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Urban Patterns of Growth

The Geography of Suppliers of High-Tech Companies in the Nordic Countries

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Urban Patterns of Growth was carried out for the preparation of the Nordic regional policy co-operation programme 2013-2016 and national regional policies in the Nordic countries. A key issue is the concentration of economic growth in the largest cities. This is favored by urbanization economies but also by the forming of specialized international networks of innovation and production established far beyond regional and national borders. Much research has focused upon these new global networks, leaving behind the question of the national spreading effects of the production that has not been outsourced. The purpose of this study, therefore, is to elucidate, via case studies, the extent to which the purchases of supplies and services from knowledge firms are located in proximity of the company or whether these purchases have spread to the remaining part of the country.

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Main Findings

The importance of proximity depends upon the geographic level of supplier relations. At the national level, supplier relations are clearly influenced by geographic proximity. Whenever alternative suppliers are available at the national level, companies tend to choose and build up relations in the home region of the production plant. Supplier relations at international level, however, are dominated by parameters other than geographical proximity. Usually, international supplies involve special components and materials of key importance for the quality and competiveness of the final products. They must be acquired from key suppliers wherever they are located, either in country or abroad. For this kind of supply, the decisive parameter is “quality” rather than “proximity.”

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