Abstract: Social Capital, Competitiveness and Internationalization: The Electronics and ICT Cluster of the Basque Country

Santiago López, Jesus M. Valdaliso, Aitziber Elola, and Mari Jose Aranguren

Abstract

The aim of this paper is twofold. First, we present a history-friendly model of the evolution of a successful new high-tech cluster in an old industrialized European region, the Basque Country, from its early origins in the 1950s to the present day. We argue that the clustering firms have sustained their competitiveness on knowledge spillovers and localization economies derived from the geographical proximity of firms and actors; on a supportive environment that fosters firms' productivity, innovation and new business formation; and on the creation of a social capital very favorable to collective learning and cooperation in R&D activities and innovation. The last two factors, in particular, are very region-specific, not easily imitable by other competitors, and sustain the competitive advantage that the electronics and ICT cluster of the Basque Country enjoys today. Second, we attempt to open up the black box of the social dimensions of Michael E. Porter's well-known diamond figure, developing a model that explicitly introduces social capital and knowledge in it. Our framework emphasizes the crucial role that social capital plays in cluster competitiveness, as it promotes collective learning and inter-firm cooperation in R&D activities, human capital formation, and internationalization.