Cluster buster: 2,000 clusters is too many, says Commission

22 Oct 2008 | News
Europe’s high-tech clusters are failing to reach their full potential. We need encourage more cooperation, says the Commission.

Unless they straddle international borders, you'd think clusters like the IT cluster around Cambridge University, the automotive cluster around the Daimler Chrysler's factories in Stuttgart and the mobile technologies cluster around Nokia labs in Oulu in Finland, would fall outside the remit of the European Commission. After all, they are defined by their specific locations, which almost always is within a region of one country of another.

Making clusters happen

This summer, the Science|Business Innovation Board, a blue-ribbon panel of leaders in industry, academia and policy, published its own views of cluster policy in the Financial Times, El Pais, La Tribune, De Standaard and other European newspapers. Its message: Focus resources on centres of excellence, and create innovation zones around those centres to get special incentives for cluster development. Read the Board’s views here: Making clusters happen.

Think again. After consulting widely among firms and researchers over the summer, the European Commission said last week that the estimated 2,000 clusters dotted around the 27 member states in the EU are failing to realise their full potential and it recommends ways for them to do so.

An imperfect single European market and the absence of strong links between industry and the research community are the main problems. They prevent most clusters in the EU from attaining the critical mass needed to compete globally, the Commission said.

“We need more world-class clusters in the EU. Clusters play a vital role in the much needed innovation of our businesses,” said Commission vice president Gunter Verheugen, suggesting that policy efforts should focus more on creating “openness for cooperation” between clusters in different parts of the EU.

Failure to cooperate across national borders has resulted in an “unnecessary proliferation of cluster initiatives”, instead of a more coordinated fostering of regional specialisations, the Commission's study found.

Verheugen said he respects the competitive, market-driven nature of clusters. But the policy line the Commission has taken doesn't support this, said Rufus Pollock, an economist at Cambridge University.

The economic benefits of geographical proximity are well documented, and result in a natural process of clustering of research institutes, firms and a skilled labour force, he said.

“Silicon Valley, the most famous cluster of them all, may have benefited from defence department orders in the wake of World War II but its massive expansion over the past two decades wasn't planned,” he said in a telephone interview, adding, “I can't see why the Commission is interfering in this area. Its time would be better spent helping to boost basic research and broader levels of education in the EU, and leaving it up to businesses to find the economic rationale for choosing their location.”

The lack of cooperation between clusters around the EU is mainly due to a lack of trust and conflicts of interest between potential or actual competitors, the Commission’s study found.

To combat this, the Commission proposes creating a service to clusters and innovative enterprises for, “fostering transnational cooperation by developing partnerships across the EU.”

It also wants to set up a European Cluster Policy Group to explore how best to assist Member State governments in supporting the emergence of world-class clusters.

And it proposes launching training programmes and creating platforms to foster cooperation among cluster managers from around the EU. “This smacks of public sector innovation planning of the worst kind,” said Pollock.

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