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

Abstract: Large media clusters have emerged in a limited number of large cities, characterizing the geographical concentration of the global media industry. This paper explores the reasons behind the localization patterns of media industries, the effect of the rapid advancement of Information and Communication Technologies (ICT) on media clusters and the role of media cluster policies. One might draw the conclusion that with the developments of the ICT sector and the fact that there are no raw materials or physical goods that should be transported in the media industry; media firms could locate anywhere and the urban regions would no longer host any clusters of media firms. Various reasons are provided as to why strong tendencies of media firms to cluster in large cities should still be expected and why media clusters differ from other clusters. The paper concludes that it is the type and form of interaction and transactions that matter and new communication technologies are mainly compliments to the still essential face-to-face interaction in the media industry. Policy makers have promoted agglomeration in both large and small cities since they have recognized that some media industries are encouraging economic growth and employment creation. Approaches to cluster governance and motivations for cluster policies are highlighted in the paper. Furthermore, different topics of future research challenges connected to media clusters are presented.

Keywords: Clustering; media industry; media cluster policies; creative industry; Information and Communication Technology; Weightless Economy; regional development; agglomeration

JEL-codes: R11; R58

31 pages, March 24, 2011

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