Creating shared value in an industrial conurbation: Evidence from the North Staffordshire ceramics cluster

• Date: 01 March 2019
• Author: Lorraine Limbrick,Ian Jackson
• Published date: 01 March 2019
• DOI: http://doi.org/10.1002/jsc.2254

RESEARCH ARTICLES

Creating shared value in an industrial conurbation: Evidence

from the North Staffordshire ceramics cluster*

Ian Jackson

1,2

| Lorraine Limbrick

1,2

1

University of Wolverhampton Business

School, Wolverhampton, United Kingdom

2

Liverpool Business School, Liverpool John

Moores University, Liverpool, United Kingdom

Correspondence

Ian Jackson, Faculty of Social Sciences,

University of Wolverhampton Business School,

Wolverhampton, WV1 1AD, United Kingdom.

Email: I.Jackson@wlv.ac.uk

Abstract

The real benefit of Porter and Kramer's Creating Shared Value may be to assess past events in

capitalism rather than to predict the future. The claims by Porter and Kramer that the concept

of creating shared value is an effective way of reinventing modern capitalism by releasing an

upsurge in innovation is misleading because it maintains self-interest principally of large corpo-

rations at the center of the economic system. The long-term development of the North Staf-

fordshire Ceramics cluster suggests that firms such as Wedgwood were developing a primitive

form of CSV over 250 years ago at the start of capitalism as opposed to a recent way of rein-

venting modern capitalism. The evidence of competitive forces remains strong and the resilience

of firms in the cluster is much more in line with Schumpeterian “perennial gale of creative

destruction”than a “wave of innovation and growth”offered by Porter and Kramer.

1|INTRODUCTION

The remarkable claim by Porter and Kramer (2011) that the concept

of creating shared value (CSV) is an effective way of reinventing mod-

ern capitalism by releasing an upsurge in innovation is both appealing

and alarming at the same time. The assertion is appealing because it

offers an optimistic vision for dealing with the manifest troubles of

the postindustrial phase of capitalism; but it is also alarming because it

maintains self-interest principally of large corporations at the center

of the economic system, Brittan (1996). In other words, although CSV

provides potentially insightful observations, it is not the radical depar-

ture from the preexisting forms of capitalism, which is a fundamental

aim of the approach.

As a result, while CSV has gained traction as a prospectus for

accountable and transparent behavior by business organizations and

national regulators alike, it remains embedded in the prevailing

approach and furthermore overlooks the paradoxical role of innova-

tion in wider society. Hence, the contradictory feature of capitalism is

captured not by CSV with a “wave of innovation and growth”

(Porter & Kramer, 2011, p. 63); rather it is depicted perfectly by a

“perennial gale of creative destruction”(Schumpeter, 1943, p. 83).

This point is supported by the work of Galbraith (1952, p. 100) and

furthermore by reference to the profound influence of technology

companies in the dynamically changing landscape of the digital age

such as Apple, Amazon, Facebook, Google, Microsoft, and many

others. More recently, this view has been progressed by Haskel and

Westlake (2018, p. 13) as the rise of the intangible economy referred

to “capitalism without capital.”

This paper is divided into five remaining parts. The first

section provides an overview of the research method and approach.

The second section is a critique of CSV with specific reference to the

development of local clusters in conurbations such as the North Staf-

fordshire Ceramics agglomeration. The third section assesses evidence

from business history that ceramics firms such as Josiah Wedgwood

and Sons

1

were possibly developing a primitive form of CSV over

250 years ago at the start of capitalism. The fourth section presents

contemporary evidence from the North Staffordshire Ceramics indus-

try regarding the role of cooperation and competition. The final

section presents the conclusions generated by the empirical research.

2|RESEARCH METHOD AND APPROACH

Shared value can be created in three main ways; namely, (a) producing

commercial output to benefit the public good, (b) orientating

*JEL classification codes: B12, L25, L61, R12

1

The Wedgwood company had several broadly similar names at the beginning

of its existence including Wedgwood and Bentley, which celebrated the collab-

oration between Josiah Wedgwood and his business partner Thomas Bentley.

DOI: 10.1002/jsc.2254

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