Local Economies and Global Competitiveness

Also by Bruno Dallago YOUTH ENTREPRENEURSHIP AND LOCAL DEVELOPMENT IN CENTRAL AND EASTERN EUROPE REGIONAL DIVERSITY AND LOCAL DEVELOPMENT IN THE NEW MEMBER STATES

Local Economies and Global Competitiveness Edited by

Bruno Dallago and

Chiara Guglielmetti

Editorial and selection matter © Bruno Dallago and Chiara Guglielmetti 2010 Individual chapters © Contributors 2010 Softcover reprint of the hardcover 1st edition 2010 978-0-230-25272-1 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No portion of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, Saffron House, 6–10 Kirby Street, London EC1N 8TS. Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The authors have asserted their rights to be identified as the authors of this work in accordance with the Copyright, Designs and Patents Act 1988. First published 2010 by PALGRAVE MACMILLAN Palgrave Macmillan in the UK is an imprint of Macmillan Publishers Limited, registered in England, company number 785998, of Houndmills, Basingstoke, Hampshire RG21 6XS. Palgrave Macmillan in the US is a division of St Martin’s Press LLC, 175 Fifth Avenue, New York, NY 10010. Palgrave Macmillan is the global academic imprint of the above companies and has companies and representatives throughout the world. Palgrave® and Macmillan® are registered trademarks in the United States, the United Kingdom, Europe and other countries. ISBN 978-1-349-32236-7 DOI 10.1057/9780230294967

ISBN 978-0-230-29496-7 (eBook)

This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. Logging, pulping and manufacturing processes are expected to conform to the environmental regulations of the country of origin. A catalogue record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data Local economies and global competitiveness/edited by Bruno Dallago, Chiara Guglielmetti. p. cm. Includes bibliographical references and index. 1. Economic development. 2. Economic policy. 3. Strategic planning. 4. Competition. 5. Globalization—Economic aspects. I. Dallago, Bruno, 1950– II. Guglielmetti, Chiara. HD82.L53 2010 338.9—dc22 2010027502 10 9 8 7 6 5 4 3 2 1 19 18 17 16 15 14 13 12 11 10

Contents List of Tables, Figures and Maps

vii

List of Contributors

x

List of Abbreviations

xiii

Introduction: Local Economies and Global Competitiveness Bruno Dallago and Chiara Guglielmetti 1 Context and Proximity in Competitiveness and Cohesion: Theoretical and Empirical Challenges Chiara Guglielmetti Part I Territories, Development and Competitiveness

1

15 43

2 Globalization and Local Economic Growth in South Africa Wim Naudé, Waldo Krugell and Marianne Matthee

45

3 Provincial Systems of Innovation and Globalization in South Africa Mario Scerri

75

4 Institutional Approach in China’s Local Development: The Cases Studies of Jiangsu and Zhejiang Zhikai Wang

95

5 Cluster Development in Hungary: Searching for a ‘Critical Mass’ of Business via Cluster Mapping Miklós Szanyi, Ichiro Iwasaki, Péter Csizmadia, Miklós Illésy, and Csaba Makó 6 Local Government Corruption in Hungary Zoltán Szántó, István János Tóth and Tünde Cserpes 7 Cluster Identification, Firm Culture and Cooperation Activities in a European Metropolitan Region: The Case of Nuremberg Lutz Eigenhüller, Stefan Fuchs, Nicole Litzel and Joachim Möller 8 Beyond Commons: New Perspectives and Roles for Common Properties Alessandro Gretter, Ilaria Goio, and Geremia Gios v

113

134

154

175

vi

Contents

Part II Firms, Context and Proximity

191

9 Innovation Driven Growth: Analytical Issues and Policy Implications Pier Carlo Padoan

193

10 The Social Impact of Innovation at the Local Level: Microsoft Corporation and Grameen Bank Zoltan J. Acs, Connie L. McNeely and Joseph Sany

209

11 The Public Interest in Economic Development and Creativity: A Knowledge Governance Perspective Silvia Sacchetti and Roger Sugden

232

12 Global Sourcing and Business and Social Networks: Quality Heterogeneity and Firms’ Efficiency Giuseppe Vittucci Marzetti, Maria Luigia Segnana and Chiara Tomasi

242

13 Does Outsourcing Increase Labour Productivity? Evidence for a Local Production System in Emilia Romagna (Italy) Sandro Montresor, Davide Antonioli, Massimiliano Mazzanti and Paolo Pini

257

Index

280

List of Tables, Figures and Maps Tables 2.1

Sigma convergence in South Africa 1990–2000

54

2.2

Employment creation in South Africa’s cities, 1996 and 2001

64

3.1

Gross Geographic Product (GGP) for by province

84

3.2

Percentage contribution to industrial output by sector and province (2004)

85

Percentage of the population aged 20 years and above by province and educational level, 2001

86

Human Development Index by province and population group, South Africa, 2003

88

3.5

Net migration by province for 1996 and 2001

89

4.1

Views of development in the ‘Wenzhou Model’ and the ‘South Jiangsu Model’

103

FDI inflows in selected cities in the provinces of Jiangsu and Zhejiang, 1999

107

4.3

FDI inflows in selected cities of the Yangtze River Delta, 2005

108

5.1

Results of cluster mapping in Hungary using the 2005 census data

124

6.1

Summary of typical areas of corruption

141

6.2

Summary of typical actors in corruption situations

143

6.3

Causes of corruption

148

6.4

Consequences of corruption

149

6.5

Suggestions on how to counter corruption

149

7.1

Overview of the criteria for cluster identification and how strongly they are fulfilled by different fields in the reference region

162

8.1

Value expressed by the utility flow of forest functions

182

8.2

Utility flow generated by forest and pastures

183

3.3 3.4

4.2

vii

viii

List of Tables, Figures and Maps

13.1

Regression results: Outsourcing dummies per activity, 2002–5; 2002; 2005

265

Regression results: Outsourcing intensity per activity, 2002–5

268

Regression results: Outsourcing intensity per activity, 2002 and 2005

270

13.4

Reggio Emilia: Representativeness of the sample

273

13.5

Descriptive statistics and variable construction (116 observations)

275

13.2 13.3

Figures 2.1

Basic outline of South Africa and urban agglomerations

49

2.2

Density of per capita GDP (1996, 2000, 2004)

56

5.1–5.2

Potential clusters in the processed food, apparel, automotive, and communications equipment industries in Hungary, 2005

127

6.1

Suspected corruption cases by actor type, 2001–7 (%)

142

6.2

Suspected corruption cases by sectors, 2001–7 (%)

143

6.3

Suspected corruption cases by sectors, 2001–7 (%)

144

6.4

Suspected corruption cases by institution involved, 2001–7 (%)

145

6.5

Suspected corruption cases by procedure involved, 2001–7 (%)

146

7.1

The complexity of cluster-related aspects

157

7.2

The Federal State of Bavaria

160

7.3

Answers to the question: ‘Has your company already cooperated with the following partners?’

165

Cooperation activities of differently sized companies with other companies, universities and universities of applied science as well as with networks and initiatives

166

Cooperation activities of active and potential members of regional clusters and firms with no connections to clusters

167

Obstacles and problems in joining a cluster

168

7.4

7.5

7.6

List of Tables, Figures and Maps ix

7.7 Differently strong interlinkages between clusters

169

8.1 Ecosystem services and human well-being (adapted from De Groot et al., 2002)

180

11.1 Governance of, and interests in, economic development

236

12.1 Critical points of n when   2

253

Maps 5.1

Regional administration units of Hungary: Comitats (NUTS-3)

129

5.2

Regional administration units of Hungary: Regions (NUTS-2)

129

List of Contributors Acs, Zoltan J. School of Public Policy, George Mason University, US Antonioli, Davide Department of Economics, Institutions and Territory (DEIT), University of Ferrara, Italy Cserpes, Tünde Eötvös Loránd University (ELTE), Budapest, Hungary Csizmadia, Péter Institute of Sociology, Hungarian Academy of Sciences (HAS), Budapest, Hungary. Eigenhüller, Lutz IAB Institute for Employment Research, Nuremberg, Germany Fuchs, Stefan IAB Institute for Employment Research, Nuremberg, Germany Gios, Geremia Department of Economics, University of Trento, Italy Goio, Ilaria Department of Economics, University of Trento, Italy Gretter, Alessandro IASMA Research and Innovation Centre, Fondazione Edmund Mach, Trento, Italy Illésy, Miklós Institute of Sociology, Hungarian Academy of Sciences (HAS), Budapest, Hungary Iwasaki, Ichiro Institute of Economic Research Hitotsubashi University, Tokyo, Japan Krugell, Waldo School of Economics, North-West University (Potchefstroom Campus), South Africa x

List of Contributors xi

Litzel, Nicole University of Regensburg and IAB Institute for Employment Research, Nuremberg, Germany Makó, Csaba Institute of Sociology, Hungarian Academy of Sciences (HAS), Budapest, Hungary Matthee, Marianne School of Economics, North-West University (Potchefstroom Campus), South Africa Mazzanti, Massimiliano Department of Economics, Institutions and Territory (DEIT), University of Ferrara, Italy Möller, Joachim University of Regensburg, IAB Institute for Employment Research, Nuremberg and IZA, Germany Montresor, Sandro Department of Economics, University of Bologna, Italy Naudé, Wim World Institute for Development Economics Research (WIDER), United Nations University, Helsinki, Finland McNeely, Connie L. School of Public Policy, George Mason University, US Padoan, Pier Carlo OECD and University of Rome, Italy Pini, Paolo Department of Economics, Institutions and Territory (DEIT), University of Ferrara, Italy Sacchetti, Silvia Stirling Management School, University of Stirling, UK Sany, Joseph School of Public Policy, George Mason University, US Scerri, Mario Institute for Economic Research on Innovation (IERI), Faculty of Economics and Finance, Tshwane University of Technology, South Africa

xii

List of Contributors

Segnana, Maria Luigia Department of Economics, University of Trento, Italy Sugden, Roger Stirling Management School, University of Stirling, UK Szántó, Zoltán Corvinus University of Budapest, Hungary Szanyi, Miklós Institute of World Economics, Hungarian Academy of Sciences (HAS), Budapest, Hungary Debrecen University, Faculty of Economics and Business Administration, Hungary Tomasi, Chiara Scuola Superiore Sant’Anna and University of Urbino, Italy Tóth, István János Institute of Economics, Hungarian Academy of Sciences (IE HAS), Budapest, Hungary Vittucci Marzetti, Giuseppe Department of Economics, University of Trento, Italy Wang, Zhikai School of Economics, Zhejiang University, China

List of Abbreviations ABC

Architecture, Building and Construction

ANOVA

Analysis of Variance

BSN

Business and Social Networks

CAP

Common Agricultural Policy

CIF

Cost, Insurance and Freight

CORIS

Cluster-Oriented Regional Information System

CPC

Communist Party of China

EC

European Commission

EMR

European Metropolitan Region

EU

European Union

FAO

Food and Agriculture Organization

FDI

Foreign Direct Investment

FIE

Foreign Investment Enterprise

GDP

Gross Domestic Product

GGP

Gross Geographic Product

GPT

General Purpose Technology

HAS

Hungarian Academy of Sciences

HDI

Human Development Index

IAB

Institute of Employment Research, Germany (in German Institut für Arbeitsmarkt – und Berufsforschung)

IBM

International Business Machines Inc

IC

Industrial Clusters

ICT

Information and Communication Technology

IDC

International Data Corporation

IMF

International Monetary Fund

IP

Intellectual Property

IT

Information Technology

JHB

Johannesburg xiii

xiv List of Abbreviations

KZN

KwaZulu-Natal

LPS

Local Production System

MA/MEA

Millennium Ecosystem Assessment

MAR

Marshall-Arrow-Romer externalities

MNC

Multinational Corporations

MNE

Multinational Enterprises

NACE

Statistical Classification of Economic Activities in the European Community (in French: Nomenclature statistique des activités économiques dans la Communauté européenne)

NEG

New Economic Geography

NGO

Non-Governmental Organization

NUTS

(EU) Nomenclature of Territorial Units for Statistics

OAP

Offshore Assembly Program

OECD

Organization for Economic Cooperation and Development

OEM

Original equipment manufacturer

PANAC

Pannon Automative Cluster

PES

Payment for Ecosystem Services

PHARE

French: Poland and Hungary Assistance for Economic Restructuring Programme (in French: Pologne Hongarie Assistance à la Reconstruction des Economies)

PIMSS

Provincial Information Management Support System

PR

Public Relations

R&D

Research and Development

RCA

Revealed Comparative Advantage

RE

Reggio Emilia

REX

Regional Economic Explorer

SME

Small and Medium-sized Enterprises

SSA

Sub-Saharan African

TCE

Transaction Cost Economies

TFP

Total Factor Productivity

List of Abbreviations xv

TVE

Township and Village Enterprise

UR

University of Regensburg

USA

United States of America

VAC

Voluntary Action Cumbria

WTO

World Trade Organization