Home > IP Topics Index > The Policy and Legal Environment for Innovation > Building Research Clusters: Exploring Public Policy Options for Supporting Regional Innovation > Editor's Summary, Implications and Best Practices

Governments at all levels are very interested in building research clusters to benefit their local and national economies. Clusters are complex, however, and investments to promote them can easily be misspent. This chapter aims to help policymakers maximize their investments. It first offers a taxonomy of countries and their potential for cluster development. Six dimensions (manufacturing capacity, domestic market, export market, R&D, IP system, and drug regulatory system) are explored across three development stages to measure a country’s cluster capacity.

The chapter also provides a five-stage process for realistic cluster building. 4Stage one assesses capacities, resources, and opportunities. Tools for such an assessment are numerous but surprisingly weak, and the authors evaluate several prevalent approaches to highlight their blind spots and strengths. They conclude that quantitative analyses should be supplemented with qualitative studies for maximum effectiveness.

Stage two involves choosing an anchor strategy. Different cluster approaches will have a different set of requirements, a different mix of leaders and tactics, and different success rates depending on the country. Porter’s industrial approach has been widely deployed, but it does not take into account the rules that govern knowledge-based development. The authors therefore examine other options. These include strategies focused on a technology, product supply chain, or product market. Networked models oriented around the development of useful knowledge are also considered, as is an “innovative entrepot” model that relies on small, nimble, highly specialized networks. This last approach appeals to many communities because it does not require the scale of the networked model.

In stage three, organizational and institutional leaders are identified to take the lead in developing the cluster. Key actors are often the university, public-sector research laboratories and institutions, and the private sector. Almost everyone agrees that competitive, profit-seeking firms are at the core of any cluster, but the regional university can also directly or indirectly drive the evolution and success of a technology cluster. Key individuals, moreover, can be ambassadors or civic entrepreneurs for regions and act as catalysts for change. The authors also stress the importance of cross-fertilization through public-private partnerships, which can alert the public sector to market demands and provide firms with access to basic research.

In stage four, proactive tactics are chosen. Minimally, a country needs to create certainty for what would otherwise be risky transactions by having the necessary legal and social structures: the rule of law, effective and efficient mechanisms to protect and adjudicate property, the lowest possible barriers for entering or exiting any of the key input and output markets, the ability to trade domestically and internationally, and effective tax, regulatory, and trade rules. Moreover, clusters thrive best when at least a base investment has been made in education, training, and general community infrastructure. Indeed, success depends on nurturing local strengths. Luring companies with subsidies is usually not effective. Likewise, building infrastructure on the “if we build it they will come” model usually ends with a “we built it and they did not come” result. Spending money is not always the answer. This is partly because different kinds of money and capital flows are needed at different stages of cluster development. Government money sometimes gets in the way of private money and vice-versa. This is why many researchers look to “people” policies to nurture clusters. People are at the heart of generating new ideas and technologies, people lead and work in companies and institutions, and people are the core of networks. Universities can play a very big role in focusing such “people” efforts.

Stage five identifies the cluster’s lifecycle and the strategies needed to sustain it. Several studies are considered, and the authors conclude that the evolutionary dynamics of markets are unavoidable. Clusters should be alert to such transformations—which is another strong reason for pursuing and maintaining public-private partnerships—and activities should shift to meet these changes in order to avoid a cluster’s decay.

As knowledge-based development, cluster building is inherently different from traditional industrial development. Above all, it requires global links. Firms and skilled employees are less interested in fiscal incentives, public infrastructure, or other government support than in the innovation community and its networks.

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

• Governments are uniquely placed to gather and analyze data related to clusters, to convene processes to choose a strategy, to identify leaders, and to undertake key tactics.
• Governments are solely responsible for developing and sustaining the underpinnings for commercially based clusters, including legal and social structures, tax regulations, and trade rules.
• Governments cannot and should not attempt to build clusters alone. Joint ventures and partnerships are likely to be more effective and better able to focus public and private resources on critical infrastructure and commercial opportunities.

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

• Universities are critical to creating absorptive capacity; to be successful, they will need to link in some way to the economic and industrial structure of the local economy.
• Universities often can be critical leaders in generating clusters; if they decline to exercise leadership, certain activities may be impossible.

For Scientists

• Scientists should seriously consider requests to participate in activities that go beyond their academic pursuits. For example, they can contribute significantly to cluster planning and formation.
• Successful scientists (that is, leaders in their respective fields) should strategically engage in supporting cluster development.

For Technology Transfer Officers

• Technology transfer offices (TTOs) are often ideally placed to define and nurture an entrepreneurial culture in the faculty; there are potential large gains from such efforts.
• TTOs can, if appropriately structured, become a source of creative networking and collaboration, generating both academic and commercial success. Hence, this role in driving the success of clusters will be absolutely essential.