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Changing Paradigm of Cluster Development: Learning from Global Experiences

Promoting Innovation in Clusters

Prof. Christian Ketels

President, TCI NetworkPrincipal Associate,

Harvard Business School

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GLOBAL

NETWORK

TERRITORY

CLUSTER

INNOVATION

PRACTITIONERS

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Who forms the TCI Network?60+ Organizational Members

•National and regional agencies•Cluster organizations•Multilateral agencies•Academic institutions•Companies

500+ individual members 9000+ professionals reached

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INFORM CONNECT

Conferences•Global (Mexico)•Regional (Australia, Europe, North America)•Topical (ICT Clusters)

Regional groups•Latin America•Europe•Australia

Member Services•Interest groups•Peer reviews•Project participation•Mentor matching•Professional development

COLLABORATE

Website/Social Media•Newsletter•Cluster Database•Articles/Knowledge Center•LinkedIn-Group, YouTube-Channel, etc.

What Does The TCI NETWORK Offer?

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How Can You Get Engaged?

Follow…

Participate…

And Join…

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Promoting Innovation in Clusters

• Innovation is getting more critical than ever for – firms’ competitive success – locations’ sustained prosperity growth

• Innovation, especially science-driven innovation, remains highly concentrated in a few locations globally

• Innovation requires a combination of – individual excellence – local dynamism– global linkages

• Does cluster presence benefit innovation performance?• How can clusters be used to stimulate innovation?

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Innovation Means...Different Things in Different Locations

• The impact of innovation on a location depends on the diffusion of innovative performance across the entire economy, not just isolated success

Assimilate Adapt Create

…global knowledge, technology, and practices

…valuable new knowledge, technology, practices, and products and services

…global knowledge, technology, and practices to local needs and circumstances

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Does Cluster Presence Benefit Innovation Performance?Empirical Evidence

Prosperity Entrepreneurship Structural Change

Positive correlation between share of regional

employment in strong clusters (breadth of clusters; related cluster strength) and:

• Wages

• Productivity

• Job growth

• Patenting

Positive correlation between share of regional

employment in strong clusters (strength of related

cluster) and:

•New business formation in new/existing industries

•Survival of new firms

•Job growth in new firms

Path of structural change (emergence of new clusters)

in regional economies is driven by legacy of

composition (portfolio of existing clusters)

e.g. Porter (2003), Greenstone (2008). Delgado/Porter/Stern (2012),

Ketels/Protsiv (2013), Aharonson et al (2013)

e.g., Delgado/Porter/Stern (2011), Lindqvist/ Wennerberg (2008)

e.g., Neffke et al (2009); Boschma et al. (2013)

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How Can Clusters Be Used to Stimulate Innovation?

Delivery channel

to upgrade the excellence of many, especially smaller, organizations

Instrument

to enhance the global visibility and connectedness of the cluster

Platform

to organize collective action for upgrading the business environment

Platform

to enhance business linkages between entities in the cluster

ClusterOrganization

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Key Issues for India

• Match the objectives of cluster efforts with the needs of the economy

• Match the structure of the support efforts with the existing institutional capacity

• Use different types of cluster efforts in different situations (i.e,, high tech, manufacturing, handicrafts, etc.)

• India can benefit significantly from cluster efforts and has a lot to learn from the international experience

• A successful Indian cluster program will be an Indian answer to Indian needs, not a copy of foreign efforts