Regional Advantage of Cluster Development: A Case Study of the San Diego Biotechnology Cluster

The concept of “clusters” has become central to regional economic development strategies, especially in the high-technology and biotechnology industries. Numerous studies have examined the significance of industrial clusters and their components, but comparatively less attention has been directed towards understanding the roots and processes of industrial localization. In particular, emerging biotechnology clusters such as that in San Diego have not drawn adequate scholarly attention given their policy implications with regard to clustering and regional development. Based on in-depth interviews, historical archives and participatory observations, this paper examines how the San Diego biotechnology cluster emerged and grew into an entrepreneurial habitat that has nurtured hundreds of biotechnology companies that have produced a series of innovative products. The author suggests that the regional context of the existence of a number of small biotechnology companies rather than a group of large firms, a continuous flow of talent, and leadership that fosters collaborations have been critical in promoting knowledge creation, circulation and accumulation, which are essential to spawning startups. The regional advantage of San Diego in stimulating entrepreneurship and innovation lies in its edge in creating and exploiting knowledge and practices through its entrepreneurs' robust interactions and participation in local communities of practice.     

Assessing Overall Network Structure in Regional Innovation Policies: A Case Study of Cluster Policy in the West Midlands in the UK

Revisiting the theoretical roots of the key concepts of “embeddedness” and “networks” that underpin many recent regional innovation polices, this paper strives to achieve a more systematic understanding of the overall network structure of geographic agglomerations, which helps to form a more convincing model of regional development based on learning. This also helps to establish an analytical framework with indicators to assess the overall network structure in regional innovation policies. Employing the framework, the examination of cluster policy in the West Midlands highlights its weakness in addressing the overall cluster network structure and the contingent factors influencing the structure. The analysis suggests that there may be similar weaknesses in other regional innovation policies and the theories underpinning them as they share a common weakness in addressing the structural characteristics of overall networks.     

Managing the Global–Local Dimensions of Clusters and the Role of “Lead” Organizations: The Contrasting Cases of the Software and Medical Technology Clusters in the West of Ireland

The purpose of this paper is to investigate “leading” firms in an industrial cluster to understand how the balance between global and local dimensions of the cluster can be managed. Two cases of industry clusters, the software and medical technology clusters in the west of Ireland, are employed to examine how certain organizations can occupy a “lead” position and how—if at all—such organizations generate an agglomerative effect in a cluster. In the case of the medical technology cluster, the study shows that when large firms enact a leading role by influencing the technology trajectory of the region and stimulating the local dynamic, they can generate agglomerative effects, thereby enhancing the relevance and sustainability of clusters. Most significantly, it shows how leading organizations act as an important facilitator in connecting the global and local dimensions of clusters even in the absence of extensive local formal linkages. At the same time, the case of the software cluster reveals that the presence of large organizations alone does not inevitably stimulate such a clustering effect and emphasizes that appropriate characteristics and conditions need to be in place. Overall, while the study substantiates previous research on the significance of temporary and organized forms of proximity, it also shows the value that permanent geographical proximity can have, thereby contesting recent research that downplays the relevance of the clustering institution (e.g. Lorentzen, A. (2007) The geography of knowledge sourcing—A case study of Polish manufacturing enterprises, European Planning Studies, 15, pp. 467–486; Wickham, J. & Vecchi, A. (2008) Local firms and global reach: Business air travel and the Irish software cluster, European Planning Studies, 16, pp. 693–710).     

Stocking Up: The Role of Temporal and Spatial R&D Stocks

Endogenous growth models are built around the concept of a knowledge stock. This knowledge stock can also be interpreted as a localized stock that operates at the regional level, as is common in the regional innovation systems literature. We use data from the second, third and fourth Community Innovation Surveys (covering 1994–1996, 1998–2000 and 2002–2004) to measure the build-up of knowledge at a very low regional aggregation level (“across streets and hallways”) in the Netherlands. In doing so, we account for regional agglomeration effects. We find that such local knowledge stocks have a small influence on innovation and are far outweighed by firm-specific characteristics.     

With or Without Clusters: Facilitating Innovation through a Differentiated and Combined Network Approach

Over the past decades, economic and innovation policy across Europe moved in the direction of creating regional clusters of related firms and institutions. Creating clusters through public policy is risky, complex and costly, however. Moreover, it is not necessary to rely on clusters to stimulate innovation. A differentiated and combined network approach to enhancing innovation and stimulating economic growth may be more efficient and effective, especially though not exclusively in regions lacking clusters. The challenge of such a policy is to mitigate the bottlenecks associated with “global pipeline”, “local buzz” and “stand alone” strategies used by innovative firms and to combine these strategies with a view to their complementarity in terms of knowledge effects. Private and semi-public brokers will be key in the evolving policy, as timely organizational change is crucial for continued innovation, while brokers also need to mitigate governance problems. This requires region-specific knowledge in terms of sectors, life cycles, institutional and socio-cultural factors, and yields spatially differentiated and differentiating adjustment strategies. The role of public policy is to assist in recruiting, provide start-up funding and monitor brokers. With this, policy moves towards a decentralized, process-based, region-specific, spatially diverging and multi-level system of innovation that is geared towards the evolving innovation strategies of firms.     

From Clusters to Platform Policies in Regional Development

This short briefing paper addresses the next stage in the evolution of regional development policy. It is clear that the cluster idea has held sway in this field for some 20 years. By now, practitioners and academics are widely sceptical of policy capabilities to create let alone build clusters. Recessionary times make this more difficult. Moreover, where some recent success can be seen, it is associated with command economies such as China where normal market and democratic barriers to large public investments in such measures are absent. Nevertheless, clusters exist in many places and there is evidence, displayed in this paper, that in some regions they have mutated into multi-cluster platforms. Now, as regions seek to rebalance, platform policies are evolving and being implemented. This paper shows how this is in part a response to “Grand Challenges” and the emergence of “challenge-driven” innovation.     

Guilty by Association: A Cross-industrial Approach to Sourcing Complementary Knowledge in the Uppsala Biotechnology Cluster

A wide range of industrial studies recognize the tendency of similar and related economic activities to co-locate in so-called industrial systems or clusters. While a cluster is defined by its cross-industrial relations the supporting and complementary role of cluster actors is seldom fully explored. This study will focus on the dynamics of cluster relations and give an account for the complementary nature of clusters by analysing anchor firms and complementary agents (such as specialized service providers and institutions for collaboration) in the Uppsala biotechnology cluster in Sweden. The empirical data used involves a triangulation of interview, survey and individual-based register data based upon a mapping of cluster actors active in 2002 and 2003. It is shown that both the formerly dominant pharmaceutical company and the local university have actively taken the role as anchor firms/organizations creating a local and dynamic milieu for biotechnology activities. Furthermore, it is shown that the local cluster consists of a variety of complementary agents contributing to knowledge spillovers and cluster competitiveness.     

What's Next in Researching Cluster Policy: Place-Based Governance for Effective Cluster Policy

Despite their immense popularity and rapid proliferation and development, local cluster policies have met mixed results, and often suffer from limited effectiveness. In this paper, we argue that an important reason for the limited success can be found in the way policies have been grafted onto a particular policy rationale, namely of “cluster building”. Responding to this critique, we propose an alternative rationale, that of “policy leverage”, and a governance model which, in the pursuit of “policy leverage”, presents a new approach to intelligence gathering and to collective strategy-making. The model assigns a key role to “civic entrepreneurs” who operate at the interfaces of public and private spheres, and, of endogenous and exogenous drives, in line with “place-based” approaches.     

Tobler’s Law in a Multivariate World

Tobler’s first law of geography is widely recognized as reflecting broad empirical realities in geography. Its key concepts of “near” and “related” are intuitive in a univariate setting. However, when moving to the joint consideration of spatial patterns among multiple variables, the combination of attribute similarity and geographical similarity that underlies the concept of spatial autocorrelation is much harder to deal with. This article uses the notion of distance in multiattribute space to explore and visualize the connection between “near” and “related” in a multivariate context. We approach this from a global, local, and regional perspective. We outline a number of ways to combine different visualization techniques and introduce a new local neighbor match test for multivariate local clusters. We illustrate the methods by means of Guerry’s classic data set on moral statistics in 1833 France.     

Understanding evolution in the Antwerp chemical cluster: the role of regional development strategies

Research on regional economic development increasingly embraces more nuanced perspectives on the evolution of clusters, industries and agglomerations. The extent to which the emergence and decline of clusters can be directed with intentional regional development strategies is, however, a major point of discussion. The article links the cluster life cycle concept to regional development strategies in order to examine the trajectory of Europe’s largest chemical complex in and around the Port of Antwerp (Belgium). This chemical cluster has matured and currently is in a state of stability. Although the cluster did not experience growth over the last decades in terms of new entrants, it did transform internally and maintained its importance as a production centre. Thus, whereas lock-in mechanisms hampered growth, they also prevented the cluster from going into a state of decline. We argue that while regional development strategies stimulated new emerging clusters in the Flemish region, vested interests in the port and associated lock-in mechanisms have resisted such developments in Antwerp. New growth trajectories based on the chemical cluster were therefore difficult to recreate in the Antwerp region.     

Clusters versus Cluster Initiatives,with Focus on the ICT Sector in Poland

The article focuses on the topic of clustering, which has become a popular concept, both from the academic and political perspective, and as an efficient business model. The distinction between clusters, understood as geographical concentrations of specific industries, and cluster initiatives, understood as more formalized actions undertaken by regional actors, is proposed. The primary objective of this study is to verify if these two types of structures are overlapping each other. This problem arises because the motivation for forming some cluster initiatives may be different economic policy instruments rather than existing market potential of a specific regional economy. The study finds that not all of Information and Communication Technologies (ICT) cluster initiatives in Poland represent real concentration of ICT-related divisions included in statistical classification of economic activities in the European community Rev. 2 classification, as measured by location quotients (LQs) for indicators on employment, firms' incomes and number of enterprises. However, there is a visible pattern that the LQs are higher in smaller geographic areas (NUTS 4 (Nomenclature of units for territorial statistics)), which usually represent big cities, being the cores of cluster initiatives. The study also discusses the phenomenon of the internationalization of clusters and the value added to that process from forming formalized cluster initiatives, which create favourable institutional framework for transborder cooperation.     

From regional innovation systems to local innovation systems: Evidence from Italian industrial districts

The theoretical concepts of industrial district and regional innovation system though closely related, capture different aspects of regional economic development. Given the “nestedness” of a system in other systems, one regional innovation system can support several districts. However, in some cases, districts may be considered as local innovation systems with independent innovation patterns. In fact, the socio-economic characters of industrial districts can be so specific that the region's size and institutional framework may be inadequate in fully describing their innovation processes. In the case of the Italian region of Lombardy, this “autonomous” local innovation system model proliferates.     

Does Combinatorial Knowledge Lead to a Better Innovation Performance of Firms?

The knowledge base concept in the past was often applied in its “pure form”, i.e. it was assumed that there are dominant knowledge bases in particular sectors and firms shaping knowledge and innovation processes and related networks. For “analytical sectors” such as biotech, it has been argued that codified knowledge generated by universities and R&D organizations is the key for innovation, whereas “synthetic sectors” such as machinery innovate more incrementally by recombining existing knowledge often drawn from suppliers or service firms. Empirical literature has partly confirmed these patters, but also shown more complex knowledge processes. More recently it has been argued that combinations of different knowledge bases might enhance the innovation performance of firms. For example in “analytical sectors”, firms might benefit not just from new and basic knowledge generated by research, but also from recombining existing and applied knowledge or by drawing on symbolic knowledge. Combinatorial knowledge bases might also be relevant for “synthetic” and “symbolic sectors”, but in different forms. This study investigates for the ICT sector in regions of Austria if the reliance on combinatorial knowledge leads to a better innovation performance than the use of more narrow knowledge bases.     

Institutional Arrangements and Political Mobilization in the New Italian Regionalism: The Role of Spatial Policies in the Piedmont Region

The paper focuses on the resurgence of the regions as protagonists of the process of the state rescaling in many European countries. In the EU countries this process can be seen as a result of a mix of economic and institutional factors, which have been producing an increasing competition between the central governments and the regional authorities. The rise of the multi-level governance and of the so-called Euroregionalism has reinforced the role of the regional scale in the territorial development: on one hand, with new actors like agencies and organizations engaged in the economic development (FDI attraction, place marketing, innovation and learning), on the other hand by the resurgence of “old” actors, such as the regions, in many cases empowered by processes of institutional devolution. The literature has investigated this re-composition of the political space with regard to the “hollowing out” and the “rescaling” of the state. On the base of these theoretical underpinnings, we discuss some empirical evidence from the Italian experience, in order to show whether and how the regional structures are not only “spaces for policies”, but also “spaces for politics”. Over the last decade, the changes in legal framework, the external inputs from supranational levels of government—the European Commission—and the re-territorialization processes have introduced many elements of innovation in the role of the regions. By illustrating the case of the Piedmont Region, we try to demonstrate that the transition towards the region as an active space of politics can be mediated by the sphere of the policies, especially the spatial ones.     

Space-Time Synergetics in Innovation Diffusion: A Nested Network Simulation Approach

The relevance of evolutionary dynamics theories for investigating the development of sociotechnical systems has recently been recognized. In this framework the logistic growth model is considered by many scientists as an extremely appropriate framework that is able to interpret the dynamics of innovation diffusion. Starting from recent results in the literature on technological dynamics, the present paper focuses on backgrounds leading to different shapes of the conventional logistic function. By embedding these motives in the socio-attitudinal context of the system at hand, the present paper tries to give a new interpretation for the rapid/slow “take off” and dynamics of a given innovation in a spatial setting. In particular, a nested logistic dynamic model is developed here, with particular emphasis on the dynamic growth rate of the logistic function expressing—by means of an accessibility cost function—the preference intensity concerning a given innovation for a certain region/country. Finally, various simulation experiments are carried out for the case of both a two-dimensional and a four-dimensional network. The possibility of both stable and unstable diffusion patterns, depending on the parameter values in the nested “attitudinal” dynamic function, is also investigated.     

What “Is” Territorial Cohesion? What Does It “Do”?: Essentialist Versus Pragmatic Approaches to Using Concepts

The question, “what is territorial cohesion” has reverberated through European spatial policy since the publication of the European Spatial Development Perspective in 1999. Over the last 10 years, the European Spatial Policy Observation Network (ESPON) has made many efforts to define and measure the concept of “territorial cohesion”. Many such attempts assume that a policy concept must be defined in order to be “operationalized”. Or, in other words, that we must determine what the concept is before we can determine what it can or should do. This paper challenges this assumption in two parts. In the first, I review a number of ESPON projects to show how complex and uncertain these essentialist definitions have become. In the second, I analyse a number of national, regional and local government responses to the 2008 Green paper. I show that, whilst a clear and coherent definition has not been established, this concept is already operationalized in different policy frameworks. Bringing this together, I argue that users of such concepts ought to approach the issue differently, through a pragmatic line of enquiry: one that asks what territorial cohesion does, what it might do and how it might affect what other concepts, practices and materials do.     

Globalization,Modes of Innovation and Regional Knowledge Diffusion Infrastructures

Firms increasingly transcend the boundaries of regional innovation systems in their search for technology and complementary capabilities, and only rarely can they build their knowledge bases on science system output alone. Whereas the former decouple firms from regional user–producer networks, the latter raises important questions concerning the role of local science and education system actors in industrial development. By applying the “modes of innovation” concept on a Norwegian region, this paper discusses how science and education institutions can respond to the challenges of knowledge base complexity and globalization. It concludes that such institutions may play a vital role in supporting knowledge-based development, albeit different from that of academic knowledge exploration followed by linear technology transfer to industry.     

Improbable Art: The Creative Economy and Sustainable Cluster Development in a Hong Kong Industrial District

A noted Singapore-based cultural geographer and specialist on Asia analyzes the emergence and functioning of a unique artistic cluster in Hong Kong's Fotan light industrial district. The objective of the research is to understand how artistic work in the cluster, despite some challenges, has thus far proven sustainable in cultural, social, and economic terms. The findings of this case study permit further clarification of several dimensions of an emerging theory of cultural/creative clusters, which should be considered as distinct from business and industrial clusters. Selective comparisons between the Fotan cluster and the Moganshan Lu cluster in Shanghai demonstrate that cultural/creative clusters do not face uniform challenges in striking a balance between economic and cultural sustainability.     

Multi-level Science Policy and Regional Innovation: The Case of the Munich Cluster for Pharmaceutical Biotechnology

Knowledge-based industries tend to develop within regional or local clusters that allow for knowledge spillovers, the generation of a critical mass of complementary competencies and skills as for spatial proximity to academic organizations out of which many highly innovative firms have been founded. The prototype of that development certainly is the biotechnology industry which has emerged since the 1970s first in the US where especially small and medium-sized research companies have been established around leading science bases. Following the example of the US biotechnology industry, public policies in many industrialized countries aimed at stimulating cluster formation in biotechnology. This holds true especially for member states of the European Union (EU) where public policy initiatives have been initiated at different territorial levels. This article refers to the Munich pharmaceutical biotechnology cluster and applies institutional and organizational indicators that have been developed in various systemic analyses of technological development and innovation. It will be shown that reforms of the institutional environment in which the innovative organizations are embedded were crucial for the commercialization of biotechnological research in Germany. These reforms have occurred mostly at the regional and national level, whereas the EU played a role especially in establishing the regulatory framework for the biotechnology industry. Organizational indicators will be applied in order to assess the modes of knowledge production within the cluster.     

New High-Tech Industries and Windows of Locational Opportunity: The Role OfLabour Markets and Knowledge Institutions During the Industrial Era

This paper presents a theoretical concept (the so-called“Open Windows of Locational Opportunity” concept, or OWLO concept) which provides an explanation for why it is rather uncertain and unpredictable where new high-technology industries will emerge in space. This is due to three tightly linked features of new high-tech industries. Firstly, new high-tech industries reflect a high rate of discontinuity because they place new demandson their local production environment. Secondly, due to this mismatch, new high-tech industries depend on their creative ability to generate or attract their own favourable production environment. This creative capacity compensates for the lack of specific local stimuli, as associated with their discontinuous nature. Thirdly, the OWLO concept claims that chance events may have a considerable impact on the place where new industries emerge. This is because it remains unpredictable at which place potentially favourable resources of a generic nature set in motion a creative process which brings increasing returns (that is, “localization economies”) into the local production environment. As a consequence, many regions are considered to be in a more or less equal position to develop new high-tech industries during their initialstage of growth, despite their different techno-industrial histories. We have further illustrated this OWLO concept by linking it to the problem of whether regional labour markets and knowledge institutions may facilitate the ability of regions to generate new high-tech industries, despite the fact that these require new knowledge and skills. We made an attempt to specify in broad terms the extent to which local supplies of labour and institutionalized knowledge may have influenced the place where so-called new clusters of innovative industries emerged in Great Britain and Belgium during the industrial epoch. We presented some evi-dence that the three key notions of the OWLO concept described above have indeed been features of the spatial emergence of many new clusters in both countries during their initial stage of development.