Home > Topics > The Policy and Legal Environment for Innovation > The Role of Clusters in Driving Innovation > Editor's Summary, Implications and Best Practices

Innovation in medical and agricultural biotechnology relies on sophisticated, global IP rights systems and on science that is increasingly complex and specialized. This complexity requires a more open system of knowledge sharing than previous research and development programs, and recent studies suggest that successful innovation requires developing clusters of institutions, businesses, and personnel. “Location, location, location,” the battle cry for property realtors everywhere, is increasingly becoming the key word in studies of innovation dynamics and knowledge-based growth.

So, what is a “cluster”? Strictly defined, a cluster is a “group of similar things, especially such as grow together.” Although companies and various not-for-profit entities in the same sector or product market have traditionally located themselves in specific geographic regions (rather than spreading out evenly across the geography or economy), the express search for ways to encourage clustering has only recently begun. One paradigm is that local competition is the primary dynamic behind cluster development and sustainability. Indeed, innovation now involves and generates significant externalities; innovators increasingly rely on an array of formal and informal collaborators, and the efficacy of those relationships will determine their ability to successfully launch a new innovation into product development.

Offering an overview of recent research on clusters in Canada, especially Saskatoon, which is well known for its innovations in canola products, this chapter observes that one driver for cluster formation is the development of a cost-effective, efficient IP management system. Equally important is the use of social capital (for example, norms and relationships), which can lead to less formal collaborations that can better disseminate and utilize discoveries.

While the traditional strategy of protecting infant industries in order to develop them made some sense in the industrial world, its value in a knowledge-based world is unclear. Knowledge-based development is inherently different from traditional industrial development. Indeed, multiple types of knowledge are involved in such a system, and this chapter addresses how clusters integrate four distinct types of knowledge: “know-why,” “know-what,” “know-how,” and “know-who.” A cluster’s ability to use and share all of these kinds of knowledge largely explains its power to innovate.

This chapter suggests that governments have an important role to play in the process of cluster formation and that ensuring a mix of “local buzz” and “global reach” is part of the recipe for success. Indeed, innovation clusters are very attractive economic development and IP management tools, but they should be nurtured with an appreciation for their partial and incomplete nature. Yet, as a critical part of a global innovation system, innovation clusters are very attractive economic development tools, but they cannot thrive if cut off from their lifeblood—ideas, skilled labor, and collaborative platforms.

Key Implications and Best Practices

Given that IP management is heavily context specific, these Key Implications and Best Practices are intended as starting points to be adapted to specific needs and circumstances.

For Government Policymakers

• At a minimum, government policy should avoid impeding two-way exchanges of knowledge between localized industry and global networks. Self-sufficiency strategies are unlikely to succeed.
• In order to create clusters, governments could usefully redirect some of their funds from bricks and mortar and product investments towards soft investments in institutions and platforms that create collaborations.
• Governments can provide impetus for cluster formation, by, for example, offering tax incentives to companies to set-up their operations within a defined zone of geographical proximity.

For Senior Management (university president, R&D manager, etc)

• Universities could lead the way in supporting productive research networks that have the potential not only to generate new knowledge but also to provide the absorptive capacity to bring in and adapt global knowledge to local needs.
• Research collaborations are important both for the academic status of a university and for the commercial and economic prospects of a research-based cluster. Universities should encourage and support research that engages with the larger community.

For Scientists

• Scientists play an increasingly important role in knowledge-based clusters; individuals should balance their activities to optimize their impact.
• Scientists can play a critical role in validating, adapting, evaluating, and commercializing new technologies and products. These roles also have the potential to generate new methods that can expand basic research opportunities.
• Clusters promote scientific collaboration on a personal level. These types of relationships are fundamental for effective sharing of know-how and show-how.

For Technology Transfer Officers

• Strategic pooling of intellectual property from both university and public-sector laboratories can be a valuable support for cluster development.
• Much of the value from public-sector IP portfolios will be generated not through individual licensing or commercialization deals but through the attraction of new research and development around pools of knowledge.
• Business offices can track and measure the much wider set of intellectual property centered in universities, thereby gaining insights into the dynamic nature of localized research.