Clusters: an established innovation policy for regional specialisation

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What are cluster policies? 

Clusters are defined as 'geographic concentrations of interconnected companies, specialised suppliers, service providers, and associated institutions in a particular field that are present in a nation or region' (Porter). 

The main objective of cluster policies is to favour external economies and thus strengthen companies’ innovative capacities. They also aim at maintaining employment, promoting economic restructuring, developing university-industry linkages, or building interregional partnerships. 

The main benefits brought by policies supporting clusters are linked to the reduction of transaction costs and of coordination failures (OECD). The main risks refer to regional overspecialisation, weakening regional economic resilience, and leading to technological lock-ins (Uyarra & Ramlogan). 

Cluster policies can be built around different pillars, depending on the focus the policy makers would like to give emphasis to: places (leading regions, less-advanced regions, metropolitan-hub areas), sectors (dynamic, exposed, strategic, social significance) or specific actors or groups of actors (universities, SMEs, multinationals, etc.). Often, they tend to be a combination of these different categories. The policy tools that are used in cluster policies can be regrouped into three lines of action: 

  • Engaging actors, highlighting the role of coordinators and facilitators, the level and type of interaction desired, the existence of a formal cluster initiative, and the spatial considerations of the cluster.
  • The provision of collective services such as one-stop shops, business support advice, training opportunities, skill development, or joint marketing.
  • The promotion of larger-scale collaborative R&D such as with the cluster participation to R&D programmes, university-industry collaboration programmes, and external R&D funding (OECD). 

The European Commission has launched many initiatives to support clusters, such as the European observatory for clusters and industrial change, Cluster excellence, Cluster internationalisation, Clusters and industrial value chains, and the European cluster collaboration platform (ECCP), the main hub facilitating cluster cooperation within the EU and beyond. In the European Union, there are around 3000 specialised clusters, accounting for 54 million jobs (European Commission).

Four Interreg Europe projects are dedicated to developing and delivering better cluster policies. CLUSTERFY aims to foster clusters’ interregional collaboration and integration into global value chains (GVCs). The project specifically focuses on policies to enable clustering of SMEs in Key Enabling Technologies (KETs). CLUSTERIX2.0 looks at improving regional innovation policies for clusters, namely by strengthening intra and interregional cooperation and university-industry linkages. CLUSTERS3 aims to adopt cluster policies to improve S3 implementation. The project focuses on the insertion of SMEs in the global value chains (GVCs). STRING aims to improve innovation policies for food clusters while promoting stronger linkages with their regional innovation ecosystems.

Experimenting with cluster policies 

The four Interreg Europe projects have generated many good practices on the three types of policy tools, namely engaging actors, the provision of collective services, and the promotion of larger-scale collaborative R&D.

On engaging actors, in ClusterS3,  the Regional Cluster support strategy in Piedmont, Italy, established seven regional innovation clusters in each S3 thematic area. Back in 2009, the region was supporting 12 regional innovation clusters in 12 different thematic areas. In 2015, the region undertook a process of revision of the clusters through launching a public call for the constitutions of the following clusters: Smart Products and Manufacturing, Green Chemistry and Advanced Materials, Energy and Clean Technologies, Information and Communication Technologies, Agri-food, Textile, Life Sciences to align them with the S3 strategic priorities. The good practice highlights the role of clusters in engaging actors around regional S3 priorities to promote regional economic restructuring

On the provision of collective services, in CLUSTERIX2.0, the innovation audit is a programme to assess and review the innovation and internationalisation capabilities of private companies in Romanian clusters. The innovation audit consists of three phases: (1) a questionnaire with 45 questions on innovation culture, innovation strategy, innovation management, networking, development of new processes and products, research and development (R&D), access to new markets, and management technology, is sent by the cluster management authority to private companies, (2) experts analyse the responses to the questionnaire and recommendations are sent out, and (3) meetings are organised to discuss on the future uptakes of recommendations to improve SMEs innovation capabilities. The innovation audit was key in the creation of 3 spin-offs in renewable energy and smart textiles

On the promotion of larger-scale collaborative R&D, in CLUSTERFY, building bridges between science and industry is a good practice that highlight the importance of concentrating resources to create the necessary infrastructures to pursue ambitious R&D activities. In Lithuania, Santara Valley was created to converge public and private R&D activities to conduct research in ICT, biotechnology, biopharmaceutical, and innovative medical technologies. Thanks to Santara Valley leadership, triple helix stakeholders were able to join forces to build state-of-the-art innovation infrastructures allowing for larger-scale university-industry collaborative R&D projects. The large-scale investments, which amounted to over €200 million to launch Santara Valley, were crucial in the emergence of the dynamic Lithuanian biotech cluster.

Policy experimentation leads to policy changes

Before joining STRING, the Debrecen Municipality and the University of Debrecen (Hungary) were working on the creation of a business incubator to promote innovation value chains and triple helix cooperation in the agri-food sector. The idea of this incubator was at a very early stage, with no clear definition of the equipment, facilities, and actions to include.

Learning from the experience of their partners, the Hungarians took inspiration from the experience of the ICE cluster (Spain), which provides a numbers of collective services. They compared their work with VITARTIS, the agri-food cluster in Castilla y León, Spain. They  were encouraged by the experience of Brainport development with the Food Tech Brainport in the Netherlands that offers demo-facilities and shared equipment. And they discovered the experience of Innovation Camps in Denmark to support product consistency and quality.  Following study visits in the three regions, the Hungarian partners decided to co-create the strategy with 12 local companies in the food sector to refine the policy and adapt the good practices to their institutional context. In November 2019, the Debrecen Municipality approved the strategic plan for the incubator lab.

Clusters are one of the potential policies in the regional policymakers’ toolbox to enhance research and innovation capabilities. Cluster policies complement well the concept of smart specialisation strategy (S3). Indeed, while cluster policies favour specialisation, S3 favours diversification in emerging regional sectors. As a result, regional policymakers must find the right balance between specialisation and diversification to promote regional economic development. 

Learn more online about Interreg Europe projects CLUSTERFY, CLUSTERIX2.0, CLUSTERS3 and STRING and their good practices. 

Learn online about the European Commission’s industrial cluster policy.

Image credit: Photo by Vojtech Okenka from Pexels
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