Working Paper Series in Economics and Institutions of Innovation,
Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies

Abstract: The issue addressed in this paper concerns the emergence and dynamics of a regional cluster in the music industry. Whereas mainstream economic geography models explain agglomeration of existing economic activities, an evolutionary approach is necessary to understand the emergence of genuinely new clusters. Based on an empirical analysis of the major Swedish music cluster, it is shown how cognitive features, the institutional and organizational framework, as well as economic incentives, were interlinked in the process of cluster emergence. A multitude of forces thus coincided in time and space to support the emerging music cluster. A latent knowledge base, language skill and path-dependence all played a significant role. It is also shown how mobile and densely located agents, displaying a high degree of connectivity, together with external impulses through immigrants, contributed to the dynamics and re-vitalization of the Stockholm music cluster.

Keywords: genesis; evolution; dynamics; heterogeneity

JEL-codes: D83; L22; Z11

39 pages, May 9, 2005

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