There is a rather wide literature of agglomeration economies that (especially knowledge intensive) firms gain when clustering in metropolitan areas (e.g. Nicolini, R. 2012 in O'Sullivan: Urban Economics). These economic forces are divided into localization economies and urbanization economies. Former refers to benefits from single industry clustering and the latter to benefits when clustering cross industry boundaries. We wanted to find out some empirical reasons behind location choices of firms and asked some of the reasons from the executives of the firms in surrounding city of Vantaa in Helsinki Metropolitan Area (Merisalo & Kiuru (eds.) 2016). We recognize that the list of the factors is not by any means comprehensive nor is the sample size very large. However, our findings are mainly in line with the literature considering location choices of the firms. From our survey, it seems that the most important factors determining company's location choice are quite practical. Almost all, 93 % of the respondents, saw space costs important or very important factor when choosing their firms' location. Accessibility was important or very important to 89 % and infrastructure of the area to 84 % of the executives. Many studies have stressed the benefits from the labor pool that firms gain in agglomeration economies. Thus, in our survey, the availability of the workforce was seen as the third most important reason for location choices. When asked only from the knowledge intensive business services (KIBS), the availability of the workforce was in fact seen as the joint top factor with 89 %. There's plenty of debate whether urban amenities are important in determining the location of the companies. In our survey 51 % of the companies found restaurants of the neighborhood and 41 % other commercial services of the neighborhood important or very important factors. There are also different views whether firms follow talented workforce or whether employees follow firms. From our survey, it seems that also firms locate in proximity of workforce. We asked also in which spatial scale different factors were seen important; within neighborhood, city or metropolitan area. Workforce was seen largely as a regional resource. Instead, restaurants of the area, were seen most important within the city and within the neighborhood rather than within the whole region. Presence of universities and other research institutes is again regional resource. However, only 36 % of the executives saw them important or very important. Even examining only KIBS firms did not raise the percentage. What is good to know, is that City of Vantaa does not hold any universities. Thus, it may be that presence of universities is more important to those firms that locate in university cities of the HMA. Another reason determining the location choices of the firm is the brand of the area. It was important or very important to 56 % of the firms in Vantaa, but when asked only from the KIBS firms, the percentage rose again. All in all, there are many reasons that affect the location choices of the firms. According to our survey, it seems also that for knowledge intensive firms there are more factors that affect their location choice than for other firms.
Comments
Recently the importance of urban density and agglomeration advantages have seen a remarkable revival in the field of economic geography and urban planning. For example, Emil Malazia et al (2015), have found a correlation between urban density and economic growth in census track areas of Washington, D.C. Also the importance of dense mixed land use is commonly understood as an enabler of healthy and efficient communities (e.g. Musakwa and Niekerk (2013) ,Song and Rodríguez (2005). In our study, we have predicted which areas in Helsinki Metropolitan Region could benefit from more dense and mixed urban structure. Our analysis recognized two zip code areas with huge housing demand: Ruoholahti and Pitäjänmäki in western Helsinki. The areas with second highest housing demand were in Center of the Helsinki, Munkkiniemi, Itä-Pasila, Kaartinkaupunki and Meilahti in western Helsinki as well as Pohjois-Tapiola, Otaniemi, Pohjois-Leppävaara, Etelä-Leppävaara, Niittykumpu and Nihtisilta in eastern Espoo and Oitmäki in western Espoo as well as Kirkonkylä-Veromäki in Vantaa. Areas with highest potential for innovative growth locate mainly between areas’ with demand for housing. Especially the edges of the inner city as well as few subcenters on the ring roads get predictions of higher innovative output than today. Länsi-Pasila, Jätkäsaari and Pikku Huopalahti from Helsinki are on their own class with their innovative potential. Second highest innovative growth is predicted from Helsinki to Kulosaari, Kaitalahti and Kaivopuisto and from Espoo Laajalahti-Friisinmäki from Espoo and from Vantaa the zip code area Jokiniemi.
Global Perspective
Finland has been ranked among one of the most innovative countries throughout the history of such rankings. In their latest Global Competitiveness Report, World Economic Forum assesses Finland as the leader of the world in its capacity to innovate. WEF has measured innovation through seven different indicators. Finland's strength lies especially in education and training system (1st), collaboration between universities and industry (1st) as well as in public and private R&D investments (3rd). National Perspective Helsinki is the capital of Finland and considered as the only metropolitan city region of the country. Helsinki Metropolitan Region is the most developed region in Finland and in terms of relative R&D spending and granted patents it ranks third most innovative region in Finland (Makkonen & Inkinen). In terms of absolute amount of R&D spending and granted patents Helsinki would surely be the most innovative region in Finland. Regional Perspective Considering Helsinki Metropolitan Region is the leading region of the most innovative country in the world, it would be greatly beneficial to study innovations within this city region. That is why I'm going to examine the subject in my PhD thesis from September 2015 on. The most obvious goal is 1) to find out where the clusters of innovation lie in Helsinki Metropolitan Region. The interest is not only to learn if the geography of innovation is multi nodal within city region, but also to investigate 2) if clusters of innovation boost economic development. Inspiration for these questions comes from findings of nationwide research by Makkonen & Inkinen. The latter part of the thesis discusses the platforms that generate innovation. Assumed sources for local innovation growth are 3) human capital (i.e. educated workforce), 4) regional prosperity (i.e. universities and other public institutions) as well as 5) infrastructure (i.e. accessibility, level of urbanization). The spatial clusters of each three seedbed will be examined by advanced quantitative methods as well as their correlation with the level of cluster's innovation. Methods and indicators that will be used are going to be the topics of my next blog posts. If the topic hooked You, You might want to go and visit my Facebook and Twitter accounts and click 'Like'. |
Photo by Rob Hurson
Categories
All
Archives
July 2018
AuthorJuho Kiuru, geographer living in Helsinki, Finland. |