OECD Reviews of Regional Innovation

1997-6585 (online)
1997-6577 (print)
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These reviews of regional innovation examine issues connected to innovation as the regional level as well as reviews of innovation policy for specific regions.
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Competitive Regional Clusters

Competitive Regional Clusters

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30 May 2007
9789264031838 (PDF) ;9789264031821(print)

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In today’s globalising world, the regional specialisations built up over decades are transforming rapidly. Many regions that were historically production centres in a given sector are losing out to lower-cost locations and reorienting to higher value-added niches.  National programmes to promote cluster-based approaches -- linking firms, people and knowledge at a regional level -- are being used to meet the challenge. This report analyses the objectives, targeting, instruments and inter-governmental role sharing used by 26 programmes in 14 OECD countries. It will be of interest to policy makers, researchers, firms and others active in promoting innovation and competitiveness.
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  • Executive Summary

    While the cluster concept is not new and remains subject to debate, national programmes based on a cluster model continue to be prominent and are adapted to an increasingly wide variety of contexts. The goal of the report is not to revisit a theoretical debate regarding definitions but rather to understand why, in practice, there is renewed policy interest in supporting clusters. Programmes use a range of cluster-type definitions and approaches but start from common assumptions about the value of the agglomeration of firms and the importance of linking people, skills and knowledge at a regional level.

  • Introduction
    While the cluster concept is not new and remains subject to debate, national programmes based on a general cluster model continue to be prominent and are adapted to an increasingly wide variety of contexts. This study assesses different national level strategies and instruments used to promote regional specialisation and clusters. The theoretical concepts are not new and the debates continue about the empirical evidence supporting the benefits of regional specialisation and clusters. The goal of the report is not to revisit a theoretical debate regarding definitions. Rather, it seeks to understand why, in practice, there is renewed policy interest in promoting specialisation and clustering as both a general economic development tool and a means to achieve greater regional and national competitiveness. These national level initiatives have been complemented by numerous programmes at the local level.
  • Why Are Cluster Policies Popular, Again?
    This chapter discusses four main issues related to the concept of clusters. First, the chapter reviews the variation in definitions of clusters and related concepts. It highlights the theoretical benefits to the clustering of firms and related actors as well as the risks associated with policies to support clusters. It then explores the role of clusters in the context of globalisation, as the changing nature of value chains has an impact on the way clusters and regional economies evolve. Finally, the chapter addresses the challenges of moving from the theory behind clusters to the role that policy can play.
  • Where Do the Programmes Originate?
    This chapter explores the origins of the numerous policies with a cluster-based approach, either implicit or explicit. It reviews the nature of shifting priorities in regional policy, science and technology (S&T)/ innovation policy and industrial/enterprise policy that all lead to such policies. It then illustrates how case study programmes fit into these policy frameworks. Finally, it considers how the objectives of these programmes are converging across policy streams and changing over time.
  • How Do Programmes Pick Participants?
    This chapter discusses the important steps in policy design for selecting programme participants. First it explores the policy targets since that choice needs to map to the underlying problem the policy seeks to solve. It then reviews the different methods of identifying the potential targets, which may be quantitative or qualitative or a combination of the two. Finally, it analyses the different selection mechanisms used by the programmes and the appropriateness of those methods relative to the policy’s goals and targets.
  • What Instruments Do They Use and How?
    This chapter highlights the different instruments used in the cluster-based programmes across OECD countries. It first reviews the categories of instruments frequently used, notably to engage actors, provide collective services and/or promote collaborative research. It then discusses issues of programme duration and funding. Finally it concludes with examples of effective synergies and linkages across programmes to serve the wide variety of cluster types.
  • Who Does What? Governance
    As policies to support clusters are coming from many different levels of government, this chapter explores the issue of governance. It reviews the different strategies used by national level governments to co-ordinate across different ministries and agencies. It then analyses the different strategies used in the articulation of national versus regional roles for supporting clusters. The strategies used to develop policy coherence across levels of government are considered. Finally, it identifies strategies that have been successful in ensuring private sector engagement in such programmes.
  • What Have We Learned?
    This chapter explores one of the most challenging aspects of clusterbased policies, evaluating their effectiveness. First it addresses the question of what should be evaluated, as the answer to this question varies by stakeholder needs. Second, it reviews many of the lessons learned from the different programmes studied in OECD countries. Finally, it highlights the areas for future research.
  • Canada
    This chapter is a case study on a national level cluster programme sponsored by Canada’s National Research Council. The Technology Cluster Initiatives seek to foster the development of innovationdriven clusters in regions across Canada.
  • Czech Republic
    This chapter is a case study on the Czech Republic’s Klastry (clusters) programme that supports the development of sectoral competencies and networking, mainly among firms, in all regions outside of Prague and with support from EU Structural Funds.
  • Finland
    This chapter offers a case study on two programmes to support clusters in Finland. The National Cluster programme was a strategy in the late 1990s to support Finland’s most prominent industry clusters as selected by different sectoral ministries through increased R&D financing for collaborative projects. The current flagship programme is the Centers of Expertise that support the development of expertise, firm creation and innovation in different regional urban hubs, usually in conjunction with technology parks.
  • France
    This chapter is a case study on two programmes in France with a cluster-based approach. The SPL programme began in the late 1990s and supports networking among small firms in French industrial districts. The more recent Pôles de compétitivité programme is France’s main competitiveness policy that supports collaborative industryresearch projects in both "international" and "regional" clusters.
  • Germany
    This chapter is a case study on a range of programmes in Germany, emanating from various policy streams with a cluster-based approach, with a special focus on three of the most prominent programmes. The BioRegio programme served to concentrate research funds in a limited number of regions to support biotechnology, a sector of strategic national interest. The InnoRegio programme seeks to improve the innovation capacity of the lagging new Länder in Eastern Germany with support from EU Structural Funds. The GA-network initiative is a funding negotiation tool between the federal level and Länder to provide funding for projects that improve collaboration among regional actors with a strong research focus.
  • Italy
    This case study explores several different approaches in Italy that have a cluster orientation, with a focus on two in particular. One unique approach in OECD countries is the integration of the cluster concept into public service delivery. Law 317 (91), and its subsequent revisions to improve flexibility in its application, established a framework for regional governments to support consortia of small firms. Technological Districts have been created in the context of science and technology policy to improve collaboration for the funding, research and application of results in fields with strong commercial interest and social value. EU structural funds were used for southern Italy districts.
  • Japan
    This case study reviews two explicit cluster programmes in Japan. The Japanese Knowledge Clusters are centred around key universities and seek to promote greater university-industry collaboration. The Industrial Cluster programme supports SMEs and research links in a range of regional area types through business incubation and support services with a strong focus on effective relationships among industry, university and government.
  • Korea
    This case study covers Korea’s Innovative Cluster Cities programme. It is an important initiative for the country and is linked with three policy streams. The programme seeks to assist a group of large industrial complexes in selected regional centres convert from manufacturing centres to regional innovation systems.
  • Netherlands
    This case study covers two approaches in the Netherlands that have a cluster-based component. Peaks in the Delta is the nation’s new regional policy that promotes economic development in regions, with funds channeled in part to clusters selected by these regions. The Key Innovation Areas are part of the nation’s innovation strategy but also have a strong regional impact. The goal of this approach is to strengthen those areas of competence important to the Netherlands with a strong role for innovation.
  • Norway
    This case study reviews two complementary cluster programmes in Norway. The Arena programme supports innovative networks to strengthen the interaction between the business sector, knowledge providers and the public sector using a flexible approach with respect to sector, region and cluster development stage. The Norwegian Centres of Expertise programme seeks to initiate and enhance co-operative innovation and internationalisation processes in a limited number of clusters of national significance with potential for innovation-led growth.
  • Spain: The Basque Country
    This case study explores a programme to support clusters by the Basque Country Government in Spain. This on-going cluster policy to develop the Basque Country’s competitiveness began in the early 1990s and focuses on the development of cluster initiatives in the largest industries in the region.
  • Sweden
    This case study for Sweden discusses three programmes developed at the national level. VINNVÄXT is the leading programme of VINNOVA, the Innovation Agency, to support collaborative research with a strong potential for innovation. Visanu is a joint programme across three Swedish agencies to engage actors and promote knowledge sharing across clusters. The latest programme, sponsored by Nutek, the Swedish Agency for Economic and Regional Growth, is the Regional Cluster programme for clusters seeking to increase their international competitiveness.
  • United Kingdom
    As there is no nationally managed cluster programme per se, this case study for the United Kingdom reviews a range of cluster initiatives supported by the Department of Trade and Industry that are designed and implemented by the Regional Development Agencies (RDAs) and the Devolved Administrations (DAs). Programmes vary but have included commissioning regional mapping studies, identifying and building links with important regional clusters and using clusters as the vehicle for wider economic development initiatives.
  • United States: Georgia
    The United States has no national level cluster-based policies, therefore this chapter explores one strategy in the state of Georgia to build strong science-driven clusters. The Georgia Research Alliance is a private sector-initiated entity to channel state R&D funds to industry-research collaborative projects at different stages in the commercialisation process as well as attract top researchers to the state.
  • United States: Oregon
    This case study of the state of Oregon in the US highlights two separate cluster-based strategies as opposed to programmes. The Oregon Cluster Industries strategy is helping to refocus the state’s economic development efforts around the identified industry clusters. The Oregon Cluster Network is a private entity that promotes the cluster concept, supports knowledge sharing among cluster initiatives and serves as a nexus for helping to inform public policy to better serve cluster needs.
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