Using Network Analysis to Operationalize, Measure, Analyze, and Describe the Innovative and Dynamic Capacity of Local/Regional Milieu: Results from Pittsburgh

Aspasia Rigopoulou

doi:10.13189/ujm.2017.051201

Abstract

New dynamic city or regional economic environments are characterized by strong relational contexts. These are characterized by the existence of productive supportive local milieus involved in production, organizational and support networks and their intra and inter-network linkages as these relate to a specific industry as well as cooperative strong relations between companies of specific industries, companies and their specific milieu, and their milieu organizations. Research suggests that it is the strength, the cohesion, density, of network relationships, and the embeddedness of all the actors that may be the new predictors of and/or measures of success as these exist in the economically dynamic and innovative environments. This paper, reports on the use of network analysis to operationalize and measure the dynamism of the Pittsburgh economic region as connected with the region's ability to develop, sustain, and expand its software industry. Secondary research, informant interviews, and survey research of 165 software companies and related organizations were used to collect the data and to develop analytical constructs, while the main method of data analysis was network analysis, supplemented with qualitative and descriptive analysis of the local environment. The study documents the existence of a regional milieu that contains many elements and conditions present in dynamic regions. The analysis though showed that the relational context of the elements that constitute the milieu of the software industry were not functionally integrated and that the region lacked the dense and cohesive relational contexts asserted to exist in dynamic environments.

Highlights

The last three decades have stood witness to major shifts, reformulation, and debates of thought and practices surrounding the areas of economics, planning, organizational development, and policy-making as these fields relate to local and regional development.The stagnation of regions with deep-rooted industrial traditions and large industrial concentrations, the diffused development and less than clear-cut spatial patterns and processes of industrial location and organization—conditions that characterized this period—forced policy-makers, planners, and academics to question and reexamine the premises of development theories, paradigms, practices and policies
Based on the degree centrality of actors in the various relational networks, it appears that the main actors that drive the functioning of the milieu in general is a) the group of non-profit high technology organizations composed of the Pittsburgh Technology Council (PTC), the Enterprise Corporation (EC), the Ben Franklin (BF) and b) the Working Together Consortium (WTC), and the Carnegie Mellon University (CMU) entrepreneurial center and central administration
General Conclusions about the Intra-Software Relation/Networks: The results of the network analysis provide evidence to suggest the lack of any significant level of connections between software companies

Summary

Introduction

The last three decades have stood witness to major shifts, reformulation, and debates of thought and practices surrounding the areas of economics, planning, organizational development, and policy-making as these fields relate to local and regional development.The stagnation of regions with deep-rooted industrial traditions and large industrial concentrations, the diffused development and less than clear-cut spatial patterns and processes of industrial location and organization—conditions that characterized this period—forced policy-makers, planners, and academics to question and reexamine the premises of development theories, paradigms, practices and policies. This was observed in the spatial concentrations of small interlinked and specialized clusters of firms, in the location decisions of large firms which under certain conditions appeared to behave differently than those characterizing the branch plant economy model, and in the transformation and renewal of old industrial regions [1, 2, 3, 4] The most important finding to emerge from this massive search for the conditions of success centers on the interface of the local milieu or environment, the network characteristics of the local economic, policy, and other actors, and the technological or organizational innovation of individual firms, i.e., the introduction of new products, processes, and organizational devices [5, 6, 7, 8, 9, 10] This finding acts as the basic premise of the new way of thinking about local and regional development and dynamism

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