Clustering policy for urban competitiveness: One‐size‐fits‐all? Evidence from Tehran

Abstract

Urban competitiveness is commonly attributed to necessitating particular types of socio‐spatial frameworks such as clustering on the basis of models of Marshall–Arrow–Romer (MAR), Porter, or Jacobs, since proximity is known as a key perquisite for knowledge spillover, innovation, and hence urban competitiveness. Nevertheless, it is unjustifiable to unconditionally endorse the ‘clustering’ policy. Consequently, this research aims to examine the spatiality and geography of competition and innovation contingent upon varying spatial prerequisites and contextual circumstances. In this regard, two questions have been raised: under what circumstances urban competitiveness depends on spatial agglomeration, and whether this agglomeration follows a clustering development pattern. Through the implementation of a causal research design utilizing both in‐depth interviews and social survey methodology, this study has determined the innovative characteristics and techniques for knowledge acquisition, as well as spatial behaviors and preferences of competitive industries located within Tehran. The spatially constrained multivariate clustering method was employed to group competitive industries according to their distinct substantive dissimilarities, socio‐spatial behaviors, and characteristics. Then, on the basis of the structural equation modeling, the most appropriate spatial development frameworks of competitiveness were extracted with regard to the specific conditions of Tehran. Findings show that innovation, and hence competitiveness, are not always the result of clustering; clusters, as a spatial policy‐making tool, have been found to be highly conducive to collaborative and intensive knowledge production, as they provide access to spillover knowledge, thereby increasing competitiveness. Despite complex economic dependencies and collaborations, some competitive industries have greater mobility and are footloose due to their Schumpeterian linear knowledge source and virtual nature. What matters for this elusive, light, fluid category free from the shackles of place is institutional and organizational proximity, which proves its conditions are up to the government. As the main finding of the research, the geography and spatiality of innovation, and therefore the competitiveness, depend on two factors, including: (a) the relationships and interactions, that is, types of activity units and (b) the source and method of acquiring knowledge required for innovation and competitive advantage. In some activities, on the basis of their knowledge intensity, interaction type, and knowledge source, competitiveness is not related to clusters; in others, it depends on a specific location; and some are independent of location.