Emerging Clusters. Theoretical, Empirical and Political Perspectives on the Initial Stage of Cluster Evolution

This book offers an account of the ‘large patterns’ in the development of the world’s business systems, an integral and comparative perspective on rival explanations for these patterns (originating in different disciplines), and a range of analytical tools that can be used increasingly to study integrated international economic and social worlds. The author states the purpose of the book in its very first sentence: to help understand the economic, political and technological contexts in which international business operates. To achieve this, the materials (both theoretical and practical accounts) are examined through three different angles – ‘global’, ‘historical’ and ‘comparative’ – which determine the organization and structure of the text. The book comprises three parts, each of which addresses a range of sub-themes pertaining to each of the angles. The first part, ‘Causes of International Economic Integration’, deals with the rationale behind the existence of the multinational corporation (why do many businesses operate across national borders? ) and the international production network (why do businesses make everyday products out of parts sourced from several different countries? ), as well as the politics and economics of international business. Here, the author engages the reader in an absorbing narrative that branches into different strands of thinking. Starting from the internationalization of production and technological change, existing ideas for the openness of the state to the activities by multinational corporations follow: classical trade theory grounded in comparative advantage, increasing returns and international trade, the history of the politics of international trade with alternating episodes of free trade and protectionism from the mid-1800s onwards. Here the author also deals with ways in which states either interact to shape the international trading system (for example, voluntary union) or engage in conquering, leading to the formation of empires (and, later, retreat by de-engagement). The second part, ‘The Rise of Big Business’, traces in long-run perspective the accumulation of technology and development of organizational modes of production through several ‘revolutions’ and the rise of Fordism. The agenda here is to explain the formation of the modern corporation. The narrative takes the reader from a framework grounded in Kondratief ’s long waves of technological change model along the steel-based second industrial revolution, and theories centring on the role of big machines in generating big companies. Subsequently, a number of other themes are addressed: products consisting of interchangeable parts driving new modes of production; and new modes of regulation generating and maintaining the market conditions, requisite to converting family businesses into vertically integrated, strategically driven companies and at the same time transforming old industries and creating new ones. The third part, ‘Business Systems Today’, turns to the post-Fordist environment and focuses on the variation in business systems across the global economy. It first discusses the rise of flexible mass production and flexible specialization as forms of post-Fordism, the institutional configurations enabling these modes of organization and, the other side of the coin, the institutional impediments to their adoption into Fordist systems. From a consideration of actually existing American postFordism (marked by the continued importance of the large corporation, the polarization of the economy between the ‘knowledge economy’ and an economy of low-wage services, and, lastly, the transition in the control of corporations from managerial to financial) the author proceeds to discuss varieties of capitalism. These varieties may explain why countries produce internationally successful companies in some industries but not in others (compare Japan and the United States); here the author considers unique competitive advantages associated with specific institutional and governance arrangements. The discussion touches on how alternate national business systems produce quite divergent stakeholder strategies and decisions on a range of business aspects, including innovation propensity. The author also addresses ideas of divergence or convergence of production and business systems or the maintenance of difference. The latter is relevant as ‘emerging economies’ (notably the Asian Tigers) make significant inroads into the global economy while they are hardly grounded in an existing variety of capitalism (indeed, this has induced a debate on the political economy of the developmental state). Breaking with big theory constructs, organizational forms such as geographical clusters, industrial districts Regional Studies, Vol. 45.9, pp. 1287–1293, October 2011