Technology Districts Research Paper

1. Common Features

Silicon Valley, Route 128, and the Research Triangle in the US, Cambridge in the UK, Sophia-Antipolis in France, Tsukuba and Kansai in Japan, Hsin-chu in Taiwan, and Bangalore in India are examples of technology districts. While their activities do not demonstrate a uniform pattern, there exist some similarities, such as interplay between public and private initiatives, active involvement of local educational and research institutions in innovation, a large proportion of highly educated and skilled personnel in the local labor force, and access to a wide range of urban infrastructural facilities.

2. Driving Forces

Technology districts are post-World War II (WWII) phenomena. Their genesis and development have been shaped by diverse factors (Sternberg 1996).

2.1 State Action

In some countries (e.g., the US and the UK) extensive defense spending since WWII has provided a powerful boost for corporate R & D in selected regions. It has also led to a significant growth of locally anchored university-industry ties through shared research facilities, joint or commissioned projects, and training. A further result is the increase of local technological diffusion and linkages through subcontracting and spin-offs. On the other hand, domestic politics has driven some local and national governments to make territorial high-tech development a major policy agenda. Efforts to carry it through often involve planning, funding, regulatory support, tax incentives, intermediary services, and improvement of physical, social, and research infrastructure in targeted locales.

2.2 Changing Milieu Of Innovation

Technological change in the postwar era has been accompanied by concurrent weakening of regulatory barriers to entry, lowering of knowledge threshold for tapping the potentials of new technologies, and rise of venture capital. These developments have intensified competition and shortened the cycle for technologyintensive products. This makes it increasingly difficult to reply on organizationally integrated division of labor as the primary mode of innovation. Synergy from interactions across organizational boundaries, thus, assumes greater importance for technological development. Such synergy may derive from territorial clustering of innovation activities, as spatial proximity is conducive to mutual learning, exchange of information, sharing of infrastructure, pooling of skilled human resources, development of trust, containment of risk and transaction cost, coordination of R & D efforts between interdependent parties, and formation of industry and service linkages.

2.3 Economic Globalization

In the last quarter of the twentieth century, the gradual lowering of barriers to cross-national movement of resources, information, products, services, and organizational practices has redefined the spatial character of international division of labor. National and regional competitiveness hinges increasingly upon innovation rather than resource endowment and factor cost. The challenges and opportunities posed by such reality have prompted convergent responses from growing numbers of governmental, corporate, and university decision-makers. A focal strategy is to identify and develop viable niches of locational advantage in which to form critical masses of innovation activities that are globally competitive. This leads to the creation or reformation of regulatory and infrastructural enclaves within or outside old manufacturing belts and metropolitan areas. They are intended to channel and attract resources from domestic and international sources for territorially concentrated technological development. A related goal is to strengthen the ties between the local economy and global conditions of demand and supply.

3. Variations

The formation and trajectory of technology districts vary in different historical and local contexts. Some districts evolve mainly out of university–industry interactions, whereas others are created and developed under government auspices. To certain extent, the level, scope, and scale of innovation activities in different technology districts are conditioned by the level and form of regional and national economic development (Castells and Hall 1994).

Moreover, not all efforts to build technology districts are successful, and some established districts have experienced difficulties, stagnation, and decline. Some studies (e.g., Saxenian 1994) attribute this to the rigidities in path-dependent local corporate structure and business culture that hinder the development of innovation networks. Other factors that may stifle local synergy include poor planning, weak entrepreneurialism in face of tight bureaucratic control, predominance of divergent agendas and interests (e.g., property development), and intradistrict negative externalities (e.g., infrastructural overloading and environmental deterioration).

4. Consequences

The full socioeconomic ramifications of technology districts remain to be explored. What are their effects on interregional disparities? How do they stimulate economic growth and institutional change beyond the region? How and to what extent do they foster elitism and increase cleavages in society? These are some of the important issues that have been raised but need to be examined more closely.

Furthermore, technology districts are evolving with the forces that they help unleash. In particular, their spatial organization faces growing impact from the explosive expansion of the Internet and rapid development of information technology, which could significantly reduce the constraints posed by distance and locality-specific institutions on social interaction. How this redefines the role of location in fostering innovation will be a major focus of attention among both practitioners and observers.

Bibliography:

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