The Cluster Policies Whitebook

JENS SÖRVIKResearch policy Institute

The Cluster Policies Whitebook

• The Competitiveness Institute(TCI) sixth annual conference

• Vinnova

• Two parts

• Greenbook and Whitebook

• Download and order at www.competitiveness.org

Context• Great changes particularly communication, falling prises, greater accessibility, diffusion and usage of knowledge.

• The importance of knowledge as input in production increases. Not only High Tech sectors.

• Liberalisation and globalisation of factor and product markets.

• Increased importance of and investments in human capital

• Increased focus on interaction between sectors of society. Triple Helix

• Not linear model of innovation.

• Competition between cities and regions.

• Organisational changes, clusters and innovation systems

Supply: Science,

R&DDemand:

market

Ideastechnologies

Innovations

s cien tis ts

clie n tsco ntracto rs

co m pe tito rs

Increased potential both

directions through ICT

Source: UNCTAD, World Investment Report 2002.

Structuring the field

i) Geographical concentration

ii) The specialisation or common denominator of a cluster

iii) Actors• Firms• Government• R&D• Finance• Institutions for collaboration (IFCs)

iv) Cluster dynamics and linkages: cooperation and competition

Volvo Suppliers

v) The cluster lifecycle

Agglomeration Emerging cluster Developing cluster Mature cluster Transformation

vii) InnovationBroad senseInterrelated with other variables – enabling conditionsEvolving constantlyDistinct benefits: innovation, productivity, business formationCountering pitfalls and risks

vi) Critical massBundles matterNot merely whether a region has it or does not have itNo absolute conceptDifficult for public sector to judge

The cluster and the Environment

Pitfalls and risks

• Lock-in effects, Path-dependency, Technological discontinuities

• Creating rigidities

• Decrease in competitive pressures,

• Self-sufficiency syndrome

• Inherent decline

Policys Roll

- Interest in clusters

- Success stories from other regions.- Failure with other economic models- Large companies are increasingly more

global and less local- SMEs and Clusters more locally anchored. - Connection to Innovation and Knowledge

based economy.

- Policy - facilitate

Three Rationales for Policy Intervention

•Market Failure

• Information failures, risk averse, potential under investment, externalities, free riders and economies of scale.

•Policy Failure

•Failure in service provision, Vested interests, Directindustry support, White elephants, Supporting wrongclusters with wrong methods.

•Systemic failure

• Problems in the relations between actors and institutions, the innovation system framework, moreeffective to adress systematically than single policy

i) Broker policiesii) Demand side policiesiii) Measures for special promotion of

international linkages iv) Training policiesv) Framework policies

Not one single policy tool fits all, needs tailoring

Policy areas

Broker policies

• Public authorities can support the establishment of linkages:– Encouragement and facilitation of networking, platforms , meeting places,

IFCs, joint development projects– External connections, export networks and co-ordinated purchasing– Promotion of cluster identity and awareness, creation of cluster brand and

marketing for external and internal promotion.

• Measures that strengthen science-industry interplay:– Promote specialisation and local adaptation in university-industry linkages,

incentives to promote linkages to local industry; – Intellectual property reforms to provide institutions and individual

researchers with incentives to commercialise research;– Support services for the development of new technology-based firms.

• Various instruments: – Competence system– Science parks and Business incubators – Specialised statistics– Strategic Analysis, Foresighting, SWOT, Evaluation– Tax Incentives

• Demand side policies:– Public procurement, Long term;– Should stimulate openness and innovativeness; – Lack of competencies, White Elephants, problem

pulling out.

• Promotion of international linkages:– Attraction of Foreign Direct Investment; – Support to export networks; delegations to

international trade shows; branding and marketing;– Provision of export credit and financing services.

Facilitation of importation/sourcing of key components;

• Training Policies:– Upgrading skills and competencies outside formal

education and highly idiosyncratic – Vocational training programmes

Framework Conditions

• Macroeconomic stability• Product markets (goods and services)• Factor markets (labour and financial markets)• Education systems• Physical, institutional and judicial infrastructure,

Governance• Communications and transport infrastructure• Social capital and attitudes

The Cluster Process

From process to action

Competency groups:

• Leadership• Integrity• Enabling capabilities• Interpersonal skills• Knowledge and vision • Management skills• Analytical skills• Resources

Automotive Cluster in Styria• 1980s crisis – questions localisation• Regional policy for clustering – mapping positive long

history and many firms.• Bottom up engagement• Broad based steering committee (firms, universities,

government, chamber of commerce, Unions)• IFC team of six persons• Cluster and collaborative training courses for

managers• Established R&D and competence centers,

internationalisation of firms, promotion of firm growth, FDI attraction

• 1996 20.000 employees – 2002 30.000 employees and 200 companies, high number of international certificates

• Initially Public funding now private funding