Industry Location and Culture

Sylvianne Pilon at Université du Québec à Montréal (UQAM) has recently completed an interesting study that compares and contrasts the video game industries of Montreal, Lyon and Los Angeles and discusses the role of culture.

Among the conclusions:

The main conclusion of this research is that cultural relativism of urban regions may act as centripetal forces toward anchor firms, create a favorable context to the emergence of industrial districts, and act in their evolution. I also proposed that the relative importance of economic location factors, such as agglomeration economies and knowledge externalities from the agglomeration of related industries (e.i. information technology, digital animation, film, musique, television), from the pool of skilled and creative workforce in art and technology (the most significant location factor conducing to value creation in video games), and from institutional infrastructures may be seen as products of urban regions cultural relativism. First, because the economic location factors emerged from urban regions historicity: a significant cultural feature.  Second, the artisans of the urban region cultures act into the evolution of the relative importance of economic factors, and, therefore,  in the evolutionary patterns of industrial districts. 

Overall, these results show that a cultural perspective of the genesis and the evolution of industrial districts provides a better understanding - by going beyond economic location factors - of why industrial districts emerge in certain, not all, urban regions. I also believe that the cultural relativism of urban regions offers an additional and meaningful perspective to understanding why some urban regions are «cauldrons of creativity» (Florida, 2005, p. 159), and, therefore, why industrial development occurs, albeit in a selective pattern, despite the globalization of the economy.

The full paper (in French) is available here.

Sylvianne has written a short synopsis (in English) here.

posted by Kevin Stolarick

Different Firm Productivity

So, where does all that different firm productivity come from?  Why, from technology of course.  (It is the "canned" answer, but it does explain at least part of the difference.)  Both, me and my dissertation would argue that other innovations, including management skill, also plays an important role.

However, Stuart Elliot of the National Research Council’s Center for Education offers an interesting take on where the application of all this new technology is going to lead us....

To the displacement (nice way to say elimination) of 60% (yep, SIX-OH percent) of the current U.S. workforce (or at least the jobs they are doing).  In Projecting the Impact of Computers on Work in 2030, Elliot organized data on 93 of the 96 groups of occupations used in the Department of Labor’s Standard Occupational Classification system (information was not available for military-specific occupations). For each of these occupational groups, values were then provided on a seven-point scale for four types of skills: language, reasoning, vision and movement.

Using information about current artificial intelligence research and postulating on the exponential increase of computational processing power in the future, Elliot paints a picture of the functionality of computers in language, reasoning, vision and movement skills by 2030. As computers are able to complete certain tasks faster and more cheaply than humans, those tasks may shift from human performance to computer performance. For example, the study predicts that 90 percent of current office and administrative support occupations will be displaced by technology in this period. But not all occupations are expected to fair the same. Legal occupations, including lawyers, are only predicted to see 6 percent of their jobs displaced.

posted by Kevin Stolarick

New Report from NSF

In a recently released report, the National Science Foundation notes that

[T]he number of U.S. science and engineering (S&E) articles in major peer-reviewed journals flattened in the 1990s, after more than two decades of growth, but U.S. influence in world science and technology remains strong.  The report, Changing U.S. Output of Scientific Articles: 1988 - 2003, finds changes occurred despite continued increases in funding and personnel for research and development. Flattening occurred in nearly all U.S. research disciplines and types of institutions.  In contrast, emerging Asian nations had large increases in publication numbers, reflecting their growing expertise in science and technology. European Union totals also went up.

So, the U.S. is basically spending more to achieve exactly the same thing?

Related Websites
Changing U.S. Output of Scientific Articles: 1988–2003: http://www.nsf.gov/statistics/nsf07320/
The Changing Research and Publication Environment in American Research Universities: http://www.nsf.gov/statistics/srs07204/

posted by Kevin Stolarick

Results on Innovation: US vs. EU

In "The Geographical Processes behind Innovation: A Europe-United States Comparative Analysis " Riccardo Crescenzi, Andres Rodriguez-Pose, and Michael Storper look at the question of whether or not the spatial distribution of innovative factors can explain the "innovation gap" between the U.S. and Europe.

Among their findings:

The higher mobility of capital, population, and knowledge in the US not only promotes the agglomeration of research activity in specific areas of the country but also enables a variety of territorial mechanisms to fully exploit local innovative activities and (informational) synergies. In the European Union, in contrast, imperfect market integration, and institutional and cultural barriers across the continent prevent innovative agents from maximising the benefits from external economies and localised interactions, but compensatory forms of geographical process may be emerging in concert with further European integration.

(Full version of their academic working paper is available here.)

So, all these highly mobile Creative workers aren't just moving to find a better music scene and the ultimate tekka maki.  It turns out all that mobility helps to cross-pollenate the innovation process -- all the more reason that regional openness, tolerance, and low barriers to entry are important drivers to regional growth and prosperity.  (See Florida & Gates, "Technology and Tolerance:  The Importance of Diversity to High-Technology Growth" from 2001.)

posted by Kevin Stolarick

An Apple a Day...

The Economist has a short but insightful article about what other companies should be learning from Apple.

Their top four lessons include:

1. "Not Invented Here"  is very welcome.
2. Design around user needs and not the technology.
3. (Sometimes) you have to lead rather than listen to customers.
4. Fail wisely -- almost every Apple success follows a failure.

Full story here.

posted by Kevin Stolarick