Assessing The Impact Of Local Government On The Innovativeness And Durability Of Domestic Appliance Industry Clusters

Industry clusters which form as a result of open ‘windows of locational opportunity’ have long been the topic of academic research. It is a process whereby the particular features of a region coalesce with a breakthrough innovation and give rise to new industries which often require completely new supporting institutions. But what happens when the window does not open spontaneously, and is instead forced open by government directives? This paper looks at two different domestic appliance industry clusters, one located in Newton, IA and the other in Qingdao and compares first the causal factors behind the development of each cluster and second, the evolution of each cluster over time. Today the Newton cluster has all but disappeared while the Qingdao cluster continues to evolve and develop. A major objective of this paper is to explain the different outcome of these two clusters. While doing so it also seeks to examine how the different paths of development i.e., spontaneous versus government directed affect the innovation and durability of the cluster.