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Local Systems’ Strategies Copying with Globalization: Collective Local Entrepreneurship

Abstract

The paper aims at investigating the possible trajectories of regional clusters (industrial districts or local systems) in order to depict feasible strategies to cope with globalization. Same relevant stylized facts on the new structure of global market are presented in order to illustrate the new competitive framework small- and medium-sized enterprises (SME) must face. The concept of “complete productive process” is introduced to characterize the special setting necessary for the survival of the regional systems of SME. A local cluster needs to coproduce values, capabilities and institutions: its very identity. Since local systems are essentially “cognitive systems”, they need to go global not as a single firm but as a system. To accomplish this difficult task, they must resort to a collective and cooperative behaviour. To fill this gap, we suggest the concept of “collective local entrepreneurship” as a reference point, a device to anchor the strategic pragmatism necessary to regional clusters to cope with globalization. The renewal of the local “ecosystems” within the international networks (at all different levels) appears to be a general objective. A strong public-private partnership emerges as a strategic commitment. In this perspective emerge the potential dynamics of the conclusive four evolutionary trajectories, which the regional clusters are called upon to deal with.

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Fig. 1

Notes

  1. 1.

    The concept of path dependency is also the starting point of the evolutionary theory of the firm (Nelson and Winter 1982).

  2. 2.

    The only possible innovations (and the majority of them) are incremental. This suggests some economic implications: the marginal rate of growth, which depends on the previous “radical innovations”, is decreasing and it is reaching its minimum point, meaning that the prospects of growth for economies, firms and individuals are far more constrained than 40 years ago. As established by Gordon (2012) in his recent study on the American growth slowdown, “the growth of productivity (output per hour) slowed markedly after 1970. While puzzling at the time, it seems increasingly clear that the one-time-only benefits of the Great Inventions and their spin-offs had occurred and could not happen again”. For a more optimistic scenario on the twenty-first century ICT big innovation, see Brynjolfsson and McAfee (2014).

  3. 3.

    Spender, in the attempt to define what knowledge is, underlines the theoretical contrast between positivism and pragmatism (Peirce, James and Dewey), who focus on a more immediate and less universal concept of knowledge. In fact, as Spender states: “Functional criteria replace logical tests, and the positivist presupposition of a logical, seamless and knowable universe is abandoned since no practice engages more than a fraction of the universe” (Spender 1996 p. 49).

  4. 4.

    “The switch to pragmatism replaces the positivist reality presumed mirrored in our perceptions with the local reality of our experience” (Spender 1996 p. 49); see also Maskell 2001.

  5. 5.

    The OECD Report highlights that “the determinants of innovation within firms are internal factors such as education, experience, and qualifications of the workforce alongside skills, training, cultural ethos and human resource tacit knowledge” (OECD p. 86).

  6. 6.

    On the conceptual distinctions of tacit-explicit knowledge, individual-group knowledge, knowledge-knowing and the many discussions about these issues, the contribution of Cook and Brown (2005) is particularly compelling.

  7. 7.

    The prototype models of this industrial policy in Germany are BioRegio and InnoRegio and many other programmes designed to enhance Innovative Regional Growth Poles, Interregional Alliances, High-Risk Research and, in general, the so-called “cluster based technology” (Dohse 2007 p.85). A detailed compilation of regional policies can be found in Lorenzen (2001).

  8. 8.

    Similar concerns are expressed in Amin (1993 pp.82–83): in tough times of globalization the necessity of the local system to keep his identity is checkmated by the logic of chasing the market advantages and “break up some segments of the local supply-chain … and disrupt the pre-existing local bounds based primarily on trust”.

  9. 9.

    For a review on this vast literature, see Belussi and Gottardi, Eds. (2000), Cook (2002), Pyke et al. (1990).

  10. 10.

    In other words, “producing doesn’t mean only transforming a set of inputs (data) into an output (finite product) according to specific technical procedures, in a precise time space, but it also means reproducing the requirements both physical and human from which the production process starts” (Becattini 1990, p. 28).

  11. 11.

    These two concepts—inter-collaboration and intra-collaboration—can be defined, respectively, as the human interaction between individuals with different corporate culture and with different special capabilities and as the human interaction between individuals with the same corporate culture and with different special capabilities. Special capabilities are an example of those capabilities tacit knowledge-related, that is, those associated with experience (Spender 1996, p. 50).

  12. 12.

    For a review of the many successful cases of a proactive role of governments in innovation-growth development of East Asian countries, see Wade (1988), Keesing (1988).

  13. 13.

    It is important to underline that inter-organizational collaboration has a direct impact on intra-organizational collaboration and ultimately to firm’s performance; moreover, “collaboration is a result of human interactions which can be only supported by IT…. but not replaced” (Sanders 2007 p. 1343).

  14. 14.

    For a master defence of geography, “almost completely absent from the standard corpus of economic theory”, see P. Krugman 1997, p. VIII.

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Correspondence to Giovanni Covi.

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Covi, G. Local Systems’ Strategies Copying with Globalization: Collective Local Entrepreneurship. J Knowl Econ 7, 513–525 (2016). https://doi.org/10.1007/s13132-014-0225-4

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Keywords

  • Industrial clusters
  • Local government
  • Global value chain
  • Small- and medium-sized enterprises
  • Entrepreneurship policy
  • Internationalization