Dynamics of Agglomeration and Relational Assets

Abstract

Since the late 1980s, concerned with arguments about the arrival of the “post-fordist” epoch, studies of agglomeration blossomed in the West. In the 1980s, most studies showed that the advantages of agglomeration are external economies, which provide static efficiency with economic actors. In the 1990s, in contrast, the dynamic aspect of agglomeration from the viewpoint of innovation and learning was widely discussed. The latter studies had a common understanding of various relationships within the regional effects of dynamic agglomerations. This paper considers such relationships as the “assets” of economic activity and define the contents of relational assets as the function and nature of “convention.” (Convention functions as a device that coordinates the actions of economic actors.) This paper, based on Storper and Salais's framework of “worlds of production” according to the notion of convention, examines the source of dynamism of the Kojima production area in the garment industry. The result clearly shows that the notion of convention and the framework of “worlds of production” are very useful for the analysis of reality. In the Kojima production area, the relationships and “worlds of production” are complex at first sight. However, through this framework we can classify the “worlds of Production” of Kojima into three types: the “industrial world” and “market world”; the “market world” and “interpersonal world”; and finally the “industrial world.” Moreover, by considering the dimensions of interpretation and representation that constrain the actors' principles of action, this approach can demonstrate the dynamics of the Kojima production area. In Kojima, the three worlds of production are constructed around the “market world.” These worlds have appropriate conventions that coordinate the actors' behavior. Based on such conventions, local relationships become assets, which consequently support the success of the region. Using these frameworks, we can deal with the diversity of the real world and show why certain regions succeed economically.