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COVID, Clusters and the Climate of Constant Change

Sep 30, 2020, 13:51 by Aaron Bennett
Min Jung Kim, assistant professor of business administration, researches technological innovation, knowledge spillovers, industry clusters, and employee mobility. Before joining Gies, Kim earned her PhD in business administration from the University of Minnesota’s Carlson School of Management.

For much of 2020, boardrooms and factory floors were eerily silent as the world struggled to cope with the spread of a global pandemic. Unemployment skyrocketed, and smiles and handshakes were replaced by face masks and social distancing. For companies around the globe, COVID-19 was an unexpected shock. For Min Jung Kim, however, it was a powerful reminder that our economic landscape is constantly being shaped by powerful environmental forces. And the companies that understand that will be the best equipped to survive.

“My core research interest is looking at the relationship between environmental changes and firms’ technological innovation,” said Kim, who will be joining the business administration faculty at Gies this fall. During her dissertation at the University Minnesota’s Carlson School of Management, she observed that relationship by looking at clusters, like Silicon Valley in California and the pharmaceutical industry in Boston, where specific industries settle in a fixed geographic location.

“I find that the companies in growing clusters generate more novel innovation,” said Kim, whose work broadened research in this area by studying this affect over time. “Upward growth implies that employees or companies are coming from different regions or different industries, and they bring their own previous knowledge that they’ve accumulated.” This creates a hotbed for innovation as ideas are shared, refined and accelerated, spurred on by growing investment.

More recently, she’s also begun to look at the other side of that equation, exploring how decreasing clusters affect resource acquisition by smaller ventures. “Compared to large, established companies, these companies often face problems because of a lack of resources, talented employees, or money,” said Kim. As large clusters decline, Kim believes these smaller companies could actually benefit, much like small plants thrive when large trees are removed. In this case, they might hire skilled workers departing larger companies or garner investment from the local venture capitalist who once overlooked them.

Kim says the recent economic downturn created by the pandemic could accelerate this process in both directions. “COVID-19 may dissolve major existing clusters, while areas that appear safer could grow and become a cluster.” Either way, she says companies need to understand what these changes mean and how they’re affected, so they can react effectively and efficiently.

Kim, who will be teaching the Business Policy and Strategy course at Gies, hopes to prepare students who will soon be navigating these changes. She’s well suited for the task, having completed an education degree in addition to her business studies back in her native Korea. During her PhD studies at the University of Minnesota, she also took a number of engineering courses, gaining valuable geo-visualization experience and computational skills that could one day benefit doctoral students at Gies.

For Kim, the decision to join Gies was driven primarily by the research fit. “My interest is in strategy, but I’m also interested in entrepreneurship and international business,” said Kim. “This is the perfect place for me, because there are a lot really renowned faculty in these areas. I can work with them, and — at the same — I can learn from them, becoming a more productive researcher. For me, it’s a really great place.”