1. Pierre Desrochers University of Toronto - Geography

2. Introduction 1) Geography & Economic Development 2) Silicon Valley & Clusters - SV: Facts & Myths - Replicating SV & Creating Clusters 3) Case against Regional Economic Specialization Conclusion

4. First, back to the basics of regional economic development…

5. Economic Activity in a Spiky World (Florida et al.)

6. Canada Nordhaus et al.

7. USA

8. France

9. Russia

10. India

11. Japan

13. SCHEDEL, Hartmann, Nuremberg, 1493

14. Towns = crossroads Conventional explanations: Trade (marketplace) Urbanization economies

15. « Where there is city growth, humanity moves forward…; Élisée Reclus (1895) Where they flounder, civilization itself is in danger. »

17. 1990s

18. “In Russia… there are an immense number of villages each of which carries on only one branch of production, or even only a part of one.” Alfred Marshall, Principles of Economics (1890)

19. « There are for instance over 500 villages devoted to various branches of woodwork; one village makes nothing but spokes for the wheels of vehicles; another nothing but the bodies and so on; and indications of a like state of things are found in histories of oriental civilizations chronicles of medieval Europe »

20. Combination of factors  specialized labour pool  localized economies of scale (specialized suppliers & infrastructure)  knowledge spillovers  research institutions

21. Chicken (cities/clusters) or Egg (economic development) ? Tautology (cities/clusters & agglomeration economies) Proximity & smart people (and then what?)

22.  State Vs Markets: Decades of experience(s)  What have we learned?

24. Silicon Valley

25. Early decades 20th C: San Francisco - radio technology & maritime hub; Local businesses: Federal Telegraph (1909), Magnovox (1917), Heintz & Kaufman (1921), Kolster Radio Corp (1928), Litton Engineering Laboratories (1932), Eitel & McCullough (1934) Mid 20th C: Cluster of vacuum tube manufacturers Stanford U & Frederic Terman Bill Shockley & transistors (left Bell Lab NJ for Palo Alto – family & business (« buzz ») reasons Spin-offs: « Traitorous Eight » - Fairchild semiconductors « Fairchildren » and others: Intel, H-P, Apple…

27. Growth processes? Same as elsewhere (Detroit/Akron/Italy/Germany) Government Interventions? Military contracts (but typically building on existing firms) University? Stanford University – applied and very good / best

28. Many policy makers intellectual entrepreneurs real estate promoters have tried to create “growth poles” “high-tech parks” “industrial districts,” “clusters” Charles de Gaulle

29.  (1955) “Note sur la notion de pôle de croissance,” Économie Appliquée 8: 307-320  « Growth Poles » climax: 1965 – 1975

31.  Political and Economic/Geographic Logics incompatible…  « Targeting » and « Planned External Economies of Scale » don’t deliver…  Spontaneous « Growth Poles » kept appearing…

33.  Clusters (pro-specialization, but with nuances…) 1990

36. Successes few and far between Main factors of success Prior locations (near thriving areas) Formalization of spontaneous growth Exceptional locations & sustained public efforts (Raleigh- Durham; Sophia-Antipolis), but mostly relocations of large firm operations Most overhyped factor: “World Class” academic institutions

37. What is a cluster? Politicians picking winners?  stealing from Peter to pay Paul  everyone targets same trendy industries  knowledge of time and place Politics (corruption) as usual…  selection of locations  favored businesses

38.  Urbanization economies  Multiplier effect  Stability & resiliency  Jacobs’ externalities

40. Regional Multiplier

41. Putting all eggs in one basket?

42. Local Economy Specialized Diversified Monopoly Several small ││││││││││││││││││││││││││││││││││││││││││││││││││││││ ____________________________________________ Firms

44. +

45. =

47.  work experience individuals acquire and sectors in which know-how will likely be transferred  network of knowledgeable people  tacit knowledge  agglomeration economies

49. Alceus ~ 600 BC “Not  houses finely roofed  nor the stones of walls well built  nor canals  nor dockyards make the city, but men able to use their opportunity.”

50. Crucial (except for world cities)  Reasonably affordable housing  Good schools  Decent infrastructure  Safety/security (personal – property rights)  Entrepreneurial mindset  Reasonable taxation and regulation Not crucial  Location (transport, weather)  Public transportation  World class universities  Cluster or Silicon Valley-inspired policies…