University of Kiel, Germany Evolutionary Economic Geography, B.Sc. Geography Video: https://youtu.be/vxSX4rrg864

1. Lecture 1 - Introduction: economic geography and its recent paradigms
Evolutionary
Economic
Geography
Summer
Semester
2021
9th lecture
25/05/2021

2. 8) 20-05: Strategic Thinking in Regional Development, Strategic
Spatial Planning and Regional Attractiveness (google drive for
recordings)
9) 25-05 (Tuesday): Recap > Corporate Spatial Responsibility, and
Strategic Coupling (Global Value Chains, GVC today or next)
10) 27-05 (Thursday): Conceptualisation, Design and
Implementation of Smart Specialisation Strategies in Today’s
Globalized World
11) 01-06 (Tuesday): New Directions in Economic Geography:
Classic versus Alternatives Concepts and Practices of Economic
Growth and Regional Development
Lectures, April, May, June 2021
Tuesday, 10:15 – 11:45 | Thursday, 10:15 – 11:45
OLAT

3. Recap > Focal points of strategic spatial
planning > bridge to economic geography
(Oliveira, 2016)
Strategic
spatial planning
Place branding
Place-based
marketing
Investment
attractions
strategies
 Path creation
 Industrial
renewal
 Socioeconomic
transformation
Constructing
regional
advantage
 Regional Resilience
 Ideal location for
economic activities

4. Cities, urban regions or metropolitan areas have become central to
support socioeconomic transformation >
To address economic, social and environmental issues > strategic
spatial planning has been increasingly undertaken by local
governments in Europe and worldwide since the 1990s.
Take-home message > role of urban regions
Key consideration > long-term
The common objective of SSP has been the identification of a
coherent > long-term (15/20/50 years) > spatial development
strategy to frame the development of urban regions, in connection
with specific strategic territorial development projects.
(Hersperger et al. 2019)
Recap
Strategic spatial planning processes

5. Strategic spatial planning is a public-sector-led socio-spatial process
through which a vision, actions, and means for implementation are
produced that shape and frame what a place is and may become.
Common definition > public-led (Albrechts 2004)
 It has to take a critical view of the environment;
 It studies the external trends, forces and resources available;
 It identifies and gathers major stakeholders (public and private);
 It allows for a broad multilevel governance and diverse (public, economic,
civil society) involvement during the planning process;
 It develops a long-term vision or perspective and strategies at different
levels, taking into account the power structures;
 It designs plan-making for influencing and managing spatial change;
 It incorporates monitoring, feedback, and revision > action plans
Recap
Strategic spatial planning processes

6. In-depth case study + participatory research in 21 European urban regions
Plan-making phase Plan-implementation phase
How strategic spatial planning contributes to
the development of urban regions
Oliveira and Hersperger, 2018; Hersperger et al., 2019).
Economic landscape
Participation of economic actors

7. Strategic spatial-plan making phase
(Hersperger et al., 2019).
Economic
players
Interest groups (private)

8. Plan-making phase > Eco Geo
(Oliveira et al 2018)
Copenhagen
Helsinki
Stockholm
Oslo
Economic renewal
Socioeconomic
transformation

9. Example: The Finger Plan of Copenhagen
consolidated planning practice
1947 2015

10. SSP > Eco Geo > Sustainability
(Source)
The Greater Copenhagen area is divided
into four geographical areas:
1) the core urban region,
2) the peripheral region > the city fingers
3) the green wedges, and
4) the rest of the Greater Copenhagen
Cities and green
wedges
Cities and transport
infrastructure
The right business in the right
place

11. Finger plan > Bicycle Strategy Plan

12. SSP > Eco Geo > Attractiveness
Urban regions are in competition; therefore, organisations representing
business interests are likely to want the ‘competitiveness’ or the
‘attractiveness’ of the urban region to be high(est) on the agenda.
Investment/business
attractiveness
Attract workforce/
knowledge workers
Attract cultural events/
sports activities
The Portland metropolitan area
Goal 2: Sustain Economic Competitiveness and
Prosperity
Improving multi-modal transportation
infrastructure and services support the region’s
well-being and a diverse, innovative, sustainable
and growing regional and state economy.
Objective 2.5 Job Retention and Creation
Attract new businesses and family-wage jobs and
retain those that are already located in the region.

13. SSP > Eco Geo > Attractiveness
Source
Source
Critiques > neo-liberal planning
Housing affordability e.g.

14. How they do it
Place-based or regional branding strategies
(Oliveira, 2016)
Leverage on the quality and distinctiveness of urban features/regional
qualities (quality of infrastructures; connectivity; housing), cultural
assets and landscape amenities (green areas; recreational spaces) (e.g.
Boisen et al., 2017).
Place branding, as a governance instrument, is thought to support the
promotion and strategic positioning of countries, cities and regions
with objectives of attracting businesses and people (e.g. Kavaratzis et al., 2015).

15. Summary

16. Corporate Responsibility
Evolutionary Economic Geography
Social & Spatial

17. Evolutionary Economic Geography

18. Corporate Social
Responsibility
Corporate Spatial or
Regional Responsibility
Corporate Responsibility >
geographical approach
Clark et al 2018 Knieling et al 2012
Enterprises and business associations
increasingly influence spatial
development policies > strategic
spatial planning (eg)
Strategic entrepreneurial decisions
encompassing urban or city-regional
contexts as well as issues not linked to
a corporate’s business
Spatial involvement of enterprises /
firms in local or regional contexts
Enterprises only pursue social and
spatial approaches, if those are not
contradicting corporate goals
Involves a greater integration of
responsibility towards workers,
customers, communities, and natural
environments into core business
Strict compliance with labour and
environmental codes of practice
As a response to anti-corporate
campaigning and critical journalism >
introduce corporate responsibility
programs, which address the impacts
of their business on
 Social groups and
 The natural environment

19. But first the non-geographical approach
Corporate Social Responsibility > Business approach
Also known as:
 Corporate Citizenship
 Corporate Responsibility
 Responsible Business
Business advantages:
 Human Resources > Recruitment, retention and improve spirits of Employees
 Risk Management > Investment in ‘ethical brand equity’
 Brand Differentiation > Build brand loyalty
> Reputation and brand attractiveness
‘Greenwashing’ effect
Take-home message > critique
(Lyon and Montgomery, 2013)

20. Geographers have succeeded in putting corporate responsibility in its place
– by examining the interplay of different scales of activity and the appropriate
balance between market mechanisms and other means of achieving local
economic development, environmental protection, and other goals – (in face of
financial scarcity)
(Hamilton, 2011; Jussila et al 2007)
Take-home message
Key consideration
Regional responsibility means
the utilization of the region’s
resources and advocacy of
local interests.
Aligns previous lectures
 Innovation policies
 Place-based approach
 Territorial governance
 Strategic spatial planning
(mainly implementation)
Corporate Spatial / Regional Responsibility
Geographical approach

21. Corporate Spatial or Regional Responsibility
Take-home definition > firm – region dynamics
Regional responsibility may be defined in terms of firms’ active
participation in regional strategy processes, and local and regional
economic development (L&RED) (cf. Carroll, 1979).
A firm may be able to gain access to critical regional resources, such as
knowledge of the operational environment, customer loyalty and
(business) locations (Wernefelt, 1984; Hart, 1995) and, at the same time,
secure its future position and source of competitive advantage (Hamel
and Prahalad, 1994).
The relationship between firms and their regions is reciprocal not only in
terms of economic exchange; firms derive some of their characteristics
from and also directly influence the characteristics of specific regions or
small- medium-size towns.
(Hamilton, 2011; Jussila et al 2007)

22. Social Responsibility Spatial Responsibility
Summary before examples
Clark et al 2018 Knieling et al 2012
Enterprises and business associations
increasingly influence spatial
development policies or strategies
 Infrastructures
 Social housing
 Place-making interventions
Strategic entrepreneurial decisions
are not only focused on issues which
are directly related to the enterprise’s
divisions but encompassing urban or
city-regional contexts
Yet, there is a lack of empirical studies
underlining approaches
Few examples in Germany and
Nordic countries
Voluntary integration of some kind of
responsibility towards
 Employees,
 Customers,
 Nature > into core business of firms
To “please” shareholders, possible
investors and costumers
> Greenwashing effect
Sustainability standards aiming at
turning global supply chains towards
community-focused and reduce their
environmental footprint
 Coffee
 Beef > forest clearance
 Soybeans, crops

23. Corporate Spatial Responsibility >
Initiative Ruhr GmbH
Corporate Spatial or Regional Responsibility > The term "spatial" means a
spatial commitment > voluntary > towards a city or a region.
Initiative Ruhr GmbH (DE)
 Pursuing the goal of structural change in
the Ruhr for over 25 years
 Involves +67 organizations
 Focused on
 Energy
 Logistics
 Education
 Culture
 Projects that are often aimed at citizens
or the promotion of the regional
economy > environmental dimension
 Enterprises involved > make a voluntary
financial contribution to the overall
plans of the Initiative
InnovationCity Ruhr
Ruhr Piano Festival
The Ruhr cities are, from west to
east: Duisburg, Oberhausen, Bottrop, Mülheim an der
Ruhr, Essen, Gelsenkirchen, Bochum, Herne, Hagen,
Dortmund, Lünen, Bergkamen, Hamm and the districts
of Wesel, Recklinghausen, Unna and Ennepe-Ruhr-Kreis.
The most populous cities are Dortmund, Essen and
Duisburg
(Schiek 2016)

24. Corporate Spatial Responsibility >
Die Wirtschaftsinitiative Frankfurt Rhein Main
Focused in attracting investment (and workforce) +++ valuing local
resources and assets
Wirtschaftsinitiative FrankfurtRheinMain (DE)
 Corporate Spatial Responsibility
cooperative that sees itself as a ‘lobby
association for the metropolitan
region FRM’, which aims to create an
attractive economic area to shape
the conditions for the residents and
companies
 Boost regional identity an sense of
belonging to the region
 More passive role if compared to
Ruhr Initiative >
 Firms/companies participate
mainly by paying membership
fees
(Schiek 2016)

25. Corporate Spatial Responsibility (CSR) >
Conclusions
Take-home message
Key consideration
From an economic geographic point of view CSR is seen as a strategic
investment in a territory e.g. region; metropolitan area > generating
repercussions in terms of regional competitiveness and quality of life.
Private entities, firms, corporations often associated in networks or
cooperatives take responsibility for urban and regional development
and how a region or metropolitan area will developed in future
Investment
attraction
Infrastructure
improvement
Respect
standards;
SDGs

26. Literature
OLAT > J_25-05 - Lect. 9 - Corporate Spatial Responsibility Strategic Coupling etc

27. Evolutionary Economic Geography

28. Strategic coupling and
regional development
OLAT > 00 - Extra literature (maybe
relevant for your essay or other
courses)

29. Background
 How do multinational corporations (MNCs)—essential
organizations in the international economic system today—
become successfully embedded in local economies and grow into
global companies?
 How does a global financial crisis impact the international
division of labor and industrial landscape?

30. Strategic coupling and
regional development
Strategic coupling refers to the interaction and
integration between multinational corporations’
embeddedness and local industrial networks, which
results in the creation of connections between the two
and a complete network of industrial ecosystem.
Interaction
and
integration
MacKinnon 2012
(MNCs)

31. Strategic coupling > 3 features
 First, cluster.
 Multinational corporations and a large number of firms and
supporting institutions are spatially agglomerated and maintain
a long-term, cooperative relationship marked by
complementarity, thus gaining competitive advantages.
 Second, high-end industry chain.
 The interactions between MNCs and local industrial networks
eventually lead local industries to the high end of the value
chain.
 Third, symbiotic cooperation.
 MNCs and local industries together form an industrial value
network in which member firms have shared interests and
evolve at the same time for win-win outcomes.
In strategic coupling > there are strong linkages between
multinational corporations (MNCs) and local economy:

32. Strategic coupling > example
Source + OLAT
 Siemens Healthineers’ embeddedness strategy is in line with China’s policy
of reform and opening-up and healthcare reform.
 As far as the division of labor is concerned, embeddedness starts with sales
and services and then expands to local production, procurement, R&D, and
brand management, spreading from sales and production activities to R&D
centers, service centers, and regional operation headquarters.
 Local production embeddedness starts with labor-intensive activities and
expands to capital- and technology-intensive activities.
 Local R&D embeddedness begins with low value-added activities and expands
to high-value-added activities.
Headquartered in Erlangen, Germany

33. Analytical framework of Siemens healthcare sector’s
embeddedness in China.
Embeddedness in local economy (China) evolved through time

34. Siemens
Healthineers’
embeddedness
process in China
High-value-added activities
Deeper spatial embeddedness
In 2006, the Chinese government officially
launched the new healthcare reform.

35. Siemens Healthineers’ embeddedness
process in China
Strategic Coupling Phase (2006) > present
 In 2007, the State Food and Drug Administration
revised the Regulations on the Supervision and
Administration of Medical Devices and the
Ministry of Health issued the Notice on Further
Strengthening the Management of the
Centralized Procurement of Medical Devices.
 In the new healthcare plan introduced in 2009,
one of the major tasks was to “improve the
public health system, medical service system,
medical support system, and drug supply system
to build a basic healthcare system covering both
urban and rural residents.”
 The government also underscored basic
healthcare in the 12th Five-Year Plan (strategic
planning).
State intervention paving the way
 In 2006, Siemens Healthineers entered
the strategic coupling phase in China,
which was in line with China’s healthcare
reform and Siemens’s embeddedness
strategy in China.
 In 2011, the first year of the 12th Five-
Year Plan period, Siemens signed a
memorandum of understanding with the
National Development and Reform
Commission (NDRC) of China to renew
its comprehensive cooperation,
continuing the historic partnership
established in 1985, and paving the way
for both sides to achieve sustainable
development in the future.

36.  Through strategic coupling, on the one hand, Siemens Healthineers has
achieved ultra-high-speed growth in China.
 From 2010 to 2012, it was ranked the most competitive medical device
company in the field of radiology for 3 consecutive years.
 It has contributed to the rapid development of China’s medical device
industry and the fast growth in medical device exports.
 At present, about 70% of SSME’s products are exported to foreign
countries; 85% of SHIL’s products are sold all over the world; about 90% of
the Magnetom Essenza MRI systems produced by SSMR are exported to
international markets.
 80% of the components of Siemens’s medical devices manufactured in
China are from China, and the growing number of key components
developed and manufactured in China serves as a perfect illustration of
how deeply Siemens Healthineers is embedded in China.
Siemens Healthineers’ embeddedness
process in China
Strategic Coupling Phase (2006) > Results

37. Evolution of Huawei’s Embeddedness in Europe
Headquartered
in Shenzhen,
Guangdong.
 Strategically, Huawei’s embeddedness in Europe has
been pushed forward in four phases,
 Exploratory embeddedness (1996-2000),
 Strategic linkage (2001-2004),
 Strategic embeddedness (2005-2010), and
 Strategic coupling (2011 up to now).
 Huawei started from lower end customers in a
specific market and gradually turned to large-
and medium-sized enterprises.
 Huawei started from less-challenging markets
in Eastern Europe to more challenging ones in
Central Southern, Western, and Northern
Europe.

38. Evolution of Huawei’s Embeddedness in Europe
1996 – present

39. Evolution of Huawei’s Embeddedness in Europe
Huawei started its path into Europe from Russia. It set up its Moscow Office in
1996. However, there was no order at all in the next 4 years. In 2000, Huawei made
its breakthrough on the Russian market by successfully sealing contracts for
Uralsvyazinform’s switch project and Moscow Mobile TeleSystems’s (MTS) mobile
network contracts. In the same year, Huawei established an R&D center in
Stockholm, Sweden, to enhance the company’s core competence
Guo Ping, deputy chairman of Huawei, with the head of the Russian cellphone carrier MTS,
Alexei Kornya, at the Kremlin in Moscow. Behind them are the Chinese and Russian leaders, Xi
Xinping, left, and Vladimir V. Putin.Credit...Pool photo by Alexander Zemlianichenko
Source 2019

40. Evolution of Huawei’s Embeddedness in Europe
Strategic Embeddedness Phase between 2005 and 2010
 Huawei signed in 2005 with Vodafone a Global Framework Agreement, as
Vodafone’s preferred telecom equipment supplier.
 In the same year, Huawei was selected as a preferred 21CN supplier by British
Telecom, supplying BT’s 21CN with multiservice network access (MSAN)
components and optical transmission equipment.
 In 2006, Huawei Austria was established.
 Huawei signed with Vodafone a strategic cooperation agreement for 3G handsets
in 2006, and in 2007, won Vodafone’s “2007 Global Supplier Award,” the only
network equipment supplier to be awarded this specific accolade.
 Also in 2007, Huawei established a joint venture with Global Marine, providing
end-to-end submarine network solutions.
 By the end of 2007, Huawei’s core communication equipment was adopted by all
the major carriers in Europe and Huawei became a partner to all the top carriers
in Europe.
 Huawei European Research Institute was established in 2008, headquartered in
Munich, Germany.
 In 2010, an R&D center was set up in Istanbul and the Cyber Security Evaluation
Center (CSEC) established in Britain.

41. Evolution of Huawei’s Embeddedness in Europe
Huawei has made strategic coupling in Europe since 2011.
 On the 10th anniversary of its entry into European markets, Huawei announced
its intention to make Europe its second homeland and become a “European
company” by investing more and getting more open-minded.
 The company began its strategic coupling in Europe. With ever-deepening two-
way economic, technical, social, cultural, and institutional embeddedness,
Huawei created in Europe “glocalized” R&D, production and operations, and
 marketing and service networks.
 Huawei and customers, suppliers, and sub-suppliers share the same business
ecosystem that thrives on shared success, so that all values generated in
networks are shared with customers around the globe and the industry
ecosystem sees a sound and sustainable development.
Huawei intended to lay a foundation for its globalized survival, with a
globalized business pattern.

42. Evolution of Huawei’s Embeddedness in Europe
 In 2012, Huawei stepped up investments in Britain and
established a new R&D center in Finland.
 In 2013, Huawei set up in London to manage global financial
risks and ensure that its financial operations remain efficient,
secure, and standard-compliant.
 Huawei’s European Logistics Center was put into official
operation in Hungary
 Huawei’s sales revenue in Europe reached USD 5.23 billion in
2013, an increase of 25% year-on-year.
 The company has at least 10% of its sales revenue put in R&D
each year. It input USD 19.4 billion in R&D between 2000 and
2012.
Huawei has made strategic coupling in Europe since 2011.
 Local procurement has boosted local employment and development, and
deepened technical and innovation exchanges between enterprises, so that
they all see enhanced competence.

43. A Comparison Between GPNs of Siemens and Huawei From the
Perspective of Embeddedness
Greater contributions to local industrial agglomeration; advancing
reform and innovation in China’s industrial system
Introducing technology, getting embedded in local
industry; little impact on institutional changes

44. When complementary effect exists between regions and global production networks
(multinational corporations), a developmental process of strategic coupling will take place
through which the advantages of regions interact positively with the strategic needs of actors in
these global production networks.
Key regional assets include the presence of prestigious research universities, the availability
of pools of skilled labour and an attractive residential environment for creative workers

45. Strategic coupling > summary
 First, it is strategic in that it needs intentional and active intervention on the
part of both regional institutions and powerful global production network
actors to occur.
 Second, it is time–space contingent (dependent), as it is subject to change and
is a temporary coalition between local and non-local actors.
 Third, it transcends territorial boundaries as actors from different spatial
scales interact.
Many of the key strategic decisions that determine
the nature of coupling within a particular region are
taken outside its bounds by actors associated with
other spatial scales (for example, national, global).
:::phases of decoupling and subsequent recoupling:::

46. Strategic coupling > Evolutionary perspectives
 Strategic coupling can be viewed in evolutionary terms, suggesting that
regional institutions’ capacities to bargain with Trans National Corporations
(TNCs)/Multinational corporations will reflect the legacy of previous
strategies and forms of investment.
 Evolutionary processes related to strategic coupling have accelerated through
the growth of time-based competition, with the shortening of FDI project life
cycles leaving regions more exposed to the intensified mobility of capital
(Dawley, 2011).
:::phases of decoupling and subsequent recoupling:::
 Prominent regional ‘hotspots’ in the economic geography literature include Silicon
Valley, the Boston region, Cambridge (UK), the so-called ‘Third Italy and Baden-
Württemberg’ (Saxenian, 1994, 2006; Bathelt, 2001; Huggins, 2008).
 Accounts of the development of such regions have emphasized their endogenous
dynamism rather than exogenous linkages (though see Markusen, 1999; Huggins,
2008), generating high rates of innovation and entrepreneurship and supported by
overlapping social and business networks.
Strategic coupling? > Entrepreneurial regions > Endogenous

47. Strategic coupling > Evolutionary perspectives
AnnaLee Saxenian
Regional Advantage: Culture and Competition in Silicon Valley
and Route 128
One argument
Explains the continued success of the former as a product of
cooperative networking arrangements which promote
flexibility and collaborative learning, while the vertical
integration of the latter, associated with the dominance of
large firms, resulted in relative decline.
Counterargument
Silicon Valley is itself the birthplace of many renowned TNCs
in the electronics and computing industries with firms such
as Fairchild, Intel and National Semiconductors generating a
number of subsequent spin-offs. As such, these dynamic
growth regions can be seen as generator regions for GPNs
(TNCs dominate), spawning a variety of lead firms which
tend to retain their headquarters there.
Small size firms = success
Small size firms = TNCs

48. Evolutionary Economic Geography

49. Lecture 1 - Introduction: economic geography and its recent paradigms
Thank you
Questions?
See you 27-05 (Thursday): Conceptualisation,
Design and Implementation of Smart
Specialisation Strategies in Today’s Globalized
World (OLAT / Zoom)
Evolutionary Economic Geography