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Trade Fairs as Temporary Clusters in Europe?

Term Paper (Advanced seminar) 2011 15 Pages

Geography / Earth Science - Economic Geography

Excerpt

OUTLINE

TABLE OF FIGURES

TABLE OF CONTENTS

1. Introduction

2. Trade Fairs

3. Temporary Clusters
3.1 Structure
3.2 Local Buzz
3.3 Pipelines

4. Trade Fairs as Temporary Clusters
4.1 Structure
4.2 Information and Knowledge Creation
4.2.1 Monitoring and Comparing
4.2.2 Buzz and Global Pipelines

5. Implications for the European Economy

6. Conclusion

Bibliography

TABLE OF FIGURES

Figure 1: Types of Trade Fairs

Figure 2: Pipeline Creation through International Trade Fairs

1. Introduction

In our globalized world trade fairs are important events for firms to communicate and/or sell their products and services to a global audience. But besides this original aim of trade fairs, scientists go further and focus on the effects, which these temporary and spatial accumulations of professionals from the same or equal industries might have. According to that, a particular focus lies on inter-organizational learning processes, like they can be found in clusters. Thus, the central question of this report derives, whether in the European context trade fairs can be seen as temporary clusters, which would imply that trade fairs became central nodes connecting global economy.

This issue is important, since both participating in trade fairs and searching for adequate interaction partners are costly and time intensive processes. If trade fairs provided equal benefits as temporary clusters, organizing and participating entities would expend more effort on planning and conducting the time before, during and after the trade fair. Apparently, benefiting from new knowledge pools is at least an important aspect in times of increasing innovation velocity.[1]

Finding a clear answer for the problem is not trivial, since the majority of available literature focuses on trade fairs in the context of a communication instrument in firm’s marketing mix. Furthermore there are difficulties to maintain a particular focus on Europe, since globalized world economy meets on international flagship trade fairs. Another aspect is the difficulty of measuring qualitative and quantifiable effects of spatial proximity in clusters, which additionally could be implemented to compare different forms of temporary clusters.

At the outset this report provides an overview about the concepts of trade fairs and temporary clusters. Further, it focuses on the comparison of essential characteristics between these organizational structures. Especially the general structure and the matter of how information and knowledge is created will be observed. Subsequently, brief implications for the European Economy are revealed. Finally, in the conclusion, this report gives an adequate answer to the initial question to what extent trade fairs can be seen as temporary clusters in Europe.

2. Trade Fairs

According to the Association of the German Trade Fair Industry, a trade fair is defined as a temporally limited, recurrent market event on which a plurality of companies exhibits the essential offer of at least one economic sector and distributes predominantly by sample to commercial consumers.[2] Trade fairs create a special environment where geographical proximity and face-to-face contact enable members of an industry to exchange information and to learn about new developments concerning markets, products and innovations.[3] [4]

Trade fairs can be differentiated with respect to two attributes (Figure 1). These are on the one hand the trade fair’s geographic coverage and on the other hand the trade fair’s market coverage.

illustration not visible in this excerpt

Figure 1: Types of Trade Fairs (Source: Bello/Barczak, 1990, S. 51)

The geographic coverage refers to the attendees’ travel distance to the trade fair. In terms of a regional trade fair, almost half of the attendees travel less than 50 miles, while the majority of a national trade fair overcomes a distance of more than 400 miles. Since the typology bases on the huge geographical dimensions of the USA and regarding the European context of this report, the characteristics behind the concept of “national trade fairs” are also valid for “international trade fairs”.

Further, the unequal travelling requirements reason a different mix of professional groups between the two types of trade fairs. Regional trade fairs draw a variety of low-level operating personnel, mostly working in technical jobs. This relation is reversed for national trade fairs, where a higher percentage of senior managers working in professional job functions can be observed. Regarding the market coverage, trade fairs considered as vertical are characterized by a single industry with one specialized focus. Besides top managers, this kind of trade fair also draws low-level managers and blue-collar workers. Horizontal trade fairs have the distinction of being focussed on a multitude of unrelated industries. The attendees of those trade fairs reflect a high percentage of top-level managers, who typically have procurement functions as e.g. selecting new suppliers.[5]

3. Temporary Clusters

The concept of a cluster was introduced by Porter and defines it as a geographic and sectoral concentration of interconnected companies and institutions. Further clusters often extend downstream to channels, customers and sideways to complementary producers and to companies in, by technologies or common inputs, related industries.[6] Additionally, governmental and other institutions can be implied in clusters and thus provide specialized support for different fields like education, information, research or technique. Thus clusters are furthermore characterized by spatial proximity generating local knowledge spill-overs, leading to competitive advantages for the co-located firms.[7] [8] The difference between a temporary cluster and a permanent cluster is, besides the limited time horizon of a temporary cluster, its intensified form. Hence, Maskell et al. describe it as a ” short-lived hotspots of intense knowledge exchange, network building and idea generation”.[9]

3.1 Structure

Like trade fairs, clusters can be split into a horizontal and a vertical dimension. The horizontal one consists of those firms that produce similar goods and compete with each another. Although a close contact between the firms is not necessary, the proximity to competitors provides the opportunity to compare and monitor the rival’s products and its qualities. In an industrial cluster, where every firm’s production also underlies the same local conditions, companies can also estimate the amount of production costs and thus increase the quality of information generated by effectively comparing the own performance with the competitors’ performances. Hence, this procedure evokes high incentives for co-located firms to continuously innovate.[10] The vertical dimension of a cluster is, in terms of growth, positively correlated to the existing variety of the horizontal dimension.[11] That implies, that an established accumulation of similar or complementary producing firms reasons the upcoming demand for specialized supply and services. Further, providers of these specific demands also move, at least with one small business entity, to the clustered region and thus establish its vertical axis.[12]

[...]


[1] vgl. Grape, 2011, S. 1

[2] vgl. AUMA, 2010, S. 25

[3] vgl. Bello/Barczak, 1990, S. 48

[4] vgl. Bathelt/Schuldt, 2008, S.853

[5] vgl. Bello/Barczak, 1990, S. 50

[6] vgl. Bresnahan et al., 2001, S. 836

[7] vgl. Porter, 1998, S. 78

[8] vgl. Bresnahan et al., 2001, S. 836

[9] vgl. Maskell et al., 2006, S. 997

[10] vgl. Bathelt et al., 2004, S. 36

[11] vgl. Marshall, 1920, S. 225

[12] vgl. Bathelt et al., 2004, S. 37

Details

Pages
15
Year
2011
ISBN (eBook)
9783656328445
ISBN (Book)
9783656329299
File size
597 KB
Language
English
Catalog Number
v205776
Institution / College
University of Cologne – Wirtschafts- und Sozialgeographisches Institut
Grade
1,3
Tags
Messe Trade Fair Exhibition Buzz Exposition Knowledge Cluster Information Temporary Pipelines Europe Europa Economy European Monitoring Creation

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Title: Trade Fairs as Temporary Clusters in Europe?