Environment and Planning C: Politics and Space

The aim of this paper is to discuss the role of various socioeconomic actors in the diffusion of knowledge in localised economies of small and medium sized economics SMEs. The ability of industrial districts to diffuse knowledge quickly and effectively is frequently mentioned as their major advantage, but the actual process has still to be explored. Issues such as the characteristics of localised economies and the relationship between information flow and knowledge diffusion are discussed. A sample of thirty entrepreneurs was contacted and interviewed in Kastoria, a major furcoat production area and Greece's only authentic industrial district. Major findings suggest that the information needs of SMEs have changed in favour of more external and formal information. The role of various local socioeconomic organisations is subsequently becoming more important in the diffusion and creation of knowledge. Policy implications include the creation of a regional network between all the local actors in the form of a discussion forum, the development of an information centre, the increased use of information technologies, the employment of a specialised workforce from outside the district, and the introduction of training programmes.

The role of entrepreneurship and small businesses in economic development has received particular attention in the postcommunist countries. Transition studies have recently emphasised the role that institutions play in orienting the entrepreneurial spirit toward capital formation, investment, export expansion, and generation of new jobs, and fair competition which will lead to sustainable economic growth. The author discusses the business-support infrastructure in Albania and the operational issues it faces. Interview data have been collected from various actors involved in the development of small and medium-sized enterprises in the country. The combination of the interview content with background information on each of the organisations has highlighted various issues such as the need for greater exposure of enterprises to business opportunities through the promotion of role-model businesses, the need to respond to the specific needs of enterprises in terms of skills and knowledge, and the need for a wider access through a better sectoral and regional coverage.

Doubts have been raised about the value of cluster-promotion policy given the lack of agreement over how clusters are identified. Such criticism overlooks how clusters are sometimes a mode of inquiry rather than a specific pattern of industrial location. The desire to promote business clusters is connected to a real phenomenon, but policy needs to acknowledge that exemplar clusters do not provide a role model for how other local economies may develop and that industry and market characteristics affect the significance of clustering. Efforts to promote business clusters in New Zealand show how the perceptions of cluster opportunities by business managers differ from those expected by policymakers. A review of twenty-five cluster initiatives identifies six ways that the projects question widespread opportunity to benefit from encouraging localised business collaboration: (1) value-chain division, (2) conditions on cooperation, (3) the need to go national, (4) facilitator dependence, (5) need for a leader, and (6) missing clusters. Policy intervention should be based on determining how best to work with groups of variable significance and character rather than being driven by idealised interpretations of cluster development.

This paper reports on a study that examined the relationship between a small winery cluster and the implementation of a government-sponsored Internet portal—the WinesOfGippsland.com site. Literature relating to industry clusters and Internet portals is examined to identify the beneficial features associated with portals and clusters. The paper makes a link between portal benefits and those typically associated with industry clusters, with the subsequent implications for policy. The study found that the winery business experience after portal implementation enhanced relationships between small wine producers, resulting in outcomes that included resource sharing, informal knowledge exchanges, and innovative practices that resulted in new product development. Indeed, these types of benefits tend also to be reported in successful clusters. Moreover, the authors argue that government policy may achieve more favourable outcomes in promoting e-commerce and Internet adoption in regional areas by identifying established business clusters (more so than ad hoc related groups) that can use their already established relationships quickly and appropriately to leverage the business benefits associated with new technologies.

The authors use international business strategy and regional development literature to inform a set of propositions about the links between direct employment by foreign-owned subsidiaries in the manufacturing sector and the development of embeddedness and autonomy in these subsidiaries. A large-scale survey of French, German, and US manufacturing subsidiaries in the United Kingdom is used to test the importance of embeddedness (host-country sourcing and use of networks) and autonomy (decisionmaking and operational autonomy) for the growth of employment by foreign-owned subsidiaries and the growth of skilled jobs in such subsidiaries. The results indicate that growth of embeddedness and autonomy factors are important, especially for the growth of skilled jobs, but those subsidiaries that have this attribute are a minority of foreign-owned subsidiaries. In the light of these results, the authors argue that policies need to be geared towards developing embeddedness and encouraging the growth of autonomy in subsidiaries that are likely to be regarded as central to the overall objectives of multinational corporations (MNCs). This requires policymakers to be aware of the internationalisation strategies used by MNCs, particularly in the light of the emergence of new, low-cost, countries which can easily provide high-quality but low-cost manufacturing operations. An important conclusion is that simple promotion of networking among firms and supporting agencies, and attempts to improve the local asset pool are unlikely to be effective in most cases.

The authors use the government-commissioned Lyons review proposals for the relocation of approximately 20 000 public sector jobs from London and the South East of England as a springboard for a historical analysis of civil service dispersal in Britain. Though civil service dispersal has helped ameliorate regional disparities, this has been a secondary objective of relocation programmes. The authors highlight the interconnections between public sector relocation and civil service (re)organisation. In the 1960s and 1970s, relocation formed part of a national programme to accommodate the geographical consequences of the hierarchical and spatially centralised public sector by relocating routine functions from the capital. Today, relocation is part of a coordinated programme of public sector reform which seeks to slim down the central headquarters of the civil service—so that only strategic aspects of policy and management are concentrated in London. In the Lyons review regional development is taken more seriously than in previous programmes of relocation; however, the links between the Lyons review and Gershon's review of public sector efficiency suggests that, in the short term at least, the primary emphasis remains on reducing costs and achieving efficiency savings.

The author explores the application of figurational sociology to developments in governance under New Labour. Expanding insights from the governmentality literature, he illustrates how individuals and communities are increasingly required to behave in ever more autonomous, self-realising, and self-managing ways—and how the expansion of partnership working as a way of disciplining communities around particular themes and issues is part of an ongoing process of governmentalisation exerting its influence on everyday life. Highlighting the wider figurational contingencies that hinder community attempts to attract mainstream resources through Local Strategic Partnerships, the author concludes by stressing the continued importance of developing inclusive governance structures.

Community involvement is seen both as means and as ends in contemporary urban policy, and although increasingly popular with policymakers it is not universally welcomed. Incredulous opponents assert that it does not improve the position of poor people and that it distracts attention from structural inequalities, whereas sceptical believers hold that it boosts social cohesion, and improves the position of powerless groups. The authors provide a framework for understanding these conflicting accounts of the processes and impact of community involvement in area-based initiatives (ABIs). They draw on a review of the relevant literature commissioned by the Home Office. The work is grounded in theories of democracy that claim both developmental and instrumental benefits for participants. A third rationale is found in ‘due process' claims for involvement as a fundamental right. This framework suggests that answering questions about what works in community involvement in ABIs requires an empirical focus on aims, processes, and effects. The evidence shows that believers are justified in being sceptical but optimistic, and that opponents will remain incredulous in the light of weaknesses in the practice and outcomes of community involvement in ABIs. The authors conclude by discussing the implications for policy and future research.