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By Martin Johanson, Heléne Lundberg

In lots of areas the current focus of the state is to initiate and stimulate the emergence of inter-firm networks which will produce development. This booklet takes a administration viewpoint at the operations and techniques in those networks and describes and analyzes how and why geographical proximity influences inter-firm networks.

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Extra resources for Network Strategies for Regional Growth

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S. Ring, ‘Formation Processes of R&D Consortia: Which Path to Take? ’, Strategic Management Journal, 21 (2000): 239–66. M. Enright, ‘Regional Clusters and Economic Development: A Research Agenda’, in U. Staber, N. Schaefer, and B. Sharma (eds), Business Networks: Prospects for Regional Development (Berlin: Walter de Gruyter, 1996). D. Ford, ‘The Development of Buyer–Seller Relationships in Industrial Markets’, in D. ), Understanding Business Marketing and Purchasingg (London: Thomson Learning, 2002).

Not crowding out private initiative A first challenge lies in avoiding the risk that publicly funded initiatives may crowd out private financing – the risk that public financing simply replaces private financing of projects that would have taken place anyway. Such crowding out of private financing is a concern because such an addition of public resources achieves no additional development effects but may introduce new administrative problems for both firms and governmental agencies. Empirical evidence on crowding out is ambiguous (David et al.

A critical claim made in the argument is that it is possible to demonstrate meaningful regional development in incremental steps, similar to how software is delivered in blocks of functionality. Although it would be possible to use an agile approach even when the above criteria are not met, the advantages decrease with decreasing complexity. The disadvantages may be more obvious in simple projects. For example, an agile approach makes it more difficult to conduct centralized, long-term planning and budgeting.

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