ECONOMIC DEVELOPMENT QUARTERLY
CONDITIONS FOR A LOCAL
KNOWLEDGE ECONOMY
Reflecting upon what I have written here and
gleaned from other sources and research, it is
clear that a local knowledge economy is not one-
dimensional. That it can be described as a jigsaw
puzzle with specific pieces each uniquely important.
Three of the pieces are academia, industry and the
public sector. A fourth is a governance committee
characterised by a forward-looking and collaborative
mindset. A fifth piece is a shared understanding
and commitment to pursue opportunities in a
single sector. The last piece of the jigsaw is for the
cluster to be imbued with culture of learning and
entrepreneurialism, of the acceptance of what is
new, fresh and potentially disruptive.
While it will take time to successfully put together
this jigsaw puzzle, when it does get going there are
observations that can be made to help ensure the
ongoing health of your “local knowledge economy
cluster”.
Through their LEED (Local Economic and
Employment Development) program a few years
back the OECD published a paper that listed
several such observations. This study developed
a set of measurements that could be used to
understand the performance of “local business
clusters in the knowledge economy”. They
nominated measurements such as employment
growth, increases in firm profitability and viability as
well as the age of firms in the cluster.
Among the findings were two observations. Firstly,
clusters devoted to knowledge-intensive service
activities outperform hi-tech manufacturing when
it comes to employment growth and economic
turnover. Secondly, entrepreneurism (ie. young
firms) is linked to growth in both employment and
economic turnover.
CREATING A LOCAL KNOWLEDGE
ECONOMY
Thinking about these jigsaw puzzle pieces and
what is common among them, one can see that the
successful creation of a local knowledge economy
cluster does indeed come down to people. It comes
down to those willing to champion such an initiative,
and those willing to support these champions. There
is no set profile for a champion. Referring to the
examples used in this article: Bio Turku got started
with a property developer, and Silicon Valley had
academic John Terman as its primary instigator.
In short, it does come down to leadership, to men and
women able to see where the possibilities lie. Then,
as the vision of the early leader(s) comes into view,
people and organisations from each of the components
of the Triple Helix need to be gathered. Where the
overarching intent is to ensure the three knowledge
economy factors and the remaining pieces of the jigsaw
are harmoniously unfolding the founding idea.
Where the possibilities are found in leveraging the
existing strengths, skills and knowledge of your local
economy. Where like-minded people and organisations
are drawn to the nascent vision. And where structures
are put in place to ensure long term success.
The creation of a local knowledge economy requires
intent. It is built on the long-term effort to harness
to potential of the production, distribution and
application of knowledge. In this context, relevant
are the words of Winston Churchill: “A pessimist
sees the difficulty in every opportunity; an optimist
sees the opportunity in every difficulty.”
REFERENCES
Citi-GPS “Technology at work 2.0: The future is not what it used to be”,
Oxford Martin School
David P, Foray D (1994). “Accessing and expanding the science and
technology knowledge base”, DSTI/STP/TIP (94)4, OECD, Paris
Moretti, E (2010). “Local Multipliers”, American Economic Review:
Papers and proceedings 100, May 2010, pp373-377
Romer P (1986), “Increasing Returns and Long-Run Growth”, The
Journal of Political Economy, Vol. 94, No. 5 (Oct, 1986), pp. 1002-1037
Ross, A (2018). “The Industries of the Future”, Simon and Schuster,
Great Britain
Schultz T (1980). “Investing in people: The economics of population
quality”, The Royer Lectures, University of California Press, 1981,
London
Temouri, Y. (2012), “The Cluster Scoreboard: Measuring the
Performance of Local Business Clusters in the Knowledge Economy”,
OECD Local Economic and Employment Development (LEED) Working
Papers, 2012/13, OECD Publishing.
ABOUT THE AUTHOR
Paul Tero is currently undertaking the practice-based PhD
program at Swinburne University. Where his research is
focused on approaches to long term peri-urban outcomes
with respect to tradable goods in the knowledge economy
(aka “The Industries of the Future”) He holds Masters degrees
in Business Administration (Technology Management),
International Business, and Strategic Foresight. Aside from
the EDA he is a member of the Australian Computer Society,
the Association of Professional Futurists, and the Professional
Speakers Association. In recent times he held executive
roles in local business groups and is well experienced in
the education and information technology sectors. He has
published a Kindle-based career choices workbook entitled
“Jobs. Future. You.” and speaks to business groups, councils
and secondary schools about the future of business and
of work. He is currently contributing a series of articles
exploring aspects of the digital economy on the Association
of Professional Futurists web-site (apf.org/blog). Paul can be
contacted through his LinkedIn profile (https://www.linkedin.
com/in/paultero)
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