From Mass To Motion: The Temporal Dynamics Of Industry Clusters

Abstract

This dissertation zooms in an underexplored phenomenon that I refer to as the temporal dynamics of industry clusters: concentration levels of industry activity in a region change over time and patterns of growth do not necessarily follow life cycle stages or larger industry- or region-wide trends. Despite extensive work on cluster size (or “mass”), there has been little attention paid to their temporal dynamics (or “motion”). I propose that understanding cluster dynamics is important, because clusters are seldom stable, and cluster dynamics may have strategic implications not accounted for in existing approaches. In the first essay of my dissertation (Chapter 2), I build a framework for characterizing cluster temporal dynamics, develop a novel empirical technique that characterizes the dynamics, and document the prevalence of the phenomenon. The second essay (Chapter 3) builds on the first chapter framework and examines how cluster dynamics influence the nature of technology creation. I find evidence that innovation by firms in clusters experiencing greater sustained growth is likely to be more disruptive relative to innovation by firms in clusters of comparable size that are experiencing stable or declining periods. I also find that cluster dynamics influence innovation, at least in part, because of cross-cluster employee mobility, which has rarely been discussed as a key mechanism by which clusters influence firm innovation. In the third essay (Chapter 4), I conduct a qualitative study on cluster temporal dynamics based on interviews and historical case studies, unpacking the phenomenon of the temporal dynamics of the medical device industry in the Minneapolis-St. Paul region.