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Clusters, innovation, competitiveness
and policy
TCI Global Conference, Auckland, 29 November 2011
Göran Lindqvist
CSC, Stockholm School of Economics
Four questions
What are clusters?
How do clusters arise?
What are the benefits of clusters?
What need is there to support clusters?
Lindqvist, TCI Global Conference, 29 Nov 20113
Lindqvist, TCI Global Conference, 29 Nov 20114
1
What are clusters?
Lindqvist, TCI Global Conference, 29 Nov 20115
Alfred Marshall
Principles of Economics, 1890
Lindqvist, TCI Global Conference, 29 Nov 20116
Staffordshire
pottery
Buckinghamshire
chairs
Bedfordshire
straw plaiting
Sheffield
cultery
Lindqvist, TCI Global Conference, 29 Nov 20117
Giacomo Becattini Paul Krugman Michael Porter
1990
What are clusters?
Clusters are groups of
geographically proximate
firms in related industries
and related institutions
Lindqvist, TCI Global Conference, 29 Nov 20118
Lindqvist, TCI Global Conference, 29 Nov 201110
Lindqvist, TCI Global Conference, 29 Nov 201111
Surfboard
makers
Surf
clothing
Surf
shops
Foam &
fiberglass
Wax
Chemicals
Local
university
Other
local
education
Competitions
Festivals
Surf Clubs
Surf Schools
Manu-
facturing
Association
Lobby
Groups
MuseumsSkateboards
and
Snowboards
Local
surf
heroes
Media
Source: HBS MOC student team
Lindqvist, TCI Global Conference, 29 Nov 201112
Firms
Research
organisation
s
Education
organisations
Governmen
t
Capital
providers
Lindqvist, TCI Global Conference, 29 Nov 201113
2
How do clusters arise?
How do clusters arise?
Clusters are naturally occurring phenomena
The grow out of seeds such as:
o natural resources
o particular local demand
o acts of entrepreneurship
Evolution versus construction
o Most clusters have evolved spontaneously
o Some clusters are built as acts of policy
Lindqvist, TCI Global Conference, 29 Nov 201114
Lindqvist, TCI Global Conference, 29 Nov 201115
3
What are the benefits of
clusters?
What are the benefits of clusters?
Mechanisms
Externalities: when firms benefit from the
presence of other firms in ways they don’t
have to pay for
Access to highly specialised inputs
Knowledge spill-overs
Local labour pool
Lindqvist, TCI Global Conference, 29 Nov 201116
What are the benefits of clusters?
Competitiveness
Increased innovation
Increased entrepreneurship
Lindqvist, TCI Global Conference, 29 Nov 201117
Lindqvist, TCI Global Conference, 29 Nov 201118
4
What need is there to
support clusters?
A cluster…
19
Government Research
organisations
Education
organsiations
Capital
providers
Companies
G. Lindqvist, 2011SSE
MOC
20
Government Research
organisations
Education
organsiations
Capital
providers
Companies
G. Lindqvist, 2011SSE
MOC
A cluster… or isolated islands?
SSE MOC 2011 - Session 621G. Lindqvist, 2011
Strong
interaction
Weak interaktion
Good knowledge
Dense networks
Common “language”
Similar norms and
attitudes
Shared vision
High trust
Positive incentives
Poor knowledge
Sparse networks
Different “languages”
Different norms and
attitudes
Different visions
Low trust
Negative incentives
Reality is inefficiencies
+ Knowledge failures
+ Network failures
+ Collaboration failures
+ Coordination failures
= Innovation failures
22
G. Lindqvist, 2011SSE
MOC
The seven gaps of innovation
23
1
23
4
5
The research
gap
The education gapThe capital gap
Government gap
The company-to-
company gap
G. Lindqvist, 2011SSE
MOC
6
G. Lindqvist, 2011
24
SSE
MOC
Cluster-to-
cluster gap
7
G. Lindqvist, 2011
25
SSE
MOC
Global market
gap
Contact
Göran Lindqvist, PhD
Center for Strategy and Competitiveness
Stocholm School of Economics
www.sse.edu/csc
goran.lindqvist@hhs.se
+46 8 7369524
26 Lindqvist, TCI Global Conference, 29 Nov 2011

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Cluster basics: Clusters, Innovation, Competitiveness and Policy

  • 1.
  • 2. Clusters, innovation, competitiveness and policy TCI Global Conference, Auckland, 29 November 2011 Göran Lindqvist CSC, Stockholm School of Economics
  • 3. Four questions What are clusters? How do clusters arise? What are the benefits of clusters? What need is there to support clusters? Lindqvist, TCI Global Conference, 29 Nov 20113
  • 4. Lindqvist, TCI Global Conference, 29 Nov 20114 1 What are clusters?
  • 5. Lindqvist, TCI Global Conference, 29 Nov 20115 Alfred Marshall Principles of Economics, 1890
  • 6. Lindqvist, TCI Global Conference, 29 Nov 20116 Staffordshire pottery Buckinghamshire chairs Bedfordshire straw plaiting Sheffield cultery
  • 7. Lindqvist, TCI Global Conference, 29 Nov 20117 Giacomo Becattini Paul Krugman Michael Porter 1990
  • 8. What are clusters? Clusters are groups of geographically proximate firms in related industries and related institutions Lindqvist, TCI Global Conference, 29 Nov 20118
  • 9. Lindqvist, TCI Global Conference, 29 Nov 201110
  • 10. Lindqvist, TCI Global Conference, 29 Nov 201111 Surfboard makers Surf clothing Surf shops Foam & fiberglass Wax Chemicals Local university Other local education Competitions Festivals Surf Clubs Surf Schools Manu- facturing Association Lobby Groups MuseumsSkateboards and Snowboards Local surf heroes Media Source: HBS MOC student team
  • 11. Lindqvist, TCI Global Conference, 29 Nov 201112 Firms Research organisation s Education organisations Governmen t Capital providers
  • 12. Lindqvist, TCI Global Conference, 29 Nov 201113 2 How do clusters arise?
  • 13. How do clusters arise? Clusters are naturally occurring phenomena The grow out of seeds such as: o natural resources o particular local demand o acts of entrepreneurship Evolution versus construction o Most clusters have evolved spontaneously o Some clusters are built as acts of policy Lindqvist, TCI Global Conference, 29 Nov 201114
  • 14. Lindqvist, TCI Global Conference, 29 Nov 201115 3 What are the benefits of clusters?
  • 15. What are the benefits of clusters? Mechanisms Externalities: when firms benefit from the presence of other firms in ways they don’t have to pay for Access to highly specialised inputs Knowledge spill-overs Local labour pool Lindqvist, TCI Global Conference, 29 Nov 201116
  • 16. What are the benefits of clusters? Competitiveness Increased innovation Increased entrepreneurship Lindqvist, TCI Global Conference, 29 Nov 201117
  • 17. Lindqvist, TCI Global Conference, 29 Nov 201118 4 What need is there to support clusters?
  • 20. SSE MOC 2011 - Session 621G. Lindqvist, 2011 Strong interaction Weak interaktion Good knowledge Dense networks Common “language” Similar norms and attitudes Shared vision High trust Positive incentives Poor knowledge Sparse networks Different “languages” Different norms and attitudes Different visions Low trust Negative incentives
  • 21. Reality is inefficiencies + Knowledge failures + Network failures + Collaboration failures + Coordination failures = Innovation failures 22 G. Lindqvist, 2011SSE MOC
  • 22. The seven gaps of innovation 23 1 23 4 5 The research gap The education gapThe capital gap Government gap The company-to- company gap G. Lindqvist, 2011SSE MOC
  • 25. Contact Göran Lindqvist, PhD Center for Strategy and Competitiveness Stocholm School of Economics www.sse.edu/csc goran.lindqvist@hhs.se +46 8 7369524 26 Lindqvist, TCI Global Conference, 29 Nov 2011