Evolutionary Insights to Strategic Coupling: Windows of Locational Opportunity in the Emerging Supply Chain of Wood Pellets

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- Towards an evolutionary perspective on strategic coupling?

As mentioned above, it is not our aim to provide an extensive overview of the rich literature on GPNs and the EEG (for that we refer to Boschma and Martin, 2010 for EEG and Coe et al, 2008 or Coe, 2012 for GPN). Rather, we are interested in the debate on possible complementarities between both approaches as recently addressed by scholars (Oro and Pritchard, 2011; cf. MacKinnon, 2012; Hassink and Klearding, 2012). Hassink and Klearding (2012) rightfully argue that both the EEG and the GPN will best be served by a two-way conversation. The main focus of this paper is to include evolutionary insights to overcome particular critiques on the GPN-concept of strategic coupling.

The GPN explains regional economic development by regional actors' ability of strategic coupling - purposeful actions of actors to match local/regional assets with the needs of TNC’s aimed to insert a region in a global value chain (Coe et al., 2004; Yeung, 2009; Yang, 2010; Jacobs and Lagendijk, 2013). The process of strategic coupling has three important characteristics (Yang, 2010). Firstly, it is viewed as strategic, since it “relies on intentional actions and active deliberation by participants” (Coe and Hess, 2011, p. 131). Secondly, it is time and space contingent, involving the construction of a “temporary coalition” between groups of actors who might not otherwise work together in the pursuit of a common objective. Thirdly, it transcends territorial boundaries, bringing together actors who operate across different spatial scales.

The concept of strategic coupling in its original connotation has not been without critique. Firstly, Wei (2011) criticizes the GPN for overemphasizing the role of global lead firms or TNC’s. Such an emphasis overlooks those development processes through different forms of market internationalization and territories or industries where global lead firms are absent. As argued by Horner (2013), this emphasis can produce an unintended ‘effective affinity’ with the neoliberal approach to development. Furthermore, Wei (2011) argues that the GPN is overly positive about the long-term impact of TNC's on regional development, in particular when the presence of TNC's in a region is highly export driven. Secondly, Dawley (2011) criticizes the GPN to underplay tensions that arise from the different powers of key agents with divergent interests. Hess and Coe (2013) argue that there is a ‘dark side’ to strategic coupling potentially leading to disarticulation, ruptures and frictions within and between regions and global value chains. Thirdly, and main focus of this paper, criticism on strategic coupling has centered on the lack of attention to the contingent spatio-temporality (MacKinnon, 2012; Oro and Pritchard, 2011). Although Coe et al. (2008b) acknowledge that history matters and Yeung (2009) explicitly defines strategic coupling as “a time-space contingent convergence of interests and cooperation” (p.332), MacKinnon (2012) argues that the appraisal of strategic coupling is obscured by its lack of attention to the emergence and evolution of global value chains and complementing regional assets over time. In this context, Yang (2013) argues that too little attention is paid to prior economic development of territories as a constraining factor in engaging with global circuits of production. Engaging with the EEG could overcome this critique (Sunley, 2008; Jacobs and Notteboom, 2011; MacKinnon, 2012).

MacKinnon (2012) has focused on the EEG-concept of path dependence to develop a broader and deeper conception of the concept of strategic coupling. According to Martin and Sunley (2006, see also Martin, 2010), path dependence exerts a major influence on the future development and evolution of regional economic landscapes due to inheritance of routines, industry structures and corresponding institutional arrangements (i.e. cumulative change). EEG-scholars aim to identify the processes and mechanisms behind this, including their temporal and spatial contingency, by which “the economy self-transforms itself from within” (Boschma and Martin, 2007, p. 537). MacKinnon (2012) argues that it is series of strategic coupling-processes that lead to the continuation or abandonment of pathways. Responding to Martin and Sunley (2006) who argue that the overemphasis in EEG on lock-in has obscured how de-locking occurs and actually creates new paths, MacKinnon (2012) underlines the dynamic nature of path dependence by coining the terms strategic de-coupling and re-coupling. Strategic de-coupling and re-coupling by regional actors to global value chains relies on their ability to generate and attract new rounds of investment, which MacKinnon (2012) argues to reflect the legacy of earlier strategic coupling-processes. Hess and Coe (2013) recognize that processes of strategic coupling may indeed include the options of re- and decoupling. A recent study by Horner (2013) on the Indian pharmaceutical industry provides an empirical elaboration of such strategic re-coupling and de-coupling, demonstrating how they may serve as an alternative path to regional economic development.

Within the concept of path dependence, the origins of pathways and their spatial proliferation still remain somewhat ambiguous (Martin, 2010). Some EEG-scholars interpret industry emergence to originate in random events, highly based on 'chance' or 'historical accidents' and spatial proliferation being the result of a Pólya urn model. Others propose another account of industry emergence and its spatial proliferation: Windows of Locational Opportunity (WLO). It is the WLO-concept that has been proposed by Boschma and Frenken (2009) as ‘bridging concept’ in response to earlier critiques on EEG (cf. Economic Geography, vol.85, issue 2), which encourages us to extend the concept of strategic coupling.

- The role of Windows of Locational Opportunity in strategic coupling

The concept of Windows of Locational Opportunity (WLO) holds the view that the spatial dynamics of new and emerging industries, often following the event of radical technological innovations, are flexible in the starting phase of their industrial development; providing for ‘open’ WLO (Storper and Walker, 1989; Boschma, 1996; 1998). The development of new and emerging industries is mostly independent of established spatial structures as there is likely to be a gap between the local requirements of new firms (e.g. in terms of suppliers and customers) and their direct (institutional) environment (cf. Boschma and Frenken, 2006). As such, there are initially many locations capable of becoming the new 'hotspots' or agglomerations during