Cluster renewal and the heterogeneity of extra-regional linkages: A study of mnc practices in a subsea petroleum cluster

Abstract

The cluster literature in general and evolutionary economic geography in particular emphasizes the importance of extra-regional linkages for cluster evolution. However, the literature does so without necessarily nuancing the content, i.e., heterogeneity, of such linkages. We argue that treating extra-regional linkages as homogeneous hampers an important aspect of cluster renewal; namely, that it is context specific and dependent upon the diversified practices of the involved multinational companies (MNCs). In so doing, we also argue that relational approaches to economic geography offer an important insight into the evolutionary perspective. We investigate one of Norway’s strongest and most dynamic industry clusters, the subsea cluster in Hordaland county, and discuss the usefulness of combining relational and evolutionary understandings in analytical frameworks that address cluster renewal. This study shows that the practice of regional firms that internationalize (labelled MNC out) and foreign-owned MNCs coming into the cluster (MNC in) contribute in different ways to renewal of the cluster. We find that the practices of MNC out contribute to further specialization of the cluster, whereas the practices of MNC in contribute to diversification of economic activities. Both types of extra-regional linkages are important for renewal of the cluster, as they together represent a mix between continuation and change of existing activities. Necessarily, such interplays between MNC practices and cluster evolution pan out differently in different contexts, but we argue that the literature should acknowledge that extra-regional linkages are heterogeneous and contribute differently to cluster evolution in general and renewal in particular.