Ethical distance

An under developed field in cluster and proximity theory is the questions regarding ethics and value. The ethical distance in collaboration seems to be invisible as long as it is relatively low. This would mean that the collaborating parties share trust and value, and keep within the ethical borders the other party adheres to. But should this distance become to large the collaboration becomes almost impossible. In international cooperation it might also cause legal trouble. An example regarding this would be if a company producing a product uses child labor or other forms of unethical labor. This might have legal consequence for any Norwegian business trying to do business with the company. Also on a more personal level, a contact in the firm who produce false estimates and generally can't be trusted, might cause the trust between the businesses to deteriorate. This trust is usually built up over a long stretch of time, and will take even longer to rebuild. Ethics and value share many commonalities with other aspects of distance, and might be seen as a hygiene factor for clusters and similar innovation and knowledge sharing systems.

What I argue is that ethical proximity should be included as a proximity factor or further researched as an aspect in clustering and collaboration.

Is cluster effects culturally or industrially embedded?

One question I have raised after working on understanding clustering and its effects is how can you replicate successes from Silicon Valley and other major clusters. As a Norwegian citizen it seems like we have a much higher barrier for talking to strangers and network then lets say the US where cold calls a quite common. I have noticed the practice of speaking in the elevator or to strangers in cafes also seem to be usual in many countries. Other then being a rather interesting observation I think this can also be linked to why clustering might face different challenges in different countries. People that have been interviewed in my project, which where working in rather big and homogeneous potential clusters, said that they rarely if ever engaged in communication with people from other businesses in their  proximity. And to share any technical challenges or solutions in an informal environment was unthinkable.

This is of course not a representative study, but it seems to me like a pretty accurate description on how we do things in Norway. And for clustering the sharing of knowledge and informal networking is a key for its success.

Also one thing we noticed is the ability to sort of jam your profession in informal arenas. Which led me to think about what kind of businesses that benefited the most. For instance software developers and programmers seems to have a bigger ability to come together and program and develop for fun. The same might be said for entrepreneurs or investors. But what about insurance and law? How much meaningful practice is shared in informal arenas? Much of the information you possesses is classified and the cases embedded in the real life situation. You can't just sit around and jam with other strategists from other firms with the work you do.

This leads me to believe that there are major differences in how to approach clustering for certain industries which I find rather unanswered by the cluster developers and the academic theory around clustering.

My perspective on clustering then versus now

Since the dawn of the clustering and agglomeration era the world have been constantly developing. But until recently the barriers of communication across borders have been a major obstacle for cooperation. Just imagine if for 25-30 years ago you wanted to contact a company that could develop solutions for your company. You would be limited to those you either had in your network or those that where accessible through a limited amount of medias available. The thought of having a not so known company across the other side of the world, in a country where your contracts would be mostly considered null and void if you took them to court, would be unimaginable. Even if you knew about them, and had a way to contact them, you would have no way you could trust them. These issues made the cluster concept very valuable. You would be able to expand your network, develop trust and share experiences with related businesses close to you, who most likely had some of the same issues and problems you had. The lack of reliable ways to check out your foreign partners drove the need to be close.

But lately the definition of clustering seems to get blurred out. You could see this is the articles covering what is known as network clusters where you have clusters communicating with clusters to form international cluster effects. Also clusters in the Norwegian markets include businesses in Stockholm, Sweden as a part of their cluster partners. The purpose of the geographically close knowledge clusters seems to be loosing headway to international cooperation, and there are several reasons it should. Positive effects of global knowledge networking seems to be less lock in effect, bigger markets, larger more specified supplier base  and more diverse knowledge in put. By developing and maintaining international relations with a long time business perspective you might be able to generate some cluster effects and also additional effects for your business.

Are Global Knowledge Networks a form of Cluster 2.0?

Welcome to my attempt on a semi academic blog on businesses strategy.

The first part of my blog will go in depth to what I perceive as the differences to an international cluster network and to the global knowledge network. In this intro I Will try to explain why this is an issue.

To add context to why this should be of interest. One major focus of Norwegian Innovation, a  well funded government program,  is the development of competitive advantage as a nation. One of the tools used to attepmt to accomplish this goal has been to copy the Northern American success story from the Silicon Valley cluster.

Put short the idea of agglomeration economies has been a proven solution to logistical and scale problems. But what they observed in clusters like Silicon Valley where additional effects. This included improved knowledge development, learning and innovation in the participating businesses.

This effect of from geographical uniqueness called clusters have been the talk of the town of late. But it is hard to explain why this effect can't be replicated using other means. Or if it is as simple as clumping businesses together. What I will dive in to in the first part of my blog will be why I basically don't share the enthusiasm for the phenomenon. Especially when seen from the Norwegians perspective.

Sources will be inserted soon.

/S