This paper introduces the concept of netchain analysis. A netchain is a set of networks comprised of horizontal ties between firms within a particular industry or group, which are sequentially arranged based on vertical ties between firms in different layers. Netchain analysis interprets supply chain and network perspectives on inter-organizational collaboration with particular emphasis on the value creating and coordination mechanism sources. We posit that sources of value and coordination mechanisms correspond to particular and distinct types of interdependencies: pooled, sequential, and reciprocal. It is further argued that the recognition and accounting of these simultaneous interdependencies is crucial for a more advanced understanding of complex inter-organizational relations. The paper concludes with an analysis of a set of netchain configuration examples, including buyer-supplier relationships, information technology induced inter-organization collaborations, and the introduction of the “macrohierarchy” organization structure. Key words Network, supply chain, value chain, interdependence, cooperative strategy. 1 We thank the h elpful comments by two anonymous referees. All remaining errors and omissions are our own. 1.

Economic development and underdevelopment is one aspect of the uneven spatial distribution of economic activity. This paper reviews existing literature on geography and development, and argues that rigorous theoretical and empirical analysis is needed to increase understanding of the role of geography in development and to better design development policy. The analytical issues are: why does economic activity cluster in centers of activity? How do new centers develop? And what are the consequences of remoteness from existing centers? Empirical evidence comes both from the international context and from studies of internal economic geography and urbanization.

This article outlines a framework for the analysis of economic integration and its relation to the asymmetries of economic and social development. Consciously breaking with state-centric forms of social science, it argues for a research agenda that is more adequate to the exigencies and consequences of globalization than has traditionally been the case in ‘development studies’. Drawing on earlier attempts to analyse the cross-border activities of �rms, their spatial con�gurations and developmental consequences, the article moves beyond these by proposing the framework of the ‘global production network ’ (GPN). It explores the conceptual elements involved in this framework in some detail and then turns to sketch a stylized example of a GPN. The article concludes with a brief indication of the bene�ts that could be delivered by research informed by GPN analysis. KEYWORDS Globalization; economic development; business networks; institutions; embeddedness. The analysis of economic development has been bedevilled by a series of analytic disjunctions that have resulted in work either at macro or meso levels of abstraction or, where empirical investigations have probed micro level processes, the larger analytic picture has often been absent, merely implicit, or at best weakly developed. While there are notable exceptions to this general rule (for instance, Armstrong and McGee, 1985) behind it lies half a century and more of scholarship in development economics (irrespective of its paradigmatic stripe) and in the political economy and sociology of development. 1 What is more, from the beginnings of ‘dependency ’ approaches to development in the 1940s through to debates over the respective roles of states and markets in the East

This paper is written as the first chapter of an edited volume on evolutionary economics and economic geography (Frenken, K., editor, Applied Evolutionary Economics and Economic Geography, Cheltenham: Edward Elgar, expected publication date February 2007). The paper reviews empirical applications of evolutionary economics in the field of economic geography. The review is divided in four parts: the micro-level of the firm, the meso-levels of industry and network, and the macro-level of spatial system. Some remarks on evolutionary policy in regional development are added as well as a short discussion of empirical problems that remain. www.druid.dk ISBN 87-7873-218-2 1.

Today, knowledge economies are a key asset for global competitiveness. Biotechnology is a knowledge-driven sector because it consists of knowledge working on knowledge to create value, decoding in genomics and proteomics being paradigmatic knowledge-based economic activity. Like many other new economy industries such as information and communications technology, new media, and advanced finance, firms cluster in proximity to knowledge sources. In the case of biotechnology, universities are key magnets. But to transfer science from the laboratory bench to the market involves complex, interactive chains of transactions among scientists, entrepreneurs, and various intermediaries. Chief among the latter are investors and lawyers. Proximity to such services and, in biotechnology, research hospitals for clinical trials creates an innovation system. This is best analyzed regionally and locally. This article anatomizes the functioning of regional sectoral innovation systems in Germany, Cambridge, Massachusetts, and Cambridge, U.K. Innovation is a key competitive weapon in an era of globalization. Firms and enterprise support infrastructures are becoming more knowledge intensive, and policies are being adjusted accordingly. Among the key general findings of the European

The concepts of industrial district and cluster have entered our economic daily life language, however they are still characterised by a strong semantic ambiguity. In the last decades also new terminologies have come up to define the episode of local development, characterised by a strong specialisation, like the term of local production system or the industrial milieu. This paper develops a systematic analysis of the literature, starting from the Marshall tradition and discusses differences and analogies. It develops also a methodology of classification of the industrial district /cluster phenomenon on the basis of an empirical morphology.

During the last three decades we have witnessed a significant change in the debates on regions and regional policy. Until the 1970s, regions were considered as the level where economic disparities became visible. Efforts to reduce the imbalance between regions were part of the welfare state policies in most European countries. At present, regional economic disparities have become no less important, but redistributive policies and assistance to poor regions are regarded as too costly, as producing unintended effects and as being exploited as windfall gains. Regional policy puts an emphasis on endogenous development and on mobilising the particular advantages of each region. Moreover, sustainability became a decisive aim in re-gional development which should be achieved by an integrative approach to promoting devel-Arthur Benz 2 oping including economic, social, ecological and cultural concerns. In accordance with this change in policy, institutional reforms have been designed to strengthen the autonomy and capacities of regions, but networks and cooperation among actors in the region have been regarded as most important. Not coincidentally, this rise of the regional level and the emphasis of sustainable develop-

Over the past decades, economic and innovation policy across Europe moved in the direction of creating regional clusters of related firms and institutions. Creating clusters through public policy is risky, complex and costly, however. Moreover, it is not necessary to rely on clusters to stimulate innovation. A differentiated and combined network approach to enhancing innovation and stimulating economic growth may be more efficient and effective, especially though not exclusively in regions lacking clusters. The challenge of such a policy is to mitigate the bottlenecks associated with ‘global pipeline’, ‘local buzz ’ and ‘stand alone ’ strategies used by innovative firms (cf. Bathelt et al. 2004; Atzema & Visser 2005b), and to combine these strategies with a view to their complementarity in terms of knowledge effects. Private and semi-public brokers will be key in the evolving policy, as timely organizational change is crucial for continued innovation, while brokers also need to mitigate governance problems. This requires region-specific knowledge in terms of sectors, life cycles, institutional and socio-cultural factors, and yields spatially differentiated and differentiating adjustment strategies. The role of public policy is to assist in recruiting, provide start-up funding and monitor brokers. With this, policy moves towards a decentralized, process-based, region-specific, spatially diverging and multi-level system of innovation that is geared towards the evolving innovation strategies of firms.

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this report are those of the authors and do not necessarily reflect the policies of the European Commission. Contact Dr. Emmanuel Muller Fraunhofer Institute for Systems and Innovation Research Breslauer Strasse 48 76139 Karlsruhe (Germany) Tel.: + 49 / 721 / 6809-232 Fax: + 49 / 721 / 6809-176 e-mail: em@isi.fhg.de URL: http://www.isi.fhg.de/ir/ I Table of Contents Introduction .............................................................................................................. 1 1. Region and innovation: A state-of-the-art survey .......................................... 3 1.1. Regional determinants of innovation................................................ 3 1.2. The issue of regional convergence ................................................... 5 1.3. The aims of regional policies............................................................ 7 1.4. Regional innovation systems and regional governance...................