezed out of main line economic theory. The last quarter century has seen a rebirth of both traditions, but as minority intellectual positions, and to a considerable extent separate ones. This essay argues the need for a rejoining of evolutionary and institutional economics, and suggests a way to bring the two strands together in a coherent way.
Why Meso? Why and How the Meso Level Is the Aggregate Level Proper in Evolutionary Economics. A Note presented at the Research Workshop
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Meso Level Is the Aggregate Level Proper in
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Research Workshop "Evolutionary Economics".
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