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Terry Flew
For much of its history, economics as a discipline has tended to work with a limited
often assumed that markets operate, as the geographer Doreen Massey put it, ‘like angels
dancing, on the head of a pin’ (Massey, 1984: 52). Where the question of where economic
activity takes place, the focus was commonly on the economic development of nations,
most famously articulated by Adam Smith in The Wealth of Nations. The macroeconomic
revolution that followed the publication of John Maynard Keynes’ General Theory in
1936 was focused upon the flows of goods, services, people and money between nations,
in line with the orientation towards the nation-state that came to characterize the social
One of the few major economists to have given explicit attention to questions of where
economic activity takes place was Alfred Marshall. In his Principles of Economics, first
published in 1890, Marshall addressed this question with particular reference to the
changing industrial geography of 19th century Britain. In the first instance, industries
locate near those parts of the country where the physical raw materials are most available
(such as steel mills near coal mines), but the patronage of wealthy individuals and
governments could also attract skilled people to a city or region, as with artisans and
particular region on a single industry had advantages and disadvantages. The advantages
are that labor markets develop in such places and what we today term tacit knowledge is
fostered by the clustering of a particular group of workers in a region. As Marshall put it:
When an industry has chosen a locality for itself, it is likely to stay there long: so
great are the advantages which people following the same skilled trade get from
mysteries; but are as it were in the air, and children learn many of them
machinery, in processes and the general organization of the business have their
merits promptly discussed: if one man starts a new idea, it is taken up by others
and combined with suggestions of their own; and thus it becomes the source of
supplying it with implements and materials, organizing its traffic, and in many
ways conducing to the economy of its material (Marshall, 1990 [1890]: 225).
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The obvious disadvantage is that the economic fortunes of the region are very much
hostage to developments in that industry. Over time, cities tend to develop a more diverse
range of activities, and improvements in transport and communication further this trend,
because even though they make it easier to move goods from one place to another
(thereby promoting regional specialization), they also make it easier for people to move
from one place to another. What Marshall observed in 19th century Britain was not so
much the movement of the population from agriculture to manufacturing, as the use of
large-scale machinery meant that growth in output was steadily less dependent upon
additional supplies of labor, but rather the growth of service occupations and industries,
that cluster around growth centers. The rise of services, for Marshall, ‘tended to increase
the specialization and localization of industries’ (Marshall, 1990[1890]: 230), as they can
make a region less vulnerable to the cyclical fluctuations and the rise and fall of
economists, partly because they opened up the thorny question of what happens to
equilibrium economic models if we allow for falling costs and increasing returns to scale,
which would make monopolies more prevalent and challenge assumptions that the price
mechanism operates primarily to ration scarce goods and services (Warsh, 2006). The
French economist Francois Perroux developed the concept of growth poles to assist
based upon industrial specialization, and Swedish economist Gunnar Myrdal developed
the concept of cumulative causation to explain why particular regions could experience
eon-going growth based upon the agglomeration of industries and skilled labour, which
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could occur at the expense of other regions. For the most part, however, these insights
were not taken up in the Anglo-American economic mainstream, and they were also at
the margins of economic geography until the 1970s, which became more interested in
developing a ‘science of the spatial’ that could make the sorts of universal claims that
The rise of clusters as a stand-alone concept emerges out of the business management
literature, and particularly with the work of Michael Porter from the Harvard Business
School (Porter, 1990). In extending his competitive advantage model from firms to
nations, Porter observed that understanding the dynamic and sustainable sources of
competitive advantage required a shift of thinking away from costs and production
efficiencies towards those elements that promote productivity growth over time and
innovation, and in particular the spillover benefits that can emerge from being in
particular locations, including the presence of related and supporting industries. Porter
argued that location within particular clusters are able provide three sources of
1. Productivity gains, deriving from access to specialist inputs and skilled labour,
going face-to-face contact with others in the industry, and the presence of
workforce), and reduced barriers to exit from existing businesses as takeovers and
Cluster theories bring together two dynamic trends in economic geography. The first is
industries in a particular city or region, and the positive externalities that can arise from
specialization, and was developed in three directions in the 1980s and 1990s. First, there
was a growing interest in the significance of industrial districts, or those cities and
regions that appeared to defy trends towards de-industrialization and the shifting of
manufacturing industry towards lower cost centers in the developing world. Work on
manufacturing districts in the ‘Third Italy’, to take one example, pointed to an evolving
embedded trust relations that acted as a positive stimulus to innovation, and the
production of quality goods that retained global market demand even in the face of lower-
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cost alternatives from countries such as China (Piore and Sabel, 1984; Asheim, 2000).
Second, there were those regions where conspicuous value adding to a primary product
had occurred through cluster developments that had a global impact, such as in the wine-
making regions of California and South Australia. Finally, there was the focus on
developing new high-technology districts that could become the “next Silicon Valley”
(Castells and Hall, 1994; Kenney and von Burg, 2000). The costliness and lack of results
associated with many of the ventures, combined with the realization that the lessons of
Silicon Valley were hard to generalize to other locations (Leslie and Kargon, 1996), has
generated skepticism among economic geographers about the cluster concept, with
Martin and Sunley observing that ‘it is being applied so widely that its explanation of
causality and determination becomes overly stretched, thin and fractured’ (Martin and
cities, whether through migration from the countryside or from other parts of the world.
Amin (2003) observes that, historically, ‘the Western city was the factory and the center
of commercial life, in short, the engine of capital accumulation … the city became the
(Amin, 2003: 115). While the disadvantages of cities – such as pollution, overcrowding
and high land rents – have seen large parts of industry leave cities to take advantage of
based economies on the basis of factors such as the benefits of proximity for diverse
cities, and ther location of corporate headquarters in “global” cities. Lorenzen and
localization on the basis of the place itself attracting a diverse range of industries and
define the location. The positive externalities that cities develop include their diversity of
industries, the sharing of knowledge among unrelated firms and industries, the diversity
of labor, skills, knowledge and ideas that act as stimuli to innovation and
entrepreneurship, and the range and diversity of institutions and infrastructures (Lorenzen
and Frederiksen, 2008: 159-160). Surveying the literature from economics, geography
There appears little evidence to support the claim that cities are becoming less
density, now perhaps less significant for the production of mass manufactures
result of economic forces. In his epic Cities in Civilization, Peter Hall (1998) observes
that because the city ‘continues to attract the talented and the ambitious … it remains a
unique crucible of creativity’ (Hall, 1998: 7). Through his historical account of great
cities, Hall argues that ‘while no one kind of city, or any one size of city, has a monopoly
on creativity or the good life … the biggest and most cosmopolitan cities, for all their
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evident disadvantages and obvious problems, have throughout history been the places
that ignited the sacred flame of human intelligence and the human imagination’ (Hall,
1998: 7). The need to think about cultural and economic factors together has, for Hall,
their cities ‘have become more and more preoccupied by the notion that cultural
industries … may provide the basis for economic regeneration, filling the gap left by
vanishing factories and warehouses, and creating an urban image that would make them
more attractive to mobile capital and mobile professional workers’ (Hall, 1998: 8).
The notion that city cultures could constitute a key source of location-based competitive
advantage became one of the big ideas of urban economic geography in the 2000s.
Landry (2000) drew attention to the role played by creative cities in catalyzing economic
and social innovation, particularly through the formation of a creative milieu, who
generate what he terms a soft infrastructure of ‘social networks, connections and human
interactions, that underpins and encourages the flow of ideas between individuals and
institutions’ (Landry, 2000: 133). Florida (2002, 2008) has widely proclaimed that cities
with a reputation for tolerance, diversity, openness to new ideas and cultural “buzz” act as
talent magnets for what he terms the creative class of ideas-generators who are central to
the knowledge-based and creative industries and are, for Florida, the fastest growing
segment of the U.S. economy, as creativity becomes ‘the decisive source of competitive
The growing interest in creative cities has arisen in part out of the awareness that, in the
21st century, cities have become more important. This was despite forces emerging since
the 1970s, such as economic globalization, the suburbanization of major cities, the
movement of large-scale manufacturing to the developing world, and the rise of the
which could have promoted population dispersal and the decline of cities. Scott (2008)
links the resurgence of cities to the rise of what he terms the cognitive-cultural economy,
and others term the rise of the creative industries (Hartley, 2005) or the creative economy
(UNCTAD, 2008). Scott links the centrality of cities, or what have also been termed
global city-regions (Scott, 2002), to three core elements of this “new” economy:
reduces the transaction costs of joining and maintaining such networks across
agglomerations as the centre of activity, thereby reducing job search costs, and as
3. The resulting local system of production, employment and social life in turn
forms of ‘social overhead capital’ that includes the role played by universities,
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research centers, design centers and other sites that generate specialist knowledge
Alongside the resurgence of cities has been a rethinking of the role of culture, from a set
of activities defined by their distance from the economy (the non-commercial arts),
towards culture as a resource. Landry argued that ‘cultural resources are the raw
materials of a city and its value base … Culture, therefore, should shape the technicalities
of urban planning rather than be seen as a marginal add-on to be considered once the
important planning questions like housing, transport and land-use have been dealt with’
(Landry, 2000: 7). In a similar vein, Venturelli identified culture as the “gold” of the
Culture can be seen as the key to success in the Information Economy, because
for the very first time in the modern age, the ability to create new ideas and new
forms of expression forms a valuable resource base of a society and not merely
given community … the greater cultural concern should be for forging the right
that contributes to this dynamism and not solely for the defence of a cultural
In terms of urban policy, thinking about culture as an economic resource and as an asset
generating competitive advantage has given rise to what Stevenson refers to as a new
civic gold rush in urban planning and cultural policy alike, promoting strategies aimed at
‘fostering strategically the cultures of cities and regions … [where] culture and creativity
cities eager to compete with each other on the basis of imager, amenity, liveability and
The creative cities debate can be understood at two levels (Stevenson, 2004; Mommaas,
2004; Cooke, 2008; Costa, 2008). First, there are debates about whether whole cities are
creative, and whether some cities are more creative than others. Such claims have been
made about cities such as London (Landry, 2005), New York (Currid, 2007), Los Angeles
and Paris (Scott, 2000). ‘Creative city’ indices inspired by the work of Florida and
Landry have generated “league tables” designed to address such questions. Is San
Francisco more creative than Los Angeles? Is Dublin more creative than Glasgow? Is
Barcelona more creative than Madrid? Is Melbourne more creative than Sydney? Storper
and Scott (2009) observe that aside from problems arising from the metrics used for such
exercises, they are premised upon assumptions that urban growth and the capacity to
factors, or the ability of local authorities or cultural elites to generate the right “settings”
to attract creative workers, and systematically downplay the role played by global macro-
economic forces in driving the location of such industries. It is not surprising, then, that
cities such as New York, London, Los Angeles and Paris feature in such discussions, as
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these are global cities and centers of global information and service industries more
generally.
A second approach focuses upon creative clusters and the capacity of local authorities to
incubate creative industries growth in particular parts of major cities, sometimes referred
to as cultural quarters (Bassett et. al., 2005; Cooke, 2008). Such strategies are closer to
the Marshall-Porter tradition of cluster development, as they are premised upon the
Utrecht), Mommaas (2004) observed that strategies have been driven by a heterogeneous
cultural policy;
• Finding new uses for derelict industrial-era sites such as warehouses, power plants
communities.
Given such an eclectic mix of motivations, it is not surprising that the scorecard for the
European cities, Bassett et. al. (2005: 150-153) argue that some of the benefits have
included:
• Moving questions of culture from the margins to the centre of urban development
strategies;
• Broadening understandings of culture from elite arts and formally defined arts
centers to the wider spectrum of informal arts practices, popular culture and
• More integrated approaches to urban planning and zoning that recognize the
• Development of new cultural infrastructures that have acted as catalysts for urban
regeneration and given cities more of a cultural image that also acts as an attractor
• Blurring of the distinctiveness of arts and culture, and absorption into civic
• The danger that the drive to harness the cultural and creative assets of locations
• The tendency of creative cities to bifurcate between urban ‘creative’ elites and a
large supporting army of low-wage service industry workers (Peck, 2005; Scott,
While there is an extensive literature on the relationship between cities and globalization,
and the role of universities in knowledge-based and creative economies, there has been
surprisingly little work undertaken on the relationship between cities and universities.
The result is that ‘the role of cities in the globalizing environment are studied
independently of the institutional place of their universities’ (Perry and Wiewel, 2008: 4).
We find no consistent theme over time or across nations around the question of where
universities should be located, and while almost all major cities have universities, there
are many major universities located outside of major cities. Indeed, there is an influential
tradition of the modern research university that emphasized campuses being located away
from major population and industry centers in order to promote independent scholarship,
whose most visible manifestation can be found with many of the major U.S. public
universities established in the late 19th century. Indeed, the word campus, first used to
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describe the grounds of Princeton University in New Jersey, refers to a field, and has
implied a space located outside of the city grounds (Haila, 2008: 31).
The literature on universities and clusters has been overwhelmingly focused upon the
Technology (MIT) and the Route 128 high-tech cluster outside of Boston, and the
relationship between Stanford University and Silicon Valley south of San Francisco,
providing key case studies. Both cases have proved difficult to replicate in other contexts,
understand not only its relationship to proximate ICT companies, but also to nearby
Harvard University and a range of prestigious universities also located around Boston
of Massachusetts), which make the Boston area one of the most research-intensive
regions in the world. Hulsink et. al. (2007) find that the ICT companies around Route 128
have not been particularly strong on knowledge sharing, and that much of the research
intensity of the region derives from relations among the universities and colleges
themselves, rather than knowledge transfer with industry. The Stanford University/Silicon
(1996) note that most attempts to replicate the “Silicon Valley model” have failed, and
suggest that one reason for this is that both the university and the start-up businesses
emerged together. Interestingly, they observe that attempts to replicate the model in
countries such as South Korea, with the Korean Advanced Institute of Science and
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Technology (KAIST) have been more successful than the various attempts to reproduce it
Seeking to align universities more closely to industry and policy agendas is consistent
with what Gibbons et. al. (1994) referred to as ‘Mode 2’ of knowledge production,
differentiated from ‘Mode 1’, or the traditional university model, on the basis of the
following criteria:
MODE 1 MODE 2
Conditions of knowledge Grounded within rules and Grounded in context of
production practices of an academic application and
discipline expectations of external
clients
Conditions of knowledge Academic discipline as a Multiple stakeholders, both
valorisation ‘single collective within and outside the
stakeholder’ academy
Purpose of knowledge Advancement of Solving of practical
disciplinary knowledge problems as they arise in
social context
Mode of knowledge Individuals or discipline- Trans-disciplinary, project-
production based groups based teams
Where knowledge is Traditional sites: Multiple sites: universities,
produced universities and research corporations, government
centers agencies, ‘think tanks’,
activist organizations,
consultants etc.
Quality control Internal mechanisms (e.g. Multiple criteria
mechanisms academic peer review) (contribution to economic
productivity, social
cohesion etc.)
Although this debate has largely occurred in the science and technology areas, Ang
(2004) has noted its relevance to the humanities in general, and cultural studies in
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particular, where ‘knowledge production has become much more widely distributed, taking
place in many more types of social settings, and involving many different types of individuals
and organizations … [and] to the extent that universities continue to provide quality
graduates, they undermine their monopoly as knowledge producers’ (Ang 2004: 479). Hartley
(2005) also identifies its particular significance in the context of the rise of creative
industries, and for universities based in cities where ‘there is also a large number of people
who are trend-conscious, early adopters, curious about the new, and relatively unencumbered
by family commitments … Universities are not just destinations, but hubs, and young people
with time on their hands who are just hanging around are just as important to the creative
aware of three endemic questions that arise with the clusters concept itself:
promoting certain sites as creative cities vis-à-vis the enabling role of supply-
diverse culture. The result is that every city is presented as having the potential to
become a creative city, even though in practice there are strong correlations
between those cities that are leaders in global financial, service and entertainment
designated cultural quarters? There is considerable evidence that the two can be
associated with urban ‘branding’ and real estate development than with questions
consumption? Pratt (2009) has observed that considerably more attention has
been given to the latter than the former, and there tends to be an implicit
the basis for attracting cultural producers and sustaining cultural infrastructures.
There are also major issues that arise from the characteristically “hourglass”
structure of the creative industries, with a small number of large employers and a
which means that employment structures in these industries can be highly volatile
(Cunningham, 2005).
When we bring universities into the mix, we need to note a further range of questions that
arise:
• Does the university have a range of teaching activities, and associated student
recruitment strategies, that link to the activities associated with a creative cluster?
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• Does the university prioritize research that links in with the firms, industries and
• Does the university see itself as having a role in developing the local cultural
infrastructure, and enabling its graduates to pursue careers linked to this creative
cluster?
• Does the university see its graduates as being primarily employed in and around
its local catchment area, or are they expected to move elsewhere upon graduation?
What this would indicate is that the relationship of universities to creative clusters is
likely to be very contingent. For those universities that have been located outside of
major urban centers, there would not appear to be much point in seeking to re-badge local
cultural activities as part of a cultural quarter or creative cluster in the hope that this will
be part of redefining the local area as a creative city. Universities located in parts of cities
that are hubs of cultural activity will need to make some strategic decisions. First, there
are arguments against going down the path of being a more applied ‘Mode 2’ university.
Marginson (2006) has argued that globalization and the rise of global ‘league tables’ for
universities mean that those institutions aspiring to global research university status
should not go down the path of applied, locality-based and industry-focused research, as
global research indicators remain largely driven by what can be termed ‘Mode 1’
priorities.
Second, there is a great deal of fluidity within urban spaces for the emergence of creative
respond to. If we take one of the better known recent collaborations between a university
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and a creative movement – the role played by Goldsmiths, University of London in the
rise of the ‘Young British Artists’ of the 1990s and 2000s (Damian Hirst, Tracey Emin
etc.) – it is not apparent that this played much of a role in the development of the South
London area of which Goldsmiths is a part, as the dynamics of developing cultural sites
Finally, universities that see their future development as being linked to creative clusters
will need to make serious commitments to the individuals and sectors involved. There is a
package, and a will to make genuine changes to institutional practice as required. It will
not simply be enough to point to evidence of co-location as proof of a cluster, since the
clusters literature points to real and substantive differences between simple co-location of
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