Path dependence and cluster adaptation: a case study of Toronto's new media industry
by John N.H. Britton
International Journal of Entrepreneurship and Innovation Management (IJEIM), Vol. 7, No. 2/3/4/5, 2007

Abstract: The new media cluster in Toronto, Canada has at least 600 firms and collectively they are of national and international significance. In this paper, I establish a research agenda by reviewing the theory of industrial clusters, as it applies to the circulation of knowledge, including ideas about path dependence and their connection with cluster theory. I apply both sets of ideas to the Toronto case. In the absence of official statistical data, I use an employment database to establish the size distribution of firms and to map and explain the spatial distribution of new media in the metropolitan region – a pattern that is highly concentrated in the central area. I use information from interviews with over 50 businesses to evaluate how new media firms in Toronto conform to the cluster model. This paper examines two propositions about Toronto's new media development. Firstly, it argues that many new media products and the skills used in their design reflect the developmental trajectory of antecedent activities, especially those related to services for the entertainment sector and the local business market. Secondly, this paper examines the way the new media cluster has demonstrated adaptive strengths in response to the disruptive market shocks of 2001, though without public sector assistance. This paper concludes that to understand learning processes, even in the short run, the dynamic analysis of clusters is a necessary research strategy.

Online publication date: Wed, 21-Mar-2007

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