Localised Clusters in Global Networks

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Localised Clusters inGlobal Networks
Anders Malmberg Regional Economies in a
Globalising World Enhancing Intellectual
Capacity and InnovationCardiff, 21 November 2008
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Outline

• What we (think we) know about spatial clustering,
  innovation and competitiveness
• Some experiences and lessons from recent cluster
  initiatives and polices in the small and open
  economy of Sweden

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At the core key questionsin economic geography

• How do characteristics of the place of location
  affect the competitive (innovative) performance
  of firms?
• Why is economic development spatially uneven?
• Why do similar and related economic activity so
  often agglomerate in space to form localised
  clusters?
• Why is there regional economic specialization,
  and how are such patterns reproduced over time?

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Dominating approach

• Innovation cost efficiency
• Innovation high-tech
• Innovation result of interaction
• Proximity plays a role in such interaction
• Industrial systems localised
• Local knowledge structures raw material and
  wages? Shifting focus from production
  cost/transport cost/market size to the innovative
  performance of localised clusters of firms

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Michael Porters grand claim
Clusters are geographic concentrations of
interconnected companies, specialised suppliers,
service producers, firms in related industries,
and associated institutions (for example,
universities, standard agencies, and trade
associations) in particular fields that compete
but also cooperate. Critical masses of unusual
competitive success in particular business areas,
clusters are a striking feature of virtually
every national, state, and even metropolitan
economy, especially those of more economically
advanced nations (Porter 1998)
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So, what factors make firms/industries in spatial
clusters innovative/competitive?

• Local inter-firm interaction business
  transactions, collaboration (not really)
• Local inter-firm rivalry monitoring, comparison
  (possibly)
• Local labour market processes (probably)
• Localised learning processes (probably)
• Institutions 1 Public RD network creating
  organisations, Triple Helix (yes, but )
• Institutions 2 rules, norms, conventions (yes,
  but )

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Conclusions on clusters

• Spatial clustering of similar and related firms
  does seem to contribute to regional growth and
  prosperity
• Such clusters are often less locally integrated
  than some of us have believed
• Local rivalry and labour market dynamics are
  often more important than inter-firm
  collaboration
• The more developed their global links, the more
  successful clusters tend to be
• Policy implications?

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Some lessons from three recent Swedish Cluster
Initiatives

• Uppsala Bio a life science initiative
• Linköping Socware a systems on chip initiative
• IVSS Gothenburg intelligent vehicle safety
  systemsInitiative/funding from
• Vinnova
• Invest in Sweden Agency

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Lessons general

• Modest resources can generate large activity
  the tail that wags the dog UB 1 vs 1500 mil
  Euro
• Long-term and sometimes diffuse effects (changing
  attitudes, mutual learning, network creation etc)
  are most important, but short-term and concrete
  results (new firm formation, FDI or VC
  attraction, new jobs) are necessary to keep up
  enthusiasm (internally and externally) and
  momentum
• Pick-the winner problem at several scales (which
  region, which sector, which project?)
• Generally it helps if you have a cluster to start
  with

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Lessons regional approaches

• Dense, dynamic regional milieus intimately
  linked to the outside world (industry and
  academia completely global, policy making is
  national/local)
• Presence of global firms pressure to improve
  quality both of the cluster and the cluster
  initiative
• Key people and skilled labour are rooted in the
  milieu need for attractive people climate (cf
  R. Florida)
• Broad regions (e.g. the wider Stockholm region
  rather than Uppsala) when it comes to
  international marketing
• Openness is key Too narrow and strict regional
  delimitations restrict project potential
• Some of the most impressive cluster initiatives
  were born out to the wish to attract investment,
  people and and knowledge from abroad into Swedish
  clusters

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So, by way of conclusion

• Clustering is important, and
• Cluster initiatives may play a role, but
• Aim for global reach and nurture international
  links and inflows rather than just local
  networking