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Clusters of knowledge-intensive industries and manufacturing industries form industrial agglomeration in Step I and activate innovation in Step II. Industry clusters are formed by building segments. "Construction sequencing" in the construction industry refers to the process of determining the sequence of segments to optimize a project's resources, budget, and scheduled timeline. The process usually begins by dividing a project into segments. Urban segments consist of public spaces, airports, factories, health, housing, etc. A "segment" is a component of a cluster; the organization of a cluster consists of constructing segments. These segments can be divided into four main categories: human resources, physical infrastructure, institutions, and the living environment. Each segment has a specific function in the process of building a cluster. This study focused on innovation in Step II and extended the Fujita–Thisse model of spatial economics to hypothesize that research expenditure per researcher leads to value being added. The Granger causality was tested for the knowledge and manufacturing industries in nine major countries including China and the U.S. The results showed that the hypothesis was significant in identifying the starting segment of innovation in Step II. Accordingly, it can be concluded that research funding is the start switch that triggers innovation. The policy implication is that activating innovation in cluster policies begins with the establishment of a research fund for researchers in its assigned clusters. [ABSTRACT FROM AUTHOR]

A "segment" is a component of the organization of an agglomeration. The organization of agglomeration is formed by the construction of segments. Manufacturing agglomeration segments can be divided into four main categories: human resources including engineers, physical infrastructure, institutions, and living environment. Each segment then has a specific function in the process of building industrial agglomeration. We focus on the process of building segments in agglomeration formation. We define a "brake segment" as a segment that has a "function" to decelerate the speed of the process. The purpose of this paper is to identify the existence of this brake segment in the process of constructing the segments of the manufacturing agglomeration. We obtained the following three results. First, a modified version of the spatial economic model yields that the number of agglomerated firms is inversely related to the wages of skilled workers. Second, a factor analysis of the data on investment environment costs indicates that in the case of the manufacturing industry, the number of agglomerated firms are inversely related to the wages of engineers. Third, the factor analysis of the six countries in the JBIC survey reveals that the segment that poses the investment issue in foreign direct investment in India is engineers as human capital. We conclude that engineers as human capital are a brake segment. The implication is that the sustained development of "engineers" as human capital is essential for the success of manufacturing industry agglomeration. [ABSTRACT FROM AUTHOR]

Clusters of knowledge-intensive industries and manufacturing industries form industrial agglomeration in Step I and activate innovation in Step II. Industry clusters are formed by building segments. “Construction sequencing” in the construction industry refers to the process of determining the sequence of segments to optimize a project’s resources, budget, and scheduled timeline. The process usually begins by dividing a project into segments. Urban segments consist of public spaces, airports, factories, health, housing, etc. A “segment” is a component of a cluster; the organization of a cluster consists of constructing segments. These segments can be divided into four main categories: human resources, physical infrastructure, institutions, and the living environment. Each segment has a specific function in the process of building a cluster. This study focused on innovation in Step II and extended the Fujita–Thisse model of spatial economics to hypothesize that research expenditure per researcher leads to value being added. The Granger causality was tested for the knowledge and manufacturing industries in nine major countries including China and the U.S. The results showed that the hypothesis was significant in identifying the starting segment of innovation in Step II. Accordingly, it can be concluded that research funding is the start switch that triggers innovation. The policy implication is that activating innovation in cluster policies begins with the establishment of a research fund for researchers in its assigned clusters.

This paper identifies the importance of reducing fixed costs for establishing industrial zones as part of an agglomeration policy. China's economic growth has been driven by the agglomeration of manufacturing firms via industrial zones that attract foreign direct investment. This investment enables the export of products by importing intermediate capital goods. According to the new trade theory of spatial economics, the number of firms in an agglomeration is inversely proportional to the fixed costs. The main accelerator of agglomeration after the master switch is the formation of segments that reduce firms' fixed costs. Via a factor analysis of manufacturing agglomeration segments in sequencing economics, this paper finds that "leased" industrial zones are accelerator segments in the formation process of manufacturing agglomerations. [ABSTRACT FROM AUTHOR]

A “segment” is a component of the organization of an agglomeration. The organization of agglomeration is formed by the construction of segments. Manufacturing agglomeration segments can be divided into four main categories: human resources including engineers, physical infrastructure, institutions, and living environment. Each segment then has a specific function in the process of building industrial agglomeration. We focus on the process of building segments in agglomeration formation. We define a “brake segment” as a segment that has a “function” to decelerate the speed of the process. The purpose of this paper is to identify the existence of this brake segment in the process of constructing the segments of the manufacturing agglomeration. We obtained the following three results. First, a modified version of the spatial economic model yields that the number of agglomerated firms is inversely related to the wages of skilled workers. Second, a factor analysis of the data on investment environment costs indicates that in the case of the manufacturing industry, the number of agglomerated firms are inversely related to the wages of engineers. Third, the factor analysis of the six countries in the JBIC survey reveals that the segment that poses the investment issue in foreign direct investment in India is engineers as human capital. We conclude that engineers as human capital are a brake segment. The implication is that the sustained development of “engineers” as human capital is essential for the success of manufacturing industry agglomeration.

This paper identifies the importance of reducing fixed costs for establishing industrial zones as part of an agglomeration policy. China’s economic growth has been driven by the agglomeration of manufacturing firms via industrial zones that attract foreign direct investment. This investment enables the export of products by importing intermediate capital goods. According to the new trade theory of spatial economics, the number of firms in an agglomeration is inversely proportional to the fixed costs. The main accelerator of agglomeration after the master switch is the formation of segments that reduce firms’ fixed costs. Via a factor analysis of manufacturing agglomeration segments in sequencing economics, this paper finds that “leased” industrial zones are accelerator segments in the formation process of manufacturing agglomerations.