On January 31, 2018, at USC, Peter Gordon (Professor Emeritus, USC Price) and John Cho (Senior Regional Planner, SCAG) presented their research on agglomeration in Southern California as part of the PSR Spring 2018 Research Seminar Series.  Their presentation pointed out the strong connection between agglomeration and networking and explained how physical proximity among companies can generate a flow of knowledge between them. “Sharing information is an important part of the game,” Gordon noted, and added that “this can explain the agglomeration of the companies in the same business in specific areas.”

To explain the relation of clusters and the supply chain approach, Gordon and Cho introduced the idea of clusters being a network of networks. An agglomeration would be the emergence of uncountable numbers of complex supply chain interactions between the various sizes of companies in the same business, their suppliers and their clients. Based on Jane Jacob’s idea of downtowns providing the opportunity of spontaneous encounters, companies would pay higher prices to be where the information is exchangeable. In this way, agglomeration would be strategic for firms in the same business to acquire knowledge.

To prove their theory, Gordon and Cho presented charts comparing the number of firms that can be found in different distance from a source firm. Those charts delineated data by business type and later, also, by sizes of firms. Gordon and Cho also compared the chosen locations with the shipping cost to different areas and realized that only 30% of the firms’ location can be explained through it. This information corroborated the idea of the network being the most important agglomeration motivator.

They also showed a small change in agglomeration between small and large firms, indicating that smaller firms tend to choose locations within the cluster more than larger firms. Although this difference of sizes could be spotted, the authors believe it is too small to be significant to the study and considered that all firms of a specific business tend to cluster, creating an extensive agglomeration that can reach way beyond the radius of a big downtown.  A good example of an agglomeration that extrapolate the size of its downtown is the technology cluster that can be found in the Bay Area.

Although the presentation was full of details and data, Gordon and Cho are still looking to enlarge the research database with comparisons between different metropolitan areas and different periods of time. Speaking for the students in attendance, we hope that the authors will return in the future for another interesting seminar with updates of their research.

About the Author: Camila Araujo

Camila Araújo is an architect and urbanist and currently a first-year Master of Planning Student at USC – Sol Price School of Public Policy. She holds a AAUW International Fellowship for the current school year and its focusing her studies in transportation and sustainability. She can be reached at [email protected].