m kiese: a european proposal for comparative cluster policy research

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Matthias KieseInstitute for Competitiveness and Communication ICC

MOC Network Cluster Research WorkshopHarvard Business School, 12 December 2010

A European Proposalfor Comparative Cluster Policy Research

MOC Network Cluster Research Workshop Harvard Business School 12 December 2010 2


Silicon Valley Y ValleySilicon X

© Max-Peter Menzel

„Presidents, ministers, and dignitaries come in pilgrimage here, in well-publicized delegations that aim to capitalize the

visit in social prestige or political votes back home.“(Castells/Hall 1994, S. 12)

Motivation: Best Practice & Copycat Behavior

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• Diffusion of cluster policies across time and space• How? ⇒ Channels• Adaptation? ⇒ Policy Learning• What impact? ⇒ Evaluation

• Impact of structural & institutional variety on the design, implementation and effectiveness of cluster policies poorly understood

• E.g. varieties of capitalism (Hall/Soskice 2001) ⇒ liberal vs. coordinated market economies

• Constellations of actors in regional governance structures• Interdependencies across spatial scales ⇒ multilevel governance (cf.

Callaghan 2010)

⇒ Convergent vs. divergent forces⇒ Determine scope for policy learning

• Relationship between theory, empirical cluster research, policy and practice ⇒ Public Choice perspective

Guiding Questions



• Methodology

• Key concepts and findings

• Public Choice perspective (cf. Kiese 2008, Kiese/Wrobel forthcoming)

• Stylized facts

• Diffusion & policy learning (cf. Kiese 2010)

• Varieties of cluster policy (cf. Kiese 2009, Sternberg et al. forthcoming, Stockinger et al. 2009)

• Taking CCPR forward

Comparative Cluster Policy Research: Outline

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(Regional) Cluster Policy

• all efforts of government to develop and support clusters (in a particular region) (Hospers/Beugelsdijk 2002, p. 382)

• Industrial, structural, technology or innovation policy promoting regional specialisation

• Public efforts to develop concentrations of industry or network structures into clusters, or to promote existing clusters (cf. Bruch-Krumbein/Hochmuth 2000, p. 69 f.)

Cluster Initiative = an organised effort to increase the growth and competitiveness of a cluster within a region, involving cluster firms, government and/or the research community (Sölvell et al. 2003, p. 31)

Cluster Initiative vs. Cluster Policy



1) cf. Fromhold-Eisebith/Eisebith 2005, p. 1256

Governance1 Public Private

Cluster reference1 Implicit Explicit

Complexity Single Instrument Holistic Approach

Cluster Orientation Low High

Coherence Low High

Institutionalisation Weak Strong

Maturity Embryonic Completed

PPP

Dimensions of Cluster Policy

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Hannover Region:hannoverimpuls GmbH Wolfsburg AG

Projekt RegionBraunschweig GmbH

Regensburg

Nuremberg Region/Central Franconia

dortmund-project

Wuppertal-Solingen-Remscheid:

kompetenzhoch3

Cartography: Stephan Pohl

• Three federal states in West Germany

• North Rhine-Westphalia ~ mature industries facing structural change

• Bavaria ~ late industrialisation, high-tech

• Lower Saxony ~ ‘grey mass’region

• Regional typology ⇒ structural, institutional & political variance

• Seven sub-regional cases

• 110 semi-structured face-to-face interviews with 134 practitioners, observers & consultants (2006/2007)

Case Study Regions: Western Germany



AcademiaConceptual

Action Space

Economic

Rationality

Political Action Space

Political

Rationality

Practical Action Space

Bureaucratic

Rationality

Implementation

Electorate

P

P

P

A

A

A

AP

Principal-Agent-Constellation

Cluster TheoryMethods for Cluster

Identification & Analysis

Advice

Cf. Kiese 2008, p. 133

A Public Choice Model of Cluster Promotion

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“Even if the public authority that oversees the cluster is highlycompetent and attempts to maximise local welfare, an optimal cluster policy looks like something extraordinarily difficult to achieve.“

“Cluster policies that already look fraught with difficulties in a world of benevolent governments look extremely unappealing when political agency is explicitly taken into account.“(Duranton 2009, p. 26-27; emphasis added)

Public Choice Economics: Implications for Cluster Policy

• Welfare-enhancing cluster policies threatened by• multiple information asymmetries• political and bureaucratic rationalities• lobbying und rent seeking



• Porter’s definition only academic/theoretical reference• Cluster = “geographic concentrations of interconnected companies, specialized

suppliers, service providers, firms in related industries, and associated institutions (for example, universities, standards agencies, and trade associations) in particular fields that compete but also cooperate” (Porter 1998, p. 197 f.)

• General scepticism of theory; practical know-how and experience-based learning dominates

• daily duty leaves no time to deal with fragmented theory• no recognition of practical value• ‘academic’ approach conflicts with mobilisation of firms

• Technocratic understanding: clusters are ‘made’ and often equated with organised effort (initiative/policy) ⇒ danger of overlooking / crowding out organic cluster development

• Equation of clusters and networks ⇒ institutionalisation• Superficial reference to value chains ⇒ selectivity ⇒ rhetoric?!

Understanding of Clusters in German Policy and Practice

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Stylized Facts on Regional Cluster Policy in Germany

1. Technocratic understanding of clusters in policy & practice

2. For simplicity‘s sake, clusters are understood as networks3. Spatial mismatch between cluster and policy ⇒ over-/

underbounding

4. Temporal mismatch (short-termism vs. cluster development)

5. Herd behaviour (ICT, bio, nano…)

6. From horizontal demonstration effects to top-down diffusion7. Inflationary use of cluster term ⇒ meaning, credibility ⇓

8. Lack of explicit theoretical foundation/reference9. Sloppy identification of cluster potential

10. Declining cluster focus over time



AcademiaConceptual

Action Space

Economic

Rationality

Political Action Space

Political

Rationality

Practical Action Space

Bureaucratic

Rationality

Implementation

Electorate

P

P

P

A

A

A

AP

Principal-Agent-Constellation

Cluster TheoryMethods for Cluster

Identification & Analysis

Advice

Blurred action spaces and rationalities:• Politics and Bureaucracy

govern concept development

• Action purpose-led ⇒ unity of reason? (cf. Willgerodt 1994)

Cf. Kiese 2008, p. 133

Fuzzy Action Spaces of Cluster Promotion

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• Channels• Literature

• Academic• Best practice case studies• Manuals

• Mobility of personnel (dispositive/operative)• Consultants as transfer agents (Stone 2004)

• Knowledge communities• Epistemic communities (Haas 1992)

• Communities of practice (Brown/Duguid 1996)

• Journeys of politicians and practitioners (policy tourism)• Formal & informal communication (secondary)

Policy Transfer: Channels and Determinants

• Determinants (cf. Lütz 2007: 139-141)

• Endogenous = cultural, institutional, socio-economic proximity• Exogenous: frequency of interaction, networks, transfer agents• Transfer object: complexity, visibility, potential for conflict



Hannover Region:hannoverimpuls GmbH Wolfsburg AG

Projekt RegionBraunschweig GmbH

City of Regensburg

Nuremberg Region/Central Franconia District

dortmund-project

Bergisches Städtedreieck:kompetenzhoch3

Cartography: Stephan Pohl

• International projects, esp. U.S./ Silicon Valley ⇒ knowledge management

• ThyssenKrupp = key supplier to VW• Lower Saxony ⇒ Hannover region as pilot

project for new structural policy approach „regional growth concepts“

• State funding for concept development in Braunschweig region

• Further growth concepts in Weserbergland(2004), Süderelbe (2005)

• McK spin-off designed comparable projects in Wernigerode, Aachen

• 2005 prelim study for Bochum 2015

Consultants as Transfer Agents: The McKinsey Case

Cf. Kiese 2010

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Transfer Channels: Summary of Evidence

WidespreadConsultants

Common, but doubts about transferabilityJourneys

Low, limited to regional/national scene

German practitioners hardly participate in international KCs

Knowledge communities

Informal exchange btw state ministries, otherwise rarePersonal communication

Some cases in cluster management for transfer of procedural knowledgePersonnel mobility

low (limited to Porter’s definition, manuals hardly known nor used)Literature

Occurrence / RelevanceChannel

⇒ Overall low degree (inspiration, sometimes combination), path-dependent learning by doing tends to dominate

⇒ McKinsey projects = notable exception (copying, adaptation), but influence fading over time

⇒ Unilateral policy shopping as dominant mechanismCf. Kiese 2010



Interregional vs. Path-dependent Institutional Learning

based on Hassink/Lagendijk (2001: 69), also cf. Nonaka/Takeuchi 1995

Cluster approach

genericexplicit

accumulated experience, learning by doing

(„laboratory“)

local-specifictacit

(Re-)Contex-tualisation

Decoding

Adaption

Decontex-tualisation

Codification

Regional cluster concept

path-dependent learning (incremental, cumulative)

Interregional learning is embedded in path-dependent local learning processes.

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LiberalMarket Economies

CoordinatedMarket Economies

• More CIs initiated by companies

• More focused on export growth

• Stronger role of government in CIs

• More national cluster policies

• More focused on upgrading innovation

• More CI staff

• More trust across groups

Global Cluster Initiative Survey (GCIS II), Ketels et al. 2006, p. 221) Hall/Soskice 2001

Cluster Policy and Varieties of Capitalism1



Case Study Regions in the U.S.

Stockinger 2010, p. 66 (Cartography: Stephan Pohl)

• 3 states + 2 sub-regional caseseach

• 2007/2008: 87 interviews with practitioners, advisors and observers

PortlandSouthern Oregon

PhiladelphiaPittsburgh

Research Triangle

PiedmondTriad

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Cluster Policies in Germany vs. U.S.: Selected Differences

• Federal government: focus on workforce development and disadvantaged regions(reactive)

• States: Locational marketing and workforce development

• Federal & state governments: innovation policy ⇒ regional networks of science and industry to accelerate commercialization

• Regions: economic development, structural policy (holistic)

Policy area

• Strength in radical innovation, high-tech industries, commercialization aided by strong VC base

• Diffusion and absorptive capacity limited by skills constraints.

• Focus on incremental innovation, perceived problems with commercialization of scientific breakthroughs

• Dual system of vocational training supports diffusion and absorptive capacity through human capital.

National System of Innovation

• Individualism and competition• Less institutional thickness• Collective agency less formalized, less trust

and social capital2

• Cooperation and consensus• Institutional thickness1, neo-corporatism

(chambers, associations)• More collective agency, trust, social capital

Institutional setting

Germany U.S.

Implementation • Structural: Public & collective actors• Institutionalization, more political top-down

initiation• Higher organizational capacity3, but

technocratic (⇒ stylized facts)

• More private agency & reliance on individual leadership

• Flexible framework, but lack of strategic coherence

Cf. S

tockingeret al. 2009, Sternberg et al. (forthcom

ing)1) cf. Am

in/Thrift 1993; 2) cf. Putnam 1995; 3) van den Berg/B

raun 1999



• Horizontal expansion: Including more countries to increase variety (e.g. Kiese 2009)

• Perspectives proved useful• institutional (VoC, regional & multilevel governance)• policy diffusion/transfer and learning• Public Choice

• Conceptual broadening through new perspectives and tasks, e.g.• Isolated best-practice case studies ⇒ common framework for systematic

CCPR• Increase interdisciplinary research• need for independent scholarly evaluation

Comparative Cluster Policy Research: Towards an Agenda

• ECRP (European Collaborative Research Programme) as an opportunity, but 2011 call has been cancelled due to organizational transitions ⇒ new funding opportunities sought

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Amin, A.; Thrift, N.J., 1993: Globalization, Institutional Thickness and Local Prospects. In: Revue d'ÉconomieRégionale et Urbaine, (3): 405-427.

Brown, J.S.; Duguid, P., 1991: Organizational Learning and Communities of Practice: Toward a Unified View of Working, Learning, and Innovation. In: Organization Science, 2(1): 40-57.

Bruch-Krumbein, W.; Hochmuth, E., 2000: Cluster und Clusterpolitik. Begriffliche Grundlagen und empirische Fallbeispiele aus Ostdeutschland. Marburg: Schüren.

Callaghan, H., 2010: Beyond Methodological Nationalism: How Multilevel Governance Affects the Clash of Capitalisms. In: Journal of European Public Policy, 17(4): 564-580.

Castells, M.; Hall, P., 1994: Technopoles of the World: The Making of 21st Century Industrial Complexes. London, New York: Routledge.

Duranton, G., 2009: California Dreamin'. The Feeble Case for Cluster Policies. Toronto, 1 July 2009. http://individual.utoronto.ca/gilles/Papers/Cluster.pdf, last accessed 7 December 2010.

Fromhold-Eisebith, M.; Eisebith, G., 2005: How to Institutionalize Innovative Clusters? Comparing Explicit Top-down and Implicit Bottom-up Approaches. In: Research Policy, 34(8): 1250-1268.

Haas, P.M., 1992: Introduction. Epistemic Communities and International Policy Coordination. In: International Organzation, 46(1): 1-35.

Hall, P.A.; Soskice, D., 2001: An Introduction to Varieties of Capitalism. In: Hall, P.A.; Soskice, D. (ed.): Varieties of Capitalism: The Institutional Foundations of Comparative Advantage. Oxford: Oxford Univ. Press, 1-68.

Hassink, R.; Ladendijk, A., 2001: The Dilemmas of Interregional Institutional Learning. In: Environment and Planning C, 19(1): 65-84.

Hospers, G.-J.; Beugelsdijk, S., 2002: Regional Cluster Policies: Learning by Comparing? In: Kyklos, 55(3): 381-402.

References (1/3)



Kiese, M., 2008: Mind the Gap: Regionale Clusterpolitik im Spannungsfeld von Wissenschaft, Politik und Praxis aus der Perspektive der Neuen Politischen Ökonomie. In: Zeitschrift für Wirtschaftsgeographie, 52(2-3): 129-145.

Kiese, M., 2009: National Styles of Cluster Promotion: Cluster Policies between Variety and Convergence. In: Hagbarth, L. (ed.): Innovative City and Business Regions. (=Structural Change in Europe, 6). Bollschweil: Hagbarth Publications, 57-67.

Kiese, M., 2010: Policy Transfer and Institutional Learning: An Evolutionary Perspective on Regional Cluster Policies in Germany. In: Fornahl, D.; Henn, S.; Menzel, M.-P. (eds): Emerging Clusters: Theoretical, Empirical and Political Perspectives on the Initial Stage of Cluster Evolution. (=Industrial Dynamics, Entrepreneurship and Innovation). Cheltenham: Edward Elgar, 324-353.

Kiese, M.; Wrobel, M., forthcoming: Wagging the Analytical Dog: A Public Choice Perspective on Regional Cluster and Network Promotion in Germany. Paper accepted for publication in European Planning Studies.

Lütz, S., 2007: Policy-Transfer und Policy-Diffusion. In: Benz, A.; Lütz, S.; Schimank, U.; Simonis, G. (eds.): Handbuch Governance: Theoretische Grundlagen und empirische Anwendungsfelder. Wiesbaden: VS Verl. für Sozialwissenschaften: 132-143.

Nonaka, I.; Takeuchi, H., 1995: The Knowledge-creating Company: How Japanese Companies Create the Dynamics of Innovation, New York: Oxford Univ. Press.

Porter, M.E., 1998: Clusters and Competition. New Agendas for Companies, Governments and Institutions. In: Porter, M.E. (ed.): On Competition. (= The Harvard Business Review Book Series). Boston: The Harvard Business School Publishing, p. 197-287.

Putnam, R.D., 1995: Bowling Alone: America's Declining Social Capital. In: Journal of Democracy, 6(1): 65-78.Sölvell, Ö.; Lindqvist, G.; Ketels, C., 2003: The Cluster Initiative Greenbook. Gothenburg: Ivory Tower AB.

Internet-Quelle: http://www.ivorytower.se/eng/projgrnbk.htm (09.05.2006).

References (2/3)

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Sternberg, R.; Kiese, M.; Stockinger, D., forthcoming: Cluster Policies in the U.S. and Germany: A Varieties of Capitalism Perspective on Two High-Tech States. Paper accepted for publication in Environment and Planning C.

Stockinger, D.; Sternberg, R.; Kiese, M., 2009: Cluster Policy in Co-ordinated vs. Liberal Market Economies: A Tale of Two High-Tech States. Paper presented at the DRUID Summer Conference on Innovation, Strategy and Knowledge, Copenhagen Business School, 18-20 June, 2009. Copenhagen Business School. http://www2.druid.dk/conferences/viewpaper.php?id=5890&cf=32, last accessed 7 December 2010.

Stockinger, D., 2010: Handlungsräume und Akteure der Clusterpolitik in den USA: Implementierungsprozesse in North Carolina, Oregon und Pennsylvania aus politisch-ökonomischer und institutioneller Perspektive. Berlin: Logos.

Stone, D., 2004: Transfer Agents and Global Networks in the „Transnationalization“ of Policy. In: Journal of European Economic Policy, 11(3): 545-566.

van den Berg, L.; Braun, E., 1999: Urban Competitiveness, Marketing and the Need for Organising Capacity. In: Urban Studies, 36(5-6): 987-1000.

Willgerodt, H., 1994: Politische contra ökonomische Rationalität? Über die Interdependenz von Moral und Vernunft. In: Orientierungen zur Wirtschafts- und Gesellschaftspolitik, 60(2): 4-12.

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m kiese: a european proposal for comparative cluster policy research

Education

cluster firms

cluster policyeven

empirical cluster research

matthias kiese institute

matthias kieseinstitute

innovation policy

german policy

optimalcluster policy