Knowledge-intensive industries benefit from short distances between companies

Financial activities, where knowledge plays a big part, are geographically very concentrated. The companies themselves benefit from it as well, because, according to the study, shorter distances further the networking that occurs through the employee mobility between companies. Other organisational forms of proximity, such as the educational background of the personnel at the companies, are also connected to it. This is according to a fresh study published by the Helsinki City Executive Office.

In the Helsinki-Uusimaa Region, the functionality of the labour market and the networking of the companies can be furthered by creating land-use related prerequisites for geographic proximity. This can be achieved by developing especially the business clusters and well accessible areas in the region.

Proximity furthers networks in smaller clusters as well in the entire Helsinki-Uusimaa Region

Agglomerations benefit companies in many ways: shorter distances increase the employee mobility between the business establishments, as the transfers of employees from one organisation to another are more likely to occur between business establishments that are geographically closer to each other. With the employees, knowledge and networks are also transferred across the borders.

According to the results of the study, companies in knowledge-intensive industries benefit from shorter distances in all areas of the Helsinki-Uusimaa region. This occurs in both dense business clusters and in less dense areas, where the business establishments are geographically further away from each other on average. This is relevant for the future growth outlook of the area, as the significance of knowledge in the production processes is constantly growing.

The growth of the strongest business clusters into increasingly dense, diverse and functional business areas should thus be supported. It is essential to enable complementary construction and renovation of old constructions, to make sure that the supply of premises can adapt to the changing demand in attractive areas. When the operating conditions of companies in the Helsinki-Uusimaa region are developed, it is integral to make use of the opportunities presented by the rail traffic services and the well accessible station and stop surroundings.

The Helsinki City Executive Office’s fresh study analyses how geographic proximity is linked to employee mobility between business establishments in knowledge-intensive industries in the Helsinki-Uusimaa region, and how the significance of the proximity varies between different types of areas in the region. This study has been compiled as part of the ROBUST project for the research and development of modes and administrative models for interregional interaction in Europe. The research material has been compiled by connecting geographic location data of business establishments in knowledge-intensive industries with data from Statistics Finland’s registers concerning business establishments and their personnel.

Publication:

Tamás Lahdelma:  Job-switching patterns in knowledge-intensive industries within the Helsinki-Uusimaa Region, Helsinki City Executive Office, Working Papers 2019:1, PDF publicationsummary in a nutshell (in Finnish).