THE DEVELOPMENT PERSPECTIVES FOR THE ICT SECTOR IN NORTH JUTLAND Christian Østergaard Richter Pedersen PhD Thesis - February 2005 Department of Business Studies, Aalborg University Preface In July 2001 I started as a PhD student at the IKE Group at Aalborg University partly financed by the Digital North Denmark policy programme. I joined Aalborg University’s participatory research group who was to carry out research in relation to this programme. I have benefited from this context, but it has also affected the content and size of this thesis. The writing of this thesis has in many respects depended on help and support from, and interaction with many people. Firstly, I want to thank Bent Dalum for inspiring and good supervision during my period as a PhD student. Secondly, I would like to thank Bent Dalum, Gert Villumsen, and especially Michael Dahl for many talks, discussions, and co-authoring of papers that have resulted in (forthcoming) publications in journals, such as Research Policy, Journal of Engineering and Technology Management, European Urban and Regional Studies, and several book chapters. However, this would not have been possible without the learning and supportive environment of the IKE group. I have benefited greatly from interaction with members of this group. The IKE group and the DRUID conferences have provided an international research training ground for me and given me the opportunity to present my work, receive valuable feedback, and meet other researchers with similar interests. During the years as a PhD student I have experienced personal development, been travelling, and participated actively in the international research community, e.g. through the ETIC doctoral courses in Maastricth and Strasbourg, the ESSID summer school at Corsica, my visit at Haas School of Business at Berkeley, the CCC colloquium in Atlanta, the EU-TSER project TENIA, and more importantly my six-month stay at SPRU at University of Sussex in Brighton in 2003. A special thanks to my friends at SPRU. I also wish to thank the participants at my pre-defence December 17th 2004 for valuable comments that added to my frustrations, but definitely improved the final thesis. Many thanks to Lars Anderson, Nils Østbjerg, and the rest of the IT staff for providing good IT support, and to the IKE secretaries Dorte Køster and Jeanette Hvarregaard for helping me with many practicalities that have hindered my work. Finally, I want to thank Lena and my family for supporting and encouraging me in writing this thesis, and during my many travels. Christian Østergaard Richter Pedersen Aalborg, February 2005 1 Contents Chapter 1: Introduction.......................................................................................................7 PART ONE: SETTING THE STAGE 31 Chapter 2: The Danish ICT Sector from 1992 to 2002 ...................................................33 Chapter 3: Knowledge Flows in the Danish ICT Sector: The Paradox of Advanced Demand and Mediocre Supply ..........................................................................................49 Chapter 4: The Industry Structure in North Jutland from 1983 to 2002: From Lagging Behind to Structural Catching-up .....................................................................89 PART TWO: CLUSTER ANALYSIS 100 Chapter 5: Entry by Spinoff in a High-tech Cluster ....................................................101 Chapter 6: Knowledge Flows through Informal Contacts in Industrial Clusters: Myth or Reality? ........................................................................................................................137 Chapter 7: Social Networks in the R&D Process: The Case of the Wireless Communication Industry Around Aalborg, Denmark ................................................159 Chapter 8: Technological Life Cycles: A Regional Cluster Facing Disruption – What can be learned? .................................................................................................................183 PART THREE: THE DIGITAL NORTH DENMARK 212 Chapter 9: Incremental Versus Radical Change – The case of the Digital North Denmark Programme.......................................................................................................213 Chapter 10: The Digital North Denmark: Digital TV, M-commerce, and IT infrastructure....................................................................................................................245 Chapter 11: Conclusion....................................................................................................309 Chapter 12: Summary......................................................................................................319 Chapter 13: Summary in Danish (Resumé på dansk) ..................................................325 2 Detailed Contents Chapter 1: Introduction.......................................................................................................7 1 Cluster theory ....................................................................................................................10 1.1 Cluster definition .......................................................................................................10 1.2 Regional clustering - main causes..............................................................................12 1.3 Cluster dimensions .....................................................................................................16 2 Research questions ............................................................................................................21 3 Outline of the thesis...........................................................................................................24 4 References.........................................................................................................................27 PART ONE: SETTING THE STAGE 31 Chapter 2: The Danish ICT Sector from 1992 to 2002 ...................................................33 1 Introduction.......................................................................................................................34 2 Definition of the ICT sector ..............................................................................................35 3 The development of the ICT sector from 1992 to 2002 ....................................................37 3.1 Geographical specialisation and evolution.................................................................41 4 The development of the ICT sector in North Jutland .......................................................45 5 Conclusion.........................................................................................................................47 6 References.........................................................................................................................48 Chapter 3: Knowledge Flows in the Danish ICT Sector: The Paradox of Advanced Demand and Mediocre Supply ..........................................................................................49 1 Introduction.......................................................................................................................50 2 ICT within an innovation system perspective ...................................................................52 3 Structure and performance of the Danish ICT sector in an international perspective.......56 3.1 International specialisation of ICT manufactured goods............................................59 4 What lies behind the relative weakness of the Danish ICT sector ....................................67 5 ICT consumption pattern...................................................................................................71 6 Regionally clustered strong niches in the ICT sector........................................................74 7 Conclusion.........................................................................................................................77 8 References.........................................................................................................................79 9 Appendix...........................................................................................................................83 Chapter 4: The Industry Structure in North Jutland from 1983 to 2002: From Lagging Behind to Structural Catching-up .....................................................................89 1 Introduction.......................................................................................................................90 2 The industry structure in North Jutland from 1983 to 1992..............................................91 3 Structural catching-up in the 1990s ..................................................................................93 3 Detailed Contents 4 Development from 1999 to 2002 ......................................................................................95 PART TWO: CLUSTER ANALYSIS 100 Chapter 5: Entry by Spinoff in a High-tech Cluster ....................................................101 1 Introduction.....................................................................................................................102 2 Entry and pre-entry organisational capabilities...............................................................102 2.1 Types of entrants ......................................................................................................103 2.2 An evolutionary account for spinoffs.......................................................................104