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Studies European Urban and Regional European Urban and Regional Studies http://eur.sagepub.com Technological Life-Cycles: Lessons from a Cluster Facing Disruption Bent Dalum, Christian Ø.R. Pedersen and Gert Villumsen European Urban and Regional Studies 2005; 12; 229 DOI: 10.1177/0969776405056594 The online version of this article can be found at: http://eur.sagepub.com/cgi/content/abstract/12/3/229 Published by: http://www.sagepublications.com Additional services and information for European Urban and Regional Studies can be found at: Email Alerts: http://eur.sagepub.com/cgi/alerts Subscriptions: http://eur.sagepub.com/subscriptions Reprints: http://www.sagepub.com/journalsReprints.nav Permissions: http://www.sagepub.com/journalsPermissions.nav Citations (this article cites 12 articles hosted on the SAGE Journals Online and HighWire Press platforms): http://eur.sagepub.com/cgi/content/refs/12/3/229 Downloaded from http://eur.sagepub.com at Universiteit Maastricht on September 3, 2007 © 2005 SAGE Publications. All rights reserved. Not for commercial use or unauthorized distribution. TECHNOLOGICAL LIFE-CYCLES LESSONS FROM A CLUSTER FACING DISRUPTION ★ Bent Dalum, Christian Ø.R. Pedersen and Gert Villumsen Aalborg University, Denmark Abstract New disruptive technological life-cycles may initiate closely related to the emergence of new key tech- the emergence of new regional industrial clusters or nologies.The analysis is focused on the strategy and create opportunities for further development of policy issues involved in the specific phase where existing ones. They may, however, also result in one technological life-cycle may (or may not?) be stagnation and decline. For clusters in many of the succeeded by the next. When facing disruption the fast developing technologies, the evolution is closely actors in the cluster have discussed various strategies related to shifts in technological life-cycles. During for how to cope with shifts in the technological life- the 1980s and 1990s new mobile communications cycles. We find that there is room and need for technologies have emerged as a series of distinct policy and collective action in periods of uncertainty life-cycles, which have caused major disruptions in created by new disruptive technological life-cycles. the industry.The paper examines the key features of a cluster in wireless communications technologies, KEY WORDS ★ communication technology where the economic evolution has been quite ★ regional clusters ★ technological life-cycles This paper is focused on how regional clusters may ‘disruptive’ refers to such significant changes in the react on the emergence of new disruptive basic technologies as may change the industrial technological life-cycles. During the 1980s and landscape. Tushman and Anderson (1986) describe 1990s new mobile communications technologies disruption as a technological discontinuity which is have emerged as a series of distinct ‘generations’. so significant that no increase in scale, efficiency or The introduction and diffusion of each of these life- design can make the older technologies competitive cycles have caused major disruptions in the industry, with the new one. but have also opened opportunities for new entrants. The case to be studied in detail is a cluster of The shifts from one generation to the next have also high-technology wireless communications firms in involved some major policy issues, such as choice of the region of North Jutland, Denmark. A special regulation and standardization set-up and the need emphasis is given to the study of whether and how a for large investments in university R&D. ‘collective spirit’ may be formed and turned into For detailed analysis of clusters in many rapidly collective action in periods of major threats and developing technologies, the theories of challenges. This again leads to a discussion of the technological life-cycles seem to fit, because a given interaction between privately and publicly initiated cluster often experiences the passing of several life- efforts and policy initiatives. Ideally, the paper aims cycles. The capability of a cluster to adapt to these at pointing to some features and mechanisms of a sequential ‘shocks’ of new technologies is the core more general relevance for evolution of regional field of the study. This paper intends to further clusters based on fast-developing technologies and develop the analysis of sequential disruptions by the opportunities and potential necessities for using the concept of technological life-cycles and developing policy measures in periods of major apply this on a single case over an extended period disruptions. of time, including several cycles. The term The term ‘cluster’ is applied as ‘geographic European Urban and Regional Studies 12(3): 229–246 Copyright © 2005 SAGE Publications 10.1177/0969776405056594 London, Thousand Oaks, CA and New Delhi, www.sagepublications.com Downloaded from http://eur.sagepub.com at Universiteit Maastricht on September 3, 2007 © 2005 SAGE Publications. All rights reserved. Not for commercial use or unauthorized distribution. 230 EUROPEAN URBAN AND REGIONAL STUDIES 12(3) concentrations of interconnected companies . well as influencing for example the discussion on linked by commonalities and complementarities’ income convergence versus divergence among (Porter, 1998: 199). It is important how precisely European regions. Krugman’s writings also caused a these commonalities and complementarities are comprehensive, but rather hostile, reaction from the conceived and defined. Martin and Sunley (2003) community of economic geographers during the have surveyed the wide array of cluster definitions 1990s, surveyed by Martin and Sunley (1996) and applied in the literature more recently. The cluster Martin (1999). concept appears to be very elastic and imprecise in In 1990 another stream of literature dealing with academic as well as in policy circles. The present the geographical dimension of economics emerged paper faces this problem by using a concise and from research rooted in a strategic management operational definition. The object of this analysis is perspective, in terms of Porter’s (1990) highly a rather precisely specified regional cluster, influential reinterpretation of Dahmén’s (1970; NorCOM, consisting of approximately 50 firms, a 1988) development blocks as regionally based science park, and Aalborg University. The industrial clusters. Also emerging in the early 1990s delimitation of the cluster has deliberately been was the literature on innovations systems, whether narrow, i.e. a common knowledge base focused on national (Lundvall, 1992; Nelson, 1993), regional radio waves as an information carrier. The size has (Cooke, 1992), or based on specific technologies made it possible to base the paper on extensive (Carlsson and Stankiewicz, 1991) or broader sectors interviews and interaction with a large share of the (Breschi and Malerba, 1997). Technical change and major players in the cluster, as well as allowing its diffusion have been core drivers of the rather specific discussions of policy issues. innovation-systems literature as well as of Porter’s The section which follows this introduction work. They share the view that the traditional linear highlights the general theoretical background of the model, where scientific discovery and invention paper, which is the reborn interaction between move on to industrial innovation in a fairly simple geography and economics since the early 1990s. The manner, cannot explain the dynamics of industrial next focuses on the concepts of technological life- development, neither at present nor historically. On cycles and the role of disruption. After that the the contrary, they share an emphasis on the systemic technological life-cycles in the mobile character of technical innovation – the institutional communication technology industry are analysed. set-up matters as does interaction among a great The cluster in its regional context is introduced many actors, such as firms, universities, industry next, while the following section contains the associations, standardization bodies, government analysis of the interaction of various generations of regulators (at the national as well as regional level), mobile communications technologies and the science parks etc. While the innovation-system evolution of the cluster. Next we focus on the future literature has emphasized the role of interfirm challenges for the cluster and the role of policy and cooperative networks, Porter has emphasized local privately initiated collective efforts. Finally, we competition as a main dynamic force in the present the conclusion. development of clusters. Recently, major attempts to synthesize and integrate these various lines of work have been presented. The Oxford Handbook of Economic The interaction between geography and Geography (Clark et al., 2000) represents a great economics effort to bring together the various contributions, although without necessarily solving the differences Since the early 1990s, the literature on the between the various approaches; there is still a importance of geography for economic development rather large gap between mainstream economics and has been revitalized. Inside the economics the other approaches. Edquist (1997) presents the profession Krugman (1991; 1995) has engaged in a various contributions to the innovations-system ‘crusade’ to integrate the spatial dimension into literature, which to a large extent appear to have mainstream economic theory. This has borne fruit been integrated through
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