Identification of Knowledge-driven Clusters in the EU · Clusters within the Context of Transaction Cost Economics Transaction cost economics forms a major sector of New Institu-tional

Research and Innovation

Identification ofKnowledge-driven Clusters in the EU

EUROPEAN COMMISSION

Directorate-General for Research and InnovationDirectorate C — Directorate for Research and InnovationUnit C6 — Economic analysis and indicators

Contact: Adrian Pascu

European CommissionOffice SDME 09/088B-1049 Brussels

E-mail: [email protected]

EUROPEAN COMMISSION

Prepared by Dr. Thomas Stahlecker, Dr. Henning Kroll and

Elisabeth Baierof Fraunhofer

Directorate-General for Research and Innovation Capacities: Support for the Coherent Development of

Research Policies FP7 2012 EUR 24200 EN

Identification of Knowledge-driven Clusters

in the EU

Project financed by the 6th Framework Programme for Research, for the implementation of the specific programme “Strengthening the Foundations of the

European Research Area”(Invitation to tender n° DG RTD 2005 M 02 02)

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Table of Contents I Introduction ......................................................................................................................................................................................................... 5

Clusters – A Brief Introduction to the Issue under Study ........................................................................................................................................ 5 The Cluster Concept................................................................................................................................................................................................. 5 Clusters within the Context of Transaction Cost Economics................................................................................................................................... 6 Cluster Policy of the European Union...................................................................................................................................................................... 7 European Cluster Alliance........................................................................................................................................................................................ 9 European Innovation Platforms for Clusters (Cluster-IP)........................................................................................................................................ 9 European Cluster Excellence Initiative .................................................................................................................................................................... 9 European Cluster Observatory ............................................................................................................................................................................... 10

II Approaches to Measure Clustering ................................................................................................................................................................... 11 General Considerations .......................................................................................................................................................................................... 11 A Typology of Clusters .......................................................................................................................................................................................... 12 Methodology .......................................................................................................................................................................................................... 12

III Evidence of Clustering ...................................................................................................................................................................................... 14 Aerospace ............................................................................................................................................................................................................... 16 Case Study I: Aviation Cluster of the Hamburg Metropolitan Region............................................................................................................................................................... 17 Case Study II: The Pôle Pégase Competitiveness Cluster .................................................................................................................................................................................. 18 Automotive............................................................................................................................................................................................................. 19 Case Study I: Automotive Cluster CENTROPE ................................................................................................................................................................................................ 19 Case Study II: The Automotive Cluster in West Sweden................................................................................................................................................................................... 20 Information Technologies (IT)............................................................................................................................................................................... 22 Case Study I: Region Provence Alpes Cote d’Azur, the SCS Cluster................................................................................................................................................................ 22 Case Study II: I-Region Karlsruhe ..................................................................................................................................................................................................................... 23 Communication Technologies................................................................................................................................................................................ 24 Case Study I: ICT Cluster Brittany .................................................................................................................................................................................................................... 26 Case Study II: ICT Cluster in Stockholm........................................................................................................................................................................................................... 27

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Medical Technologies ............................................................................................................................................................................................ 28 Case Study I: Medical Technology/Bioscience Wales ....................................................................................................................................................................................... 28 Case Study II: Medical Technology in Denmark and Medicon Valley.............................................................................................................................................................. 29 Biopharma .............................................................................................................................................................................................................. 31 Case Study I: The Scottish Biotech Cluster – Dundee/Edinburgh/Glasgow Triangle........................................................................................................................................ 33 Case Study II: The Cambridge Biotechnology Cluster ...................................................................................................................................................................................... 34 Chemical Technologies .......................................................................................................................................................................................... 35 Case Study I: The International Competitiveness Cluster Lyon and Rhône-Alpes - Chemicals and Environment ........................................................................................... 36 Case Study II: Chemicals Northwest (UK) ........................................................................................................................................................................................................ 39 Instruments ............................................................................................................................................................................................................. 40 Case Study I: The Sensor Technology Cluster in Bavaria.................................................................................................................................................................................. 40 Case Study II: The Mechatronics Cluster Denmark ........................................................................................................................................................................................... 42 Summary ................................................................................................................................................................................................................ 43

IV The Evolution of Clusters ................................................................................................................................................................................. 47 Development Stages of Clusters............................................................................................................................................................................. 47 Development Stages of Cluster Support ................................................................................................................................................................ 50 In-Depth Case Study I: The Aerospace Cluster in the Toulouse Region............................................................................................................................................................ 51 In-Depth Case Study II: The Mechatronics Cluster in the Vallée de l’Arve ...................................................................................................................................................... 53 In-Depth Case Study III: The Biotechnology Cluster Munich and the BioM –Biotech Cluster Development GmbH ...................................................................................... 55 In-depth case study IV: The ICT cluster in Helsinki .......................................................................................................................................................................................... 57

V An Overview of European Cluster Policies ...................................................................................................................................................... 61 VI Summary and Policy Conclusions ........................................................................................................................................................................ 64

Summary ................................................................................................................................................................................................................ 64 Policy Conclusions ................................................................................................................................................................................................. 66

Annex ......................................................................................................................................................................................................................... 68

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List of Tables and Figures

Table 1: Employment and Patent Applications in Selected Fields........................................................................................................................ 14 Table 2: Overview of Case Studies ....................................................................................................................................................................... 44 Figure 1: Clusters in Aerospace.............................................................................................................................................................................. 16 Figure 2: Clusters in the Automotive Field............................................................................................................................................................. 19 Figure 3: Clusters in the Information Technology (IT) Field ................................................................................................................................. 22 Figure 4: Clusters in the Field of Communication Technology ............................................................................................................................. 25 Figure 5: Clusters in the Field of Medical Technologies........................................................................................................................................ 28 Figure 6: Clusters in the Field of Biopharma.......................................................................................................................................................... 31 Figure 7: Clusters in the Field of Chemical Technologies .................................................................................................................................... 35 Figure 8: Clusters in the Field of Instruments ........................................................................................................................................................ 40 Figure 9: Technological and Cluster Life Cycles ................................................................................................................................................... 47 Figure 10: The Evolution of the Heterogeneity of Knowledge in Clusters .............................................................................................................. 48 Figure 11: Different Stages of Development in Clusters.......................................................................................................................................... 48 Figure 12: The Development Process of Political Cluster Support .......................................................................................................................... 50 Figure 13: Number of Cluster Initiatives in European Regions ............................................................................................................................... 61 Figure 14: Budget of Cluster Initiatives in European Regions (Incomplete) ........................................................................................................... 62 Figure 15: Structural Fund Allocations under Expenditure Category 03 which can be used to finance Cluster Initiatives .................................... 63

Knowledge-driven clusters in the EU

I Introduction Clusters – A Brief Introduction to the Issue under Study

Clusters or the empirical phenomenon of geographical concentration of economic and innovation activities are becoming an increasingly popular concept which is reflected in a growing number of policies and initiatives – at the regional, national and supra-national level – in support of clusters. The prominence of the cluster idea that was in particular triggered by Porter (1990) and Enright (1990) is not too surprising since “...both, firms keen to improve their competitive-ness, and governments keen to exploit new sources of economic growth, need to understand how innovation works in order to better stimulate it” (OECD 1999). There are many indications that, increas-ingly, regional growth and innovation seem to emerge from innova-tive complexes of firms and organizations. It is argued that it is pri-marily within these geographically concentrated networks or clusters that regional value-added and employment growth are realized. Ac-cording to Forslid/Midelfart Knarvik 2002, policymakers care about industrial, innovation or technology clusters and their geographical location, since clusters are associated with rents. Membership of clusters and inter-firm networks is strongly believed to enhance the productivity, and competitive performance of firms.

Against the background of growing experience with the implementa-tion of cluster policies at the regional and national level of many European countries, as well as policy initiatives and instruments de-veloped at the Community level to complement national and re-gional efforts in this policy field, the main objective of the present Regional Key Figures Booklet is to empirically determine clusters in the European Union in eight industries/technology fields. These are believed to play a significant role in the present and future techno-logical capability of the respective country and the EU as a whole and thus are crucial in terms of competitiveness and employment. Based on the results of the quantitative analysis, qualitative case

studies for each of the eight industry/technology fields were con-ducted in order to get a precise inside view of the characteristics, functionalities and impacts of “good practice” examples. Both meth-odological approaches will – as a result of the analysis – be mirrored in the cluster-related activities already implemented by the Commis-sion, in order to reflect on new policy tools or on mechanisms to ap-ply existing policies more effectively.

The Cluster Concept

The cluster(ing) concept is but one concept that flourished over the past two decades (Asheim et al. 2006), building on microeconomic and economic-geographic discourses explaining spatial concentra-tion on the basis of static and dynamic localization economies. Only slowly recognizing the importance of the spatial dimension of his cluster concept, Porter (1990) conceptualized clusters as groups of firms operating in related branches of industry at the level of final products, raw materials, equipment, machinery and services, for in-stance, competitors, users and producers of intermediary and final products, and producers of complementary goods and services. Four sets of factors – firm strategy, structure and rivalry, factor condi-tions, demand conditions, and related/supported industries - accord-ing to Porter, are constitutive with a view to functional and techno-logical interactions causing a benefit regarding productivity, innova-tiveness and competitiveness of clustered firms. Taking into account the spatial dimension in his later articles (Porter 1998), Porter de-fined clusters as “geographic concentrations of interconnected com-panies, specialized suppliers, service providers, firms in related in-dustries, and associated institutions in particular fields that compete but also cooperate”. However, given the fact that in the meantime many definitions of clusters have emerged, the common element in most cluster definitions is the aspect of concentrating one or more sectors within a given region as well as the emphasis on networking, competition and cooperation between companies and institutions.

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Figure 1 defines clusters and networks by unravelling two processes – spatial concentration and relational development. Although net-working and network structures are central in most cluster defini-tions, the cluster and network concept constitute two separate and potentially complementary concepts. Thus, Visser (2009) underlines that not all the spatial concentration and agglomeration processes present in modern economies are clusters, not all clusters are based on networks or networking behaviour, not all local or regional net-works develop in clusters, and networks may well develop beyond local or regional borders, especially when it comes to enhancing learning and innovation. Figure 1: Spatial concentration and relational development of clusters

Source: Visser (2009)

Clustering processes – particularly in the knowledge-based economy – are economically driven by immaterial factors. This framework emphasizes the reasons behind the co-location of firms (Rychen/Zimmermann 2008). As space is not a direct factor in the production process, it is introduced through the location of the agents with whom the productive unit is connected. Within this con-text, knowledge is an external factor that can influence the innova-tive process within firms, and the magnitude of the effect is more or less a function of the number of links with other agents (Dyer/Nobeoka 2000). Recent models of strategic link formation consider inter-firm links as a means of capturing knowledge spill-

overs and so reducing production costs, encouraging firms to enter into research and development (R&D) partnerships with each other (Deroian 2006). The fact that knowledge links can be endogenous gives meaning to the fact that knowledge linkages between firms are not evenly distributed and why a certain structure in the process of knowledge diffusionprobably exists. Access to knowledge resources in geographical proximity depends on an active involvement in knowledge exchange networks and skilled labour markets. There-fore, if space matters, this is both because and inasmuch as social links are usually denser in a context of spatial proximity (Rychen/Zimmermann 2008).

As far as learning and innovation are concerned, geographical prox-imity appears to be crucial, since there are important dissimilarities and complementarities between the cognitive repertoires of the part-ners (learning by interacting) (Malmberg/Maskell 2005). In general, the construct of collective learning is one of the most central issues addressed in the debate about clusters. Thus, most researchers em-phasize collective learning when referring to the advantages of so-cial interaction, cognitive proximity, social capital, and so forth. Ac-cording to Staber (2009), the social nature of clusters enables not only communication but also learning, and it is through shared learn-ing that coordination and innovation are facilitated.

Clusters within the Context of Transaction Cost Economics

Transaction cost economics forms a major sector of New Institu-tional Economics and is often referred to within the context of the theoretical foundation of cluster and network arrangements (Koschatzky 2001, Sydow 1992). In general, transaction cost eco-nomics pay attention to competitive- and market-oriented transac-tions which are - as a rule - characterised as hierarchical, vertical de-pendencies and contractual arrangements. According to Coase (1960), transaction costs originate in the course of searching for con-tractual partners, the information of potential partners on contract

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intentions, the contract preparation and the controlling of the con-tract. Williamson (1990) defines transaction costs as costs for eco-nomic contracts as well and differentiates between ex-ante-transaction costs (costs for the concept, negotiations and safeguard-ing of an agreement) and ex-post transaction costs (costs occurring in the course of the contract period). According to North (1990), transaction costs occur during the assessment of the value character-istics of exchange factors and during the assurance of property rights as well as the assertion of contracts: „Costs of transaction ... consist of the costs of measuring the valuable attributes of what is being ex-changed and the costs of protecting rights and policing and enforcing agreements“(North 1990: 27).

As for the theoretical foundation of cluster and network formation, transaction-cost-reducing characteristics of cluster and network ar-rangements are identified as follows (Sydow 1992): • Long-lasting arrangements between suppliers or clients reduce

the transaction-cost-specific investment risk. • Network-specific stable and intensive exchange relationships

enable a precise knowledge of the strengths and weaknesses of potential clients or suppliers and ultimately result in lower costs for search and negotiation.

• The creation of inter-organisational dependencies and the prac-tice of control reduce opportunistic behaviour.

• An increase of technological interdependencies allows the im-mediate assertion of product and process innovations.

• Risks in quality can be reduced by mutual information. • Inter-organisational learning is accelerated. • Trust-building measures result in the establishment of a clan-

like inter-organisational culture in which opportunistic behav-iour results in an imminent exclusion from the clan.

Whether a network or a cluster is a priori predominant in relation to other forms of transaction cannot be specified completely and ex-ante based on transaction cost economics. This is reduced to the op-portunistic behaviour of the cooperation partners which require con-tractual arrangements whose costs do not emerge until the comple-tion or in the course of the network relationships (ex-post). It is also possible that contacts are aborted completely, so that the expenses for setting up the relationships become "sunk costs".

Cluster Policy of the European Union

In recent years, a large number of policy initiatives were launched and implemented in Europe aiming at fostering existing clusters or creating favourable conditions for forming new ones (see also Chap-ter IV). According to the INNO-Policy TrendChart in cooperation with the ERAWATCH tool, more than 130 specific national meas-ures supporting clusters were identified in 31 European countries (October 2008). Almost all EU Member States have developed clus-ter-specific measures or cluster programmes at a national or regional level, suggesting that they are a key element of national and regional strategies supporting innovation.

As this booklet contains a separate chapter (IV) on the presentation and description of cluster policies at the level of the EU countries, this sub-chapter will present the relevant policy initiatives and in-struments developed at the Community level to complement national and regional efforts in this policy field.

Recognising that sustainable growth and job creation in the EU in-creasingly depend on excellence and innovation as the main drivers of European competitiveness, in 2006 the EU adopted a broad-based innovation strategy1 and identified strengthening clusters in Europe as one of the nine strategic priorities for successfully promoting in-

1See Commission Communication "Putting knowledge into practice: A broad-

based innovation strategy for th EU" COM (2006)

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novation2. Two years later, in January 2008, the launch of the Euro-pean Cluster Memorandum marked another important step towards further encouraging cluster development. The memorandum points out that the European Commission in association with the Member States should prepare a framework concept outlining the strategy for supporting the emergence and growth of world-class clusters in Europe. In March 2008, the EU heads of state or government under-lined the need to better coordinate the framework conditions for in-novation “including through improved science-industry linkages and world-class innovation clusters and the development of regional clusters and networks”3. In October 2008, the Commission's Com-munication entitled "Towards world-class clusters in the European Union: Implementing the broad-based innovation strategy " outlined a policy framework for action which aims to raise the level of excel-lence and openness of clusters. Besides efforts to improve the framework conditions, this includes4:

• establishing a high-level European Cluster Policy Group to ex-plore ways to best assist EU countries in supporting clusters

• expanding the policy dialogue under the European Cluster Alli-ance(under PRO INNO Europe®)

• fostering transnational cooperation between cluster organisations at a practical level in view of developing and testing new or better innovation support tools for cluster firms (European Innovation Platform for Clusters (Cluster-IP) under Europe INNOVA)

2Prior to 2006, the key role of the European Commission already emerged in the field of supporting cluster development across Europe by providing better data on clusters (e.g. several studies around 2003-2005 on the accession of EU-10 coun-tries and the mapping of clusters in eastern Europe), convening joint public private research groups for clusters to look at Europe-wide issues, and supporting regional cluster initiatives. 3Presidency Conclusions of the Brussels European Council (13-14 March 2008) 4 See Europe INNOVA (hhtp://www.europe-innova.eu)

• promoting the excellence of cluster organisations (European Cluster Excellence Initiative under PRO INNO Europe®) and

• further developing the European Cluster Observatory(under Europe INNOVA) into a fully fledged information service about clusters for enterprises and thereby improving the integration of innovative SMEs into clusters.

These initiatives work closely together with other EU initiatives ac-tive in this field, in particular the Regions of Knowledge initiative under the 7th Research Framework Programme and cluster projects implemented under the European Territorial Cooperation Objective of Cohesion Policy, such as under INTERREG IV / Regions for Economic Change and the European Union Strategy for the Baltic Sea Region.

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http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2008:0652:REV1:en:PDF

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2008:0652:REV1:en:PDF

http://www.proinno-europe.eu/index.cfm?fuseaction=page.display&topicID=395&parentID=395

http://www.proinno-europe.eu/index.cfm?fuseaction=page.display&topicID=395&parentID=395

http://www.clusterobservatory.eu/


High Level European Cluster Policy Group The European Cluster Policy Group (ECPG) was established in Oc-tober 2008 with the mandate to advise the Commission and Member States on how to provide better support for the development of more world-class clusters in the EU. The objectives of the European Clus-ter Policy Group are as follows (see PRO INNO Europe):

• to make recommendations on how to design better cluster policies in the Community

• to assess international trends in cluster development • to identify future challenges for cluster policies in response to

globalisation • to explore tools to dismantle existing barriers to transnational

cluster cooperation and • to analyse complementarities between the main Community level

policies and the financial instruments that support clusters. The Group is expected to deliver practical and concrete policy rec-ommendations in its mid-term and final reports. From April 2009 – September 2010 the Group will meet four times and will conduct two study trips to explore how countries outside the EU support the development of world-class clusters. The themes of the four meet-ings include: international cluster cooperation, the role of clusters in creating new industries (in the field of services), effectiveness of cluster policies, initiatives and cluster organisations, and synergies between community instruments in support of clusters.

European Cluster Alliance

The European Cluster Alliance is an open platform created under the PRO INNO Europe initiative that brings together over 50 European partners such as ministries, regional authorities and innovation agen-cies responsible for developing and implementing clusters in their territories. The involved partners have agreed to work together in

developing new tools and instruments in support of clusters and to test joint actions. The European Cluster Memorandum which identi-fied fields of common interest and articulated the interest in working together towards a common agenda was elaborated by the European Cluster Alliance.

European Innovation Platforms for Clusters (Cluster-IP)

The Cluster-IP is a European initiative funded under Europe INNOVA with the aim to accelerate the take-up of innovation and growth of cluster firms in Europe, especially small and medium- sized enterprises (SMEs). The initiative focuses on the development and testing of new or better innovation support targeted at cluster firms. The Cluster-IP brings together cluster organisationsfrom dif-ferent countries willing to cooperate in modernising cluster support services in the EU. This includes designing and testing new support tools, but also experimentating with new forms of cluster coopera-tion. The Cluster-IP will contribute to providing better support for innovative SMEs in internationalising and accessing excellence available elsewhere. The specific needs of cluster firms as well as the potential role of clusters in addressing societal challenges and in fostering user-driven innovation need to be taken into account. Co-operating with other initiatives and gaining new partnersas associ-ates is a central aim of Cluster-IP in its efforts to become a truely European platform for the specific cluster sectors.

European Cluster Excellence Initiative

The European Commission launched a number of cluster-related projects and initiatives aimed to improve both cluster policy within Europe and the efficiency of existing efforts in cluster management. Started in September 2009, Cluster-Excellence.eu – the European Cluster Excellence Initiative – constitutes a central pillar within this approach. Cluster-Excellence.eugathers together the most experi-enced persons and organisations in Europe in order to identify and compile a meaningful set of quality indicators and peerassessment

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procedures for cluster management. The intention is to develop training materials and establish a procedure for quality labelling of cluster management, in order to help cluster managers achieve high levels of excellence in their duties and to succeed in the peerassess-ments. The objectives of Cluster-Excellence.eu are: • to develop and test the acceptance of a quality management ap-

proach for cluster management based onmutual understanding of quality indicators, and friendly peerassessments

• to develop support materials to train cluster managers and help them achieve excellence in the quality indicators selected and de-fined in the project

• to offer a self-explanatory,case-supported teaching methodology • to raise the recognition of cluster management as an attractive

profession • to disseminate the peer-review procedure for the quality label

among cluster managers and • to promote the availability of training schemes for cluster manag-

ers.

European Cluster Observatory

The European Cluster Observatory provides a wide variety of data on clusters in Europe. Based on 38 cluster categories in 259 NUTS 2 regions, clusters are mapped and visualised. Cluster organisations have been incorporated as well: this section maps and lists regional and local private-public partnerships focused on cluster improve-ments. The section on cluster policies reports on national and re-gional cluster policies and programmes while the cluster library in-cludes cluster cases and other cluster-related documents. The Euro-pean Cluster Observatory is managed by the Centre for Strategy and Competitiveness (CSC) at the Stockholm School of Economics, and is financed by the European Commission, DG Enterprise and Indus-try, under the Europe INNOVA initiative.

In addition to the cluster-related activities under PRO INNO Europe and Europe INNOVA, European level policy within the context of Cohesion Policy (ERDF and ESF) with its strong focus on RTDI, support to entrepreneurship and innovation) deserves to be men-tioned. Structural funds can be used to improve educational and training schemes applied in the regions (ESF), to stimulate research demand within clusters, and to strengthen the links between research and private cluster firms (ERDF). Structural funds can also be used to strengthen the entire cluster infrastructure (e.g. upgrade research infrastructure, cluster support services, development of incubators, funding of cluster-related R&D (joint) projects).

The 2006 State Aid Framework for state aid in research, develop-ment and innovation can support cluster development in Europe, in-cluding cluster investment aid and aid for cluster promotion. This may include granting funds for facilities to set up or expand an inno-vation cluster (e.g. training, research infrastructure and testing) or granting funds to operate an innovation cluster.

Transnational cooperation between clusters can – in addition to PRO INNO Europe and Europe INNOVA - also be supported via the “Regions of Knowledge” initiative, as part of the 7th Framework Programme on Research and Development. This particular initiative aims to strengthen the research potential and competitiveness of EU regions, by encouraging and supporting the development and trans-national networking of regional research-driven clusters. Policy learning platformsis another example of Community support for transnational cluster policy cooperation, particularly within the frame of the Regional Innovation Strategies (RIS) scheme or the In-novative Actions Programme 2000-2006 co-financed by the ERDF. In support of mutual policy learning, pilot projects and networking activities were further launched under the PAXIS initiativewhich aim at identifying “good practice” examples and developing tool boxes to establish cluster initiatives.

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Within the Cohesion Policy initiative “Regions for Economic Change”, interregional cooperation forms another cluster-relevant objective. Cluster-relevant themes included in this initiative focus on “bringing innovation quickly to the market”, “improving the capac-ity for research and innovation”, “improving monitoring of envi-ronment and security by and for the regions”, “improving knowledge and innovation for growth” and “improving the capacity of regions for research and innovation”. As a pilot project of the Regions for Economic Change initiative, the “Clusters Linked Over Europe” (CLOE) project brought together 18 partner organisations from 14 regions to cooperate in the development and managing of cluster ini-tiatives.

Further cluster-related activities launched by the Commission are the CLUNET project (joint pilot projects regarding cluster innovation and development projects); the INNET project (development of joint policy actions to support transnational cooperation between innova-tive SMEs involved in clusters); the European Technology Platforms (ETPs) which bring together industry, research, finance, regulators and representatives from Member State ministries in a specific tech-nology or industry sector; and the support of inter-cluster processes within the “European Territorial Cooperation” Objective for the 2007-2013 period (with the aim of supporting an integrated territo-rial development, interregional co-operation and exchange of good practice).

In summary, the most popular instruments used by the European Commission to support clusters are to facilitate networking, presen-tation and dissemination of information and good practice examples, as well as support for concrete R&D and joint innovation – particu-larly within the cohesion policy process. Using these instruments, the Commission pursues the objective of shaping a European Inno-vation Space which complements Community efforts to build a European Research Area.

II Approachesto Measure Clustering General Considerations

Generally, measuring clusters is not a task that can be easily carried out. The underlying problem is that unlike measuring agglomera-tions delimited by industries, it is not clear ex-ante what constitutes a cluster. Referring to one of Porter’s early definitions, a cluster con-sists of “related industries”. When speaking of “related industries” this relation is typically thought of as referring to value chains. Clus-ters are therefore by definition cross-sectoral and cross-technological in nature.However, there is no data available on value chains on a regional basis or in a regionalisable format

Consequently, as information on regional value chains is difficult to obtain in practice by other means than direct inquiry, clusters are difficult to capture. Even within the same type of cluster, depending on the exact nature of the end product, suppliers will be attributable to quite different sectoral classes. Truck producers need parts from different suppliers than rail manufacturers, even though both may be considered part of a transport cluster. Moreover, most sectoral classes are too broad to focus on what constitutes a cluster.

As a result, when working with secondary data, clusters can only be defined approximately. Even though it cannot be claimed with abso-lute certainty for each and every single case, there is comprehensive evidence-based knowledge about sectoral fields (classifiable as 3- to 4-digit NACE classes) or technological areas (classifiable by IPC classes) that can be considered related to and thus delimiting a cer-tain type of cluster. Based on such an ex-ante definition, an analysis can be conducted for cross-sectoral and cross-technological clusters.

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A Typology of Clusters

In this booklet two different approaches to cluster identification will be focussed on.

Firstly, clusters will be identified on the basis of employment data, i.e. as clusters of economic activity in a certain sectorally defined field, irrespective of their innovative potential.

Secondly, clusters will be identified based on patent data, i.e. as clusters of inventive activity in a certain technologically defined field, irrespective of the underlying scope of economic activity.

The combination of these two approaches provides the basis for a differentiated analysis of both economic and technological clustering as well as their interdependencies in Europe.

For the first part of this analysis, a cluster field definition had al-ready been developed by the European Cluster Observatory, which was adopted directly as a basis for the analysis in this bookletto en-sure consistency.

For the second part of the analysis a cluster field definition did not yet exist and this was developed specifically for the analysis in this booklet. It is based on prior definitions used by Fraunhofer ISI to assess e.g. the international technological competitiveness of nations but has been significantly adapted for the purposes of this study.

Methodology

Based on its definition in the literature, a cluster cannot simply be conceptualised as a regional agglomeration of certain industries, but is often described as uniting the dual characteristics of a substantial absolute size as well as of a substantial relative importance for the region it is located in.

In this booklet, therefore, the existence of regional clusters will be illustrated by measures based the total scope of activity as well as on

the regional degree of specialisation in the field in question. In this, we will follow the methodology of the European Cluster Observa-tory that aims to reflect whether the cluster has reached ‘specialised critical mass’as described below.

Methodology of the European Cluster Observatory

The methodology of the Cluster Observatory is based on the premise that the amount and quality of knowledge circulating and spilling over within a cluster depends upon its size as well as the degree to which the region is geared towards and focused upon production in the relevant industries. To avoid over-representing weak regions which display a high specialisation based on the fact that their mod-est industrial activities are often conducted in one field, the second aspect is measured by means of two distinct indicators.

The European Cluster Observatory shows the extent to which clus-ters have achieved ‘specialised critical mass’ by assigning each clus-ter 0, 1, 2 or 3 ‘stars’ depending on how many of the criteria ex-plained below are met.

Firstly, Absolute Size: if the level of employment or patentapplica-tions reaches a sufficient share of the European total, it is more likely that meaningful economic effects of clusters will be present. The 'size' measure shows whether a cluster is in the top 10% of all clusters in the same category in Europe in terms of the number of employees/patent applications. Those in the top 10% are assigned a ‘star’.

Secondly, Specialisation: if a region is more specialised in a specific field than the overall economy across all regions, this possibly indi-cates that the regional cluster plays an above average role in the re-gional value chains so that spill-overs and linkages will be stronger. The ‘specialisation’ measure compares the proportion of employ-ment/patent applications in a cluster category in a region to the total employment/patent applications in the same region, to the proportion

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of total European employment/patent applications in that cluster category over total European employment/patent applications. If a specialisation quotient of ‘2’ or more results for a cluster fieldin a given region, that region is assigned a ‘star’.

Thirdly, Focus: if a cluster accounts for a larger share of a region's overall employment, it is more likely that spill-over effects and link-ages will actually occur, instead of being drowned in the economic interaction of other parts of the regional economy. It thus adds in-formation to the specialisation measure, as a specialisation quotient may be high simply because the share of the cluster field is very low on average. The 'focus' measure shows the extent to which the re-gional economy is focused upon the industries making up the cluster category. This measure relates employment/patent applications in the cluster to total employment/patent applications in the region. The top 10% of regions in which the respective cluster accounts for the largest proportion of total employment/patent applicationsare as-signed a ‘star’.

If the number of employees in a cluster amounts to less than 1,000 persons, the cluster is not assigned any stars to prevent the appear-ance of very small, insignificant clusters.

Likewise, to avoid the over-interpretation of arbitrary results, no cluster star is assigned, irrespective of specialisation and focus, when there are less than 10 patent applications per year in a region.

Moreover, if there are less than 75 patent applications per year in a region, the assigned stars are marked 'unreliable'.

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III Evidence of Clustering In the following chapter, evidence of clusters will be investigated in a number of technological fields.

• Aerospace • Automotive • Information technologies (IT): computer hardware, com-

puter software, IT services, Internet providers and IT-enabled services.

• Communication technologies: fixed line telecommunica-tion, mobile telecommunication, production of telecommuni-cation equipment.

• Medical technologies: production and development of medical equipment at the intersection of diagnostics and life support as well as therapeutic equipment and monitoring de-vices.

• Biopharmaceuticals • Chemical technologies • Instruments

Evidently, these fields differ with regard to the scope of activities that can be subsumed under their heading. While the term “automo-tive technology” can relate to quite different activities in a diverse industrial sector, the field of “aerospace technology”,for example, can be much more precisely defined.

Throughout the following section, it is therefore important to bear in mind that the presence of a regional cluster (particularly: a regional specialisation) in a certain field will have different implications for the regional economy – depending on the average extent of activities in this field.

While the presence of a strong cluster in chemical industries will in most cases imply that this industry is also the dominant industry in the region, this may not be the case for other technological fields.

For example, even in the region with the highest relative importance of medical technologies in Europe, the total extent of employment and patenting in chemical technologies may well be higher.

As an indication of the average extent of activities by technological field, Table 1 presents the mean values of employment and overall patent applications for the 20 clusters with the highest values for employment and patent applications respectively. Table 1: Employment and Patent Applications in Selected Fields

Average employment

in top20 clusters

Average no. of patent applications

in top20 clusters

Average relation of

employment to patent

applications Aerospace technologies

10,777 135.4 about 80:1

Automotive technologies

52,251 1,135.7 about 45:1

Information technologies

39,714 1,229.7 about 30:1

Biopharmaceuticals

18,010 1,205.8 about 15:1

Medical technologies

8,317 692.3 about 12:1

Instruments/Measurement technologies

11,253 1,230.9 about 9:1

Communication technologies

14,623 1,748.1 about 8:1

Chemical technologies

17,852 3,623.1 about 5:1

Note: unweighted Averages

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Source: own Compilation of data from the European Cluster Observatory and the EPO Worldwide Patent Statistical Database

In addition to the overall different scope of the fields, Table 1 high-lights that in certain fields, such as aerospace technologies, the num-ber of patent applications is much lower in relation to the number of employees than in other fields, such as the chemical industry.

The reasons for this differ from different technological intensities to different propensities to patent, despite an otherwise quite similar technological intensity.

These differing relations are another fact to be borne in mind when juxtaposing ‘technological clusters’ and ‘employment clusters’.

In addition to the field-specific statistical analysis, this section will present a number of brief case studies that illustrate the concrete character of clusters in the respective fields. In particular, these case studies will illustrate the structures within the cluster – i.e. the com-position of the local field of actors – as well as the political response that has been developed to support this particular cluster.

The case studies were selected on the basis of the empirical analysis performed (focusing and strong, combined clusters), but modified to ensure a broader coverage of EU Member States.

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Aerospace

More than in other sectors, the field of aerospace is characterised by the activities of large corporations in both aviation and space. Con-sequently, the main locations of multinational firms such as EADS (e.g. Airbus, Eurocopter, Astrium Space) play a dominant explana-tory role for the spatial pattern of activities in the field.

As expected, the clustering pattern of the aerospace industries in the European Union is characterised by the location of large airplane manufacturers such as Saab in Sweden or Airbus at its various cen-tral European locations. Additionally, the pattern is complemented by various defence-oriented regions such as the Bristol/Bath area in the UK or Upper Bavaria in Germany.

When comparing the patterns of employment clusters and those of patenting clusters, the key finding is that the latter are more concen-trated, likely due to the attribution to the key companies’ headquar-ters in e.g. Hamburg, Toulouse or Trollhättan. Also, there is simi-larly evidence of both ‘employment clustering only’ areas, such as in Northern Ireland, Lorraine, as well as in parts of Italy and Poland, and ‘technology clustering only’ areas, such as Germany’s Ber-lin/Brandenburg area and Sweden’s Västsverige5.

The case of the Berlin/Brandenburg area illustrates that a highly technology-oriented field such as aerospace (DLR) may concentrate research efforts, yet not necessarily employment.

While regionally quite concentrated within the individual countries, aerospace-related activities are comparatively evenly distributed across the western European countries. In eastern Europe, in con-trast, they are nearly absent (with the exception of three small clus-ters in Bucharest, the Czech Republic and Eastern Poland). 5 The large patent cluster stretching across three regions in northern Germany is

very likely an artefact based on inventors commuting to the Airbus plant in Hamburg.

Figure 1: Clusters in Aerospace

Outstanding Aerospace Clusters (Examples)

Employment Emp. Spec. Patent Appl. Pat. Spec. DE60 - Hamburg 19,411 13.25 27 7.53 FR62 - Midi-Pyrénées 18,656 12.13 74 23.97 FR82 – Prov.-Alpes – Côte d'Azur 7,659 2.88 12 2.74

Note: based on Cluster Observatory Data; the majority of data points are from 2005; (figures may differ from claims of cluster management organisations); as well as on own calculations drawing on the EPO Worldwide Patent Statistical Database categories calculated by the difference of the number of patent and the number of employment “stars”; scaffold-ing indicates overall cluster strength, with no scaffolding as the strongest category. Source: Regional Key Figures

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Case Study I: Aviation Cluster of the Hamburg Metropolitan Region

The Hamburg metropolitan region is a key aviation cluster in Europe. More than 36,000 staff are employed at one of the three ma-jor aviation companies Airbus Deutschland (>10,000), Lufthansa Technik AG (>7,000) and Hamburg Airport (>14,000). A distinc-tivefeature of the cluster is that it comprises activities along the en-tire value chain in aircraft construction, maintenance and airport op-eration. Fields of expertise include aircraft and aircraft systems, cabin and cabin systems, air transport systems, and aviation services.

Building on earlier efforts in the field of joint qualification, the Aviation Cluster project of the Hamburg metropolitan region was established in 2001 as a private public partnership. Today, the organ-isational framework of the Aviation Cluster is provided by a cluster management body, the ‘Hanse-Aerospace e.V.’. At the highest level, the cluster is represented by a ‘regional aerospace co-ordinator’, the current regional minister of finance and long-term serving member of the regional government. Additionally, since 2006, the cluster has two public ‘ambassadors’, with a background as high-ranking board members of e.g Deutsche Lufthansa and DLR.

Today, ‘Hanse-Aerospace e.V.’ is Germany’s largest association of SMEs in the aviation and space industry with more than 150 mem-bers.Its member companies represent a wide spectrum, from devel-opment and maintenance companies to aerospace-oriented service companies. About 15% of all employees in the German aviation and space industries work for Hanse-Aerospace member companies.

The cross-agency cluster programme integrates Hamburg's aviation companies, associations, institutions, administration and academic institutes. Under a collective roof the Aviation Cluster members, in-ter alia DGLR, VDI, the Hamburg Employment Agency, the trade union IG Metall, section coast, the Hamburg Chamber of Com-merce, the employers' association NORDMETALL and the City of Hamburg, closely cooperate and conduct various joint activities.

Since the foundation of ‘Hanse-Aerospace e.V.’,overall employment in the cluster has increased by around 8,000 and 30 new companies were motivated to locate to the region. These positive developments weremostly achieved in the field of suppliers and thus of benefit to the small to medium-sized enterprise sector, where more than 3,000 new jobs were created.

In 2004 the Aerospace Cluster was selected as a strategicfield of ac-tivity by the regional government and supported with a financial volume of around € 23.5 m spread over five years. In addition, com-plementary funding from private sources was also forthcoming. Af-ter winning the federal government’s cross-sectoral competition of industry clusters in 2008, the Aviation Cluster will be provided with long-term support, i.e. federal funds of € 40 m over the next five years. Again, those have to be co-financed by the industry. Its new, integrated cluster strategy “A New Kind of Aviation” aims to reach a new level of efficiency, comfort, environmental friendliness, reli-ability, and flexibility. It includes the three civil aviation projects “Cabin Technology and Innovative Fuel Cell Applications”, “Ex-tended Maintenance, Repair and Overhaul for New Aircraft Genera-tions” and “Efficient Airport 2030“.

In May 2009, Hamburg’s Aviation Cluster initiated and established the European Aerospace Cluster Partnership (EACP) as a network of European aerospace clusters, which is co-financed by the European Commission and headed by Hamburg’s Aviation Cluster. Addition-ally, the “Centre for Applied Aerospace Sciences” (ZAL) was estab-lished with more than € 13 m of regional public funds and nearly € 2 m of private funding in order to strengthen excellent, innovative and sustainable projects Sources: www.kompetenznetze.de/.../hamburg-vernetzt-europaische-luftfahrtcluster; www.hightech-strategie.de/_media/luftfahrtcluster.pdf; www.luftfahrtstandort-hamburg.de; www.hanse-aerospace.net/en/home.html; www.hecas-ev.de; www.eacp-aero.eu

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Case Study II: The Pôle Pégase Competitiveness Cluster

The Pôle Pégase Competitiveness Cluster is an aviation cluster in south-east France in the Provence-Alpes-Côte-d’Azur (PACA) re-gion in which the aeronautics sector is the major industrial branch.

Organised political support for the cluster was initiated by the crea-tion of the Association Pégase PACA in mid-2006.This association was set up by PACA’s major aviation and space companies (Euro-copter, Dassault, Thalès Alenia Space, CNIM, Snecma and Areva TA), some SMEs (Focus 21, Weirwalves & Controls, Studiel and Artères), a number of research and higher education institutions (Onera, Inria, Université Paul Cézanne Marseille and École Centrale Marseille), and a large union of employers (UIMM 13-04). In March 2007 the Association Pégase became a “Pôle Régional d’Innovation et de Développement Économique Solidaire (PRIDES)” in the re-gion. In July 2007 it was additionally labelled a national “Pôle de Compétitivité”.

Organised as an association, the Pôle Pégase Cluster project is SME-oriented and financed by the French state (50%), the regional gov-ernment (30%), the relevant cities (15%) and its members (5%).The cluster initiative has about 158 members, including 116 SMEs, 15‘grandes entreprises’, and 27 research and higher education cen-tres. In the 2008 national audit, the Pôle Pégase, as one of 39 or 55% of the national “Pôles de Compétitivité”, was assessed as having achieved the objectives of the programme.

The overall aim of the competitiveness initiative is to develop, pro-mote and provide infrastructure for the regional aerospace and avia-tion industry. In 2006, more than 11,500 jobs were directly linked to the Pôle Pégase member companies and a further 23,500 related to the aviation and space industry in the region, creating a turnover of € 5.5 bn. One of the main objectives of the Pôle Pégase Cluster was to create another 10,000 jobs and to generate an additional turnover of € 800 m by 2016.

While these ambitious targets have not yet been reached for the time being, the cluster already achieved substantial progress in increasing its direct membership base from around 15 in late 2006 to more than 150 in early 2010.

Some of Europe’s largest research and science centres are to be found within the PACA region and are thus available to the Pôle Pégase Cluster network. In 8 world-level test centres research can be conducted in the form of physical and numeric trials in the fields of protection, surveillance, communication and transportation.

Beyond the quantitative targets mentioned above, therefore, the clus-ter supports companies and research institutions in activating their potential for innovative space and aeronautics solutions in the PACA region and in identifying new fields of application for aerospace technologies. A specific focus of these support activities is directed to new systems such as mission aircraft, “aeropters”, i.e. wing-in-ground effect ferries, strato-spherical aircraft and all-weather heli-copters. Science and research activities are inter alia devoted to air-ships for heavy transportation, electrically powered Ultra Lights and the development and construction of light UAVs for observation.

Nationally, the Pôle Pégase Cluster has been collaborating with 2 other French aerospace clusters since 2007: the Aerospace Valley (Midi-Pyrénées-Aquitaine) and ASTech (Ile de France). Addition-ally, it co-operates with non-aerospace clusters in other industries such as Capénergies, Optitec and Arve Industries.

Internationally, the cluster is partners with the Hamburg Aviation Cluster (‘Hanse-Aerospace e.V.’) in the context of the European Aerospace Cluster Partnership (EACP) set up in 2009. Sources: www.med2europe.eu/fileadmin/documents/PDF/stratoflight.pdf www.invest-in-france.org/international/en/pegase-cluster.html www.pole-pegase.com www.eacp-aero.eu

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Automotive

As in aerospace, the automotive field is characterised by large manu-facturing corporations. It is, however, to a higher degree comple-mented by a value chain split among companies with medium-sized system suppliers and smaller specialised suppliers. Hence, the pat-terns of employment and patent clustering differ more strongly and are more evenly spread than in the aerospace field.

The employment pattern echoes the location of Europe’s largest car manufacturing companies such as Daimler, BMW, Volkswagen, Seat, Fiat, Renault or Volvo. It does, however, also show clustering in regions where a large number of suppliers are located (e.g. west-ern Lower Saxony). Moreover, these maps clearly illustrate the de-cline of the UK’s automobile industry.

The differences between the patterns of employment clustering and patent application clustering appear to reflect a certain division of labour. Remarkably, a high degree of employment clustering is pre-sent in the Czech Republic, while there is none with regard to patent applications. The same applies to locations in Poland, Hungary and Romania and to regions of France and Italy.

Interestingly, it cannot generally be stated that patent application clusters in the automotive sector are concentrated in a smaller num-ber of regions than employment clusters. While this is the case for some German manufacturers, this is not so in Sweden and Italy or in other places in Germany where, in fact, the opposite appears to be true. Within France, clusters of employment and clusters of patent application tend to be located in different, adjacent regions.

Mere technology-oriented clusters are rare in the automotive field, with some exceptions, e.g. in the case of Poitou-Charentes.

Overall, clusters in the automotive field are comparatively evenly spread across the European Union, even though the key sources of technology are unanimously located in western Europe.

Figure 2: Clusters in the Automotive Field

Outstanding Automotive Clusters (Examples)

Employment Emp. Spec. Patent Appl. Pat. Spec. DE11 - Stuttgart 136,353 6.61 444 2.72 DE91 - Braunschweig 79,997 10.72 52 2.57 SE23 - Västsverige 42,832 3.66 92 2.83


Case Study I: Automotive Cluster CENTROPE

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CENTROPE refers to the central European region centred around the border quadrangle of Slovakia, the Czech Republic, Hungary and Austria. It involves the Austrian provinces Vienna, Lower Austria and Burgenland, the Czech region South Moravia, the Slovak re-gions Bratislava and Trnava, the Hungarian counties of Győr-Moson-Sopron and Vas, as well as the cities of Bratislava, Brno, Eisenstadt, Győr, Sopron, St. Pölten, Szombathely and Trnava. Cross-border cooperation in the region was established in late 2003 in the context of an Interreg IIIA project.

The automotive industry plays a significant role for a dynamic eco-nomic development of the CENTROPE region. Ten automobile manu-facturing plants are located within a radius of 300 kilometres of Vi-enna, accounting for approximately 5% of vehicle production worldwide. Moreover, a considerable number of different kinds of suppliers as well as other associated businesses are to be found.

Currently, there are 22 different sectoral cluster organisations in CENTROPE. This case study will focus on the cooperation platform “Automotive Cluster CENTROPE” or “AC-CENTROPE”, which was set up as an umbrella organisation of the three cluster initiatives “Automotive Cluster Vienna Region” (ACVR) in Austria, the “Pan-non Automotive Cluster” (PANAC) in Hungary and the Automotive Cluster Western Slovakia in 2007.

The “Automotive Cluster Vienna Region” (ACVR) was set up in 2001 and resulted from a joint initiative of the Austrian federal states Vienna and Lower Austria. The ACVR is organised as a division of the VIENNA REGION Economy.Region.Development.GmbH, its hold-ing company ecoplus, the Economic Agency for Lower Austria and the Vienna Business Agency. ACVR’s overall objective is to con-centrate expertise in the region and to initiate innovative projects, in order to increase the competitiveness, the R&D intensity, and the extent of value creation in its member firms. Current support for the kick-off of projects is focused on “interior fittings”, including

telematics, electronics and security. Moreover, ACVR plays the leading role in the AC-CENTROPE cooperation platform.

The “Pannon Automotive Cluster” (PANAC) was set up independ-ently of ACVR, in 2000, with the active participation of Hungary’s largest automotive enterprises and the West Transdanubian Regional Development Council as well as the support of the Hungarian Minis-try of Economic Affairs.Its main objective is to provide the industry with a platform for integration of manufacturers and suppliers, giv-ing all partners, especially SMEs, a possibility to cooperate.

From 2004 to 2007. ACVR and PANAC joined in an INTERREG IIIa Project "Competence Network Automotive and Logistics", in which ACVR was the driving force. Up to today, ACVR in the AC-CENTROPEframework dates back to this project.

In contrast to the two other initiatives, the “Automotive Cluster Western Slovakia” was not set up independently, but as a result of the INTERREG IIIa project in 2007. Its main objective is to increase the competitiveness of Western Slovakian automotive suppliers and enable the creation of added value within the region.

Today, the ACVR network of cooperation partners comprises about 140 and the network PANAC around 70 members, whereas the “Automotive Cluster Western Slovakia” is still in a setting-up stage. In total, AC-CENTROPE has almost 300 members of which 70 % are SMEs and are 4 OEMs. The Universities of Vienna and Bratislava are jointly offering a professional MBA “Automotive Industry”.AC-CENTROPE takes part in different international projects like ERDC (European Research-driven Cluster) or “Automotive in CEE”. Sources: http://centrope.info/baernew/topics/Project_Multilateral www.wwff.gv.at/wwff.aspx_param_target_is_105042.v.aspx www.accentrope.com; www.acvr.at; personal mail contact with cluster manager; www.autocluster.hu, www.autoklaster.sk

Case Study II: The Automotive Cluster in West Sweden

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21

The province of Västra Götaland is the core automotive region of Sweden. The centre of this main Swedish automotive cluster is the Göteborg-Trollhättan/Uddevalla-Skövde triangle whilethe wider cluster extends to the greater Göteborg region and the municipalities of Fyrbodal, Skaraborg and Sjuhärad. Currently, the automotive in-dustry in Västra Götaland employs a workforce of around 60,000 along the production chain. Every third job position in the cluster region depends on the automotive industry. The number of employ-ees, however, has been decreasing in recent years.

In detail, the region of Västra Götaland is home to four of Sweden’s five vehicle OEMs. AB Volvo (trucks, buses, construction equip-ment, marine engines and aircraft engine components), Volvo Car Corporation (passenger cars), Saab Automobile AB (passenger cars) and Pininfarina Sverige AB (niche vehicles).Moreover, numerous different suppliers whose operations are closely linked to the manu-facturers are tied to and spread out all over the cluster region. Among them are Autoliv, a well-known leader in vehicle safety (in-ter alia seat belts and airbags), as well as well-known global enter-prises such as SKF, Haldex, SSAB and important subsidiaries of e.g. Valeo, Johnson Controls and Visteon. Finally, the region is home to several R&D centres closely linked to the automotive industry. In these centres of excellence, resources of industry, academia and the public sector are combined in order to work on joint projects and to conduct extensive research in areas such as e.g. hybrid vehi-cles.Swedish manufacturers are thus often in the unique position of controlling the entire value chain. Within the confines of the cluster region, vehicles can be and are developed from first concept to pro-totype to finished car.

Support for the regional cluster is based on two main associations that provide a platform for innovation, integration and cooperation with the support of the local authorities.

In 2002, the regional and municipal authorities in Västra Götalandset up “Automotive Sweden” as anindependent non-profit, governmental organisation.It aims to strengthen West Sweden’s position as a com-petitive automotive region by spreading information about the re-gion’s competences by attracting foreign direct investments. More-over, it engages in local dialogue and encourages networking to stimulate growth in the industry. For example, it regularly arranges seminars and stimulates cooperation within the industry. While it has no defined group of members, itdistributes its magazine to about 1,000 subscribers four times per year and sendsan electronic news-letter to about 4,000 subscribers every month.

“Fordons Komponentgruppen” (FKG) is the nationalSwedish indus-try association for suppliers that represents them publicly and pro-vides a platform for communication and integration.FKG was estab-lished around 20 years ago, has about 300 members and works to-gether with the suppliers in Sweden, Norway and Finland. Due to the high regional concentration of activities, the association is very active in Västra Götaland.

In addition to these networking-oriented efforts, Sweden’s most modern production engineering centre “Innovatum Science Park” in Trollhättan and the dynamic development centre “Lindholmen Sci-ence Park” in Göteborg are just two examples of close cooperation and integration between science and industry with the aim to im-prove technology, quality, efficiency and competitiveness.

“Automotive Sweden” is supported by the European Union through the European Regional Development Fund.

Sources: www.tanumshede.se/download/.../Kommunstyrelsen+2005-01-19.docwww.fyrbodal.se/download/9649/automotiveswedenutvardering.pdf www.automotivesweden.se/sidor/about. ... .html www.fkg.se/index.asp?langid=uk


Information Technologies (IT)

The pattern of the cluster in the field of information technology (IT) is influenced by the presence of large enterprises from the software and hardware industry alike. Examples are SAP, which contributes to the rise of the employment cluster in the region of Karlsruhe or the enterprises from the semiconductor industry of "Silicon Saxony" around Dresden or the concentration of the videogames sector in the region of Paris.

Technology clusters outnumber the employment clusters in the IT sector. Nevertheless, both types of clusters span across Europe,although a concentration can be observed in the regions of central Europe, the Nordic countries, the UK and Ireland.

The globalisation of IT-enabled services - including off-shoring ser-vices - at the beginning of this century influenced the pattern ob-servable for the employment clusters. Especially Ireland, Spain and Denmark are examples of a rapid increase in the IT-related business services and computer and information services since the beginning of the decade, giving birth to the employment clusters.

Patent application clusters are found in a larger number of regions than employment clusters, especially in such regions that reveal the ability of combining hard- and software elements. A highly qualified work-force and the competence to work at this intersection charac-terises these regions. Technology clusters are the dominant pattern in Finland, where the IT industry has been the pillar of the national economy for many years.

In conclusion: clusters of the IT sector are widely distributed across Europe. The globalisation of IT services has contributed to the rise of employment clusters in more peripheral regions. However, core competences of patenting are still concentrated in classical European regions of the IT sector.

Figure 3: Clusters in the Information Technology (IT) Field

Outstanding Clusters in Information Technology (Examples)

Employment Emp. Spec. Patent Appl. Pat. Spec.

DE23 - Oberpfalz 15,081 3.83 70 2.41 DE21 - Oberbayern 45,026 2.55 237 1.39 FR52 - Bretagne 7,498 0.77 59 2.25


Case Study I: Region Provence Alpes Cote d’Azur, the SCS Cluster

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The region Provence-Alpes-Côte-d'Azur (PACA) located in the south-east of France hosts a 3 star technology cluster in the field of IT. The region is responsible for 40 per cent of the manufacturing of microelectronics in France. The region is widely known for its tech-nological competences. The most important sectors of the region are aerospace, computer sciences and communication technologies, chemistry, petroleum and pharmaceutical industries, biotechnologies and weaponry.

The region hosts 41,000 employees in ICT, whereby the cluster or-ganises 25 international groups with 13,000 employees of which 6,500 work in R&D. The region has 14 higher education institutes andis training 1,500 engineers and doctors per year. Additionally, 1,200 researchers work in public research. Since the support from the pôle de compétitivitépolicy, public and private investments have risen sharply from € 200 m in 2005 to over € 400 m in 2009. More than 200 projects have been certified by the SCS centre since 2006, involving more than 200 partners and representing € 510 m expendi-ture on R&D.

In July 2005, the Solutions Communicantes Sécurisées (SCS) cluster initiative was set up in the PACA region and subsequently recog-nised by the pôle de compétitivitépolicy of the French national gov-ernment as one of the clusters with high international relevance in France.The cluster organisation includes actors from microelectron-ics, the software industry, multimedia communications and ICT ser-vices of the region and is located directly at Sophia Antipolis. The organisational structure of the cluster is that of an association. The cluster has a governing board and a cluster management organisation with different responsibilities. Its members have the opportunity to join thematic groups concerned with mobility, traceability, identity or connectivity.

The SCS cluster initiative is based on a dynamic network between SMEs, large companies, academia, research labs and associations in

order to stimulate partnerships and foster the emergence of innova-tive projects. Among the members are academic institutions and a mix of SMEs and large enterprises. Approximately 70% of 200 SCS industrial actors are SMEs. The number of cluster members has in-creased continuously from its founding date until today. The aim of the cluster is to enlarge the ICT sector in the region from 41,000 employees in 2006 to more than 65,000 employees ten years later. This development is reflected to a certain degree in the development of the number of projects which are labelled cluster projects. This number has increased from 31 in 2006 to 65 in 2009. Along with the number of projects, the total financial volume per anno has in-creased. The projects range from advertising on the mobile phone over mobile phones as a means of payment to secure applications for mobile phones and RFID technology and health.

The cluster maintains international partnerships and close relation-ships to the clusters of Torino Wireless in Italy, the El Ghazala, Spax and Sousse clusters in Tunisia, the traceability cluster in Valencia and the MATIMOP cluster in Israel.

Another achievement is the foundation of the "PACA Labs", a col-laborative project of the cluster, the "Fondation Internet Nouvelle Génération (FING)" and DEIXIS of TELECOM ParisTech (ENST). It is the objective of the PACA Labs to foster "in vivo" experimenta-tion of technologies and innovative services of the sectors. This holds especially for regional SMEs of the ICT sector, communities within the regions and public research and education institutions. It provides an environment for anticipating new technologies in ICT and testing new usages and practices. Sources: http://www.pole-scs.org/ http://www.competitivite.gouv.fr/spip.php?article163 Case Study II: I-Region Karlsruhe

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The region of Karlsruhe is located in the federal state of Baden-Wuerttemberg in the south-west of Germany, a highly prosperous German state. In the field of IT, it is characterised by a 3 star em-ployment cluster and a 1 star technology cluster.

Research and development in the field of information technologies have a very long and outstanding tradition in Karlsruhe. In 1957 Pro-fessor Karl Steinbuch from the University of Karlsruhe formed the notion of "informatics", followed by the foundation of the Institute for Information Processing Technology in 1958 and introduced computer sciences as a discipline at the university.Today both firms and universities from the IT region of Karlsruhe play a leading role in the development of new applications, new and creative business models and the development of new services for the whole IT sector.

According to the Cluster Observatory, the IT cluster in and around Karlsruhe is the third largest IT employment cluster in Europe with approximately 36,000 employees in the field. In addition, research institutes from the Karlsruhe region are internationally leading in their respective fields. The Karlsruhe region has more than 3,500 IT enterprises of different sizes, many of which have earned a high in-ternational reputation. Additionally, the Karlsruhe region hosts a large university campus for students of computer science and is home to many Internet enterprises and firms of the net economy.

Moreover, the region of Karlsruhe is surrounded by further large en-terprises from the IT sector, such as SAP, HP or IMB within a radius of less than 100 kilometers from Karlsruhe which regularly display a substantial interest in cooperation.

A driving force behind the development of the IT sector is the so-called Cyber Form, a high-tech enterprise network of the IT sector with more than 780 members. The Cyber Forum was founded in 1997 as a public-private artnership and runs a large network of en-terprises, universities and research institutes from the region with the goal of promoting the economic growth and innovativeness of the

sector. Transfer of know-how, support during the start-up phase of an enterprise and support of innovative business ideas are among the core competences of this initiative.

The project I-Region Karlsruhe was initiated by the Cyber Forum in order to participate in the leading-edge cluster competition of the German government in 2008. It had the goal to promote regional growth through the development of new and creative IT business models and services for the net economy, together with the promo-tion of a net society. Moreover, it pursued the goals of raising public awareness in Germany as well as across national borders and to es-tablish Karlsruhe as a competence centre for IT in the public percep-tion. By attracting further enterprises from the IT sector to this re-gion, 15,000 additional jobs should be created. The I-Region Karlsruhe cluster initiative was designed to draw on existing strengths and competences in order to enhance regional development and economic growth.

Although in the end the I-Region Karlsruhe did not win the leading-edge cluster competition the competences, networks and contacts which were established during the proposal writing phase were used to develop the regional concept of the I-Region further and a second project proposal with the name "Smart Region" should promote the ideas. In the I-Region Karlsruhe case, a political initiative contrib-uted to generating ideas on how to develop the sector further and at the same time increase the visibility of the technological expertise of the regional firms. Currently, the I-Region Karlsruhe is trying to en-hance their contacts with the IT region in and around Darmstadt and develop mutual cooperations. Sources: http://www.iregion.de/ http://www.cyberforum.de/

Communication Technologies

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The communication technology market can be roughly divided into fixed line telecommunications and mobile telecommunication, with a trend towards the expansion into network-related IT services and telecommunication services. The clusters in this field are widely dis-tributed over Europe. This can be partly explained by the fact that almost every European country has at least one large fixed line communication company (BT, France Telecom, Telefonica, Deutsche Telekom AG, TeliaSonera, Telecom Italia, TDC, Telekom Austria, Belgacom, Telekomunikacja Polska etc).

Technology clusters are found in many European regions. A concen-tration of competences, especially in technological clustering, is found in the Nordic countries (Finland, Sweden and Denmark) to-gether with the south of the UK, Germany and France. In these countries many large European enterprises of the telecommunica-tions sector are present and invest large sums in R&D.

Employment clusters are dominantly found in south and east Euro-pean regions and Ireland. In central Europe they are often found in combination with technological competences. Many production sites of telecommunication equipment companies have been moved from central Europe to other European regions, where employment costs are lower and thus contributed to a rise in employment in this sector.

To conclude: clusters in the field of communication technology are spread across the whole of Europe. Fixed line communications have a very long tradition in most European countries and with the rise of mobile communication technologies counties in east European coun-tries have undergone a catching-up process. Whereas technology clusters dominate the picture in northern and central Europe, em-ployment clusters are dominantly found in eastern and northern Europe.

Figure 4: Clusters in the Field of Communication Technology

Outstanding Clusters in Communication Technology (Examples)


FI1A - Pohjois-Suomi 7,725 7.40 68 6.86 FI18 - Etelä-Suomi 18,465 3.59 299 4.29 SE11 - Stockholm 11,455 2.73 189 3.55


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Case Study I: ICT Cluster Brittany

Besides Paris, Brittany is one of France’s main centres for informa-tion and communication technologies. The regional sector provides more than 50,000 jobs, 15,000 of them in R&D alone. The develop-ment of ICT activities has been strongest around three core cities: Rennes, Lannion and Brest, each of which has benefited from the gradual setting up of numerous R&D centres, the emergence of nu-merous innovative SMEs and a university environment (105,000 students).Brittany hosts a 3 star technology cluster according to the classification scheme used in this booklet. Leading French, Japa-nese, American and German corporations have launched numerous business units at the technopoles (technology parks??) of Rennes-Atalante, Lannion-Anticipa and Brest-Iroise.The IT sector of Brit-tany is characterised by two clusters which are both politically sup-ported and have contributed to the visibility of the sector in Brittany and beyond.

The main cluster initiative in the region, Images et Réseaux(media and networks) has been awarded the title of a globallyoriented pôle de compétitivitéby the French government. It was founded in 2005 and unifies manufacturers and researchers from the information, telecommunications and multimedia fieldsin the Brittany and the Pays-de-la-Loire region. The cluster specialises in the future use of the internet, television, and mobility and is organised as an associa-tion. The cluster was founded by France Télécom, Thomson, Thales, Alcatel and TDFand is thus more industry-driven. The second clus-ter in the region is the SISCom Bretagne Research Cluster for In-formation and Communication Sciences, which was founded in 2007 in order to promote ICT research in Brittany, develop academic net-works and increase its international visibility. SISCom is supported by the French government and the regional council of Brittany. In contrast to Images et Réseauxit was initiated by public actors only: the European University of Brittany, the French National Institute

for Research in Computer Science and Control-INRIA, the Institute TELECOM and the CNRS.

TheImages et Réseaux cluster initiative’s strategy is centred around the development of test and experimentation platforms. Thus the im-plementation of LEVIER (laboratoire d’expérimentation et de valor-isation images et réseaux), which is coordinated by the cluster can be seen as a great success, especially since it has received the Living Lab label from the European Union in 2007. Three other platforms are supported and maintained besides LEVIER.

The SISCom Bretagne Research Clustercluster initiative, in contrast, gives priority to internationalisation activities. This is supported by the funding of a research chair for outstanding foreign researchers. The institution was first launched for the academic year 2009 and can run up to three years.

At the end of 2009, the Images et Réseauxcluster had approximately 200 members in both Brittany and Pays-de-la-Loire which could be sub-divided into three groups: large companies with more than 250 employees, research institutes and higher education establishments and finally SMEs. Until now, approximately 250 research and de-velopment projects have been carried out within the thematic spec-trum of the cluster. Moreover, the Images et Réseauxcluster initia-tive has systematically developed its international cooperations over the years through cooperation agreements with other clusters.

The SISCom cluster, in contrast, continues to be dominated by pub-lic actors which is reflected in the structure of its members: 15 labo-ratories (predominantly public), 8 members from the academic sec-tor, 10 development and innovation platforms, 1 incubator, 1 foun-dation and the Images et Réseaux cluster. Sources: http://www.images-et-reseaux.com/ http://siscombretagne.inria.fr/platforms.html

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Case Study II: ICT Cluster in Stockholm

The Information and Communication Technology cluster of Stock-holm emerged steadily since the 1970s.For many years,Stockholmhas been of the world’s leading ICT regions. The number of ICT companies in the Stockholm region has grown stead-ily. In 2008, there were at least around 8,000 ICT companies in the Stockholm region, some sources even estimate up to 20,500. Em-ployment in the sector amounts to around 92,000.

Kista Science City, located in the north-west of Stockholm serves as an ICT business and innovation centre for ICT innovations and growth. The area was transformed from a military training area into a high-tech centre for Stockholm and Sweden. The location of firms in the area started in 1972. Driving forces in the beginning were Ericsson and IBM, which moved to Kista in 1976 and 1978 respec-tively. In 1983 the mayor of Stockholm took the initiative by draw-ing up a programme to create an electronics centre in Kista.

In the year 2000, the business community, academia and municipali-ties drew up a joint vision of the future to develop the area from a science park into a science city. In the following, Kista Science City ABwas formed as a platform to implement this vision. The initiative is a whollyowned subsidiary of the Electrum Foundation and an op-erative, non-profit organisation that works to market Kista as an in-teresting place to establish new business, and to encourage a strong cooperation between academia, research, and municipal and private activities in the area by actively strengthening and developing Kista Science City’s various networks.

In 1990, some 20,000 people worked in Kista in 200 firms from dif-ferent sectors. In the following decades, the park grew substantially. In the ICT sector, leading firms like Nokia, Microsoft, Apple and DCMset up operations alongside smaller firms and start-ups. By 2008, employment had more than tripled so that Kista’s more than 500 ICT firms alone now employ a work-force of nearly 21,000.

Recent development of Firm Population in the Kista Science City

2004 2006 2007 2008 2009

ICT companies 399 523 525 501 600

Employees 18,449 19,381 20,187 20,646 n/a

All companies 4,018 4,618 4,731 4,282 n/a

Total employees 54,928 59,853 62,248 63,749 65,550

Source: www.kista.com/adimo4/Site/kista/web/default.aspx?p=1587&t=h401&l=en

In addition to Kista Science City A/B, other initiatives and collabo-rative platforms have formed to strengthen the competitiveness of the ICT sector. An example is the Stockholm IT Region, a collabora-tive project run by a number of public and private groups with the aim of strengthening the competitiveness of the ICT industry in the Stockholm region.

Stockholm IT Region operates as work groups and focuses on the following strategic areas: ensuring access to a qualified skills base, marketing, and to provide infrastructure and digital services. Stock-holm IT Region is supported by Ericsson, TeliaSonera, IBM, Logica, Microsoft, City of Stockholm, Intel, Stockholm Business Region Development, Swedish IT and Telecom Industries, Kista Science City, Tieto, Stokab and Stockholm County Council. Sources: www.kista.com www.stockholmitregion.com

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http://www.kista.com/


Medical Technologies

Medical technology is a research-intensive sector with high exports. Large medical technology or health technology providers are found mostly in Germany, France, the UK and Sweden, countries with a noticeable concentration of competences. Regions, famous for their medical technology, such as Wales, Freiburg, UpperFranconia or WestSweden display either technology or employment clustering.

Technological competences are dispersed across the regions of north and central Europe. Combined clusters are predominantly present in German and French regions. Giving a hint of the overall integration of basic and applied research together with employment-intensive industries, this combination is not surprisingespecially for Germany, because Germany belongs to the countries which are international leaders in patenting activities in this sector (although the perform-ance varies greatly from sub-sector to sub-sector). Key drivers for the European market are exports to other OECD countries. This ap-plies especially to the German regions, which are characterised by high exports to the US.

A concentration of employment clusters is found,not surprisingly, in the regions of Germany and northern Italy. Since Germany and Italy produce medical technologies for export to OECD countries, em-ployment clusters are a logical consequence. Additionally, this pat-tern is also a consequence of the predominant regional firm struc-ture. The sector in these regions is dominated by SMEs, which are less R&D-intensive than larger enterprises, but are nevertheless im-portant employers in these regions.

In conclusion: technology clusters are more dispersed across Europe than employment clusters. The first are found in core Europe and peripheral regions whereas the latter are concentrated in the regions constituting the blue banana with only few exceptions.

Figure 5: Clusters in the Field of Medical Technologies

Outstanding Clusters in Medical Technology (Examples)


DEF0 - Schleswig-Holstein 6050 3.24 48 2.08 IE0 - Ireland 17509 4.53 40 3.01 DK0 - Denmark 8329 1.30 115 2.02


Case Study I: Medical Technology/Bioscience Wales

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Wales hosts a 2.5 star technology cluster and is home to one of the UK’s most well-established bioscience clusters with a long-standing reputation for scientific and academic excellence. The wider life sci-ences sector in Wales i.e. those companies involved in the research, development and manufacture of medical, biotechnology and phar-maceutical products involves around 276 dedicated companies and another 46 companies providing consultancy services to the sector. The sector has grown by over 19 per cent in the last three years and employs around 15,000 people, many in high quality post-graduate and post-doctoral roles. Additionally, a large number of Welsh NHS departments and academic institutions are engaged commercially in the sector, providing contract research, clinical trials, and increas-ingly licensing IP created by experts.

The success of the sector is built upon the links between the aca-demic centres based at Cardiff, Swansea, Aberystwyth and Bangor Universities and indigenous companies within the sector. Wales has produced many spin-off companies from its university sector. To date, over 45 bioscience spin-off companies have been created. The unique technology developed by these companies has led to a num-ber of licensing deals and eventually takeovers by larger multina-tional companies. Some of the largest global companies have R&D and manufacturing bases in Wales today, these include GE Health-care, Siemens, 3M, Convatec and Johnson & Johnson.

The Welsh bioscience sector is worth an estimated £1.24 bn per year and is highly competitive. Because of the cross-sectional character of the sector, it produces everything from medical consumables to cellular analysis platforms. Wales is home to a diverse range of companies and academic centres of excellence in stem cell research, cellular analysis, whole body imaging, wound care, in vitro diagnos-tics, medical device design and manufacture and the development of new medical materials. The bioscience sector has an estimated an-nual turnover of £1.3bn, with exports amounting to some £54m.

The Welsh government heavily supports the sectors of bioscience since the beginning of the decade and has contributed to their persis-tent success. The Welsh Assembly government provides funding and expertise for business support, which is complemented by ERDF funding. The main aim of the programmesis to drive forward col-laboration and research to improve the transfer of knowledge and expertise from the Welsh research base into the economy.

Moreover, the development of the sector is supported by ‘Team Wales’ the Bioscience & Healthcare team in ‘International Business Wales’, and through Technium, a business network that nurtures young technology businesses and by Finance Wales providing finan-cial support for business start-ups and SMEs.

A central institution in the cluster is the Institute of Life Science (ILS) at Swansea University’s School of Medicine, which was set up via a collaboration between IBM, the Welsh Assembly government and Swansea University. It is located on the University campus, ad-jacent to the University NHS Trust’s Singleton Hospital, with labo-ratories, a business centre and with business incubation suites for client organisations, and the IBM supercomputer, Blue C. It houses over 200 specialists, including professor-led research groups, tech-nology transfer experts and dedicated business support, actively seeking research collaboration and commercial engagement.

Finally, the Welsh Assembly government holds BioWales, an annual bioscience conference, biopartnering event and exhibition. The first conference was held in 2003. It was held in March 2009 for the sev-enth year in a row and has attracted 350 delegates from the UK and Europe, with more than 45 exhibitors. Sources: www.ibwales.com; personal mail contact with cluster manager

Case Study II: Medical Technology in Denmark and Medicon Valley

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Denmark has a substantial and influential medical technology indus-try. The medical technology sector of Denmark employs about 12,000 people in 90 companies with R&D and/or production in Denmark. Due to a particular focus on research and development, design and innovation, market testing, high-tech production and strong user-producer linkages, Denmark has become one of Europe’s leading medical technology industrial nations.

With an export quota of more than 90%,the Danish medical technol-ogy industry is internationally well-known, in particular for its large, global companies manufacturing medical disposables, assistive de-vices and medical diagnostics. Denmark is home to major companies of the med-tech sector like Ambu International, Bayer, B-K Medical, B&O Medicom, Byrumlabflex, Dan-sac, Fresenius Kabi, GE Healthcare, Johnson & Johnson, Medtronic, Novo Nordisk, Nunc, Radiometer Medical, Siemens Medical Solutions, St. Jude Medical, Toshiba Medical Systems and Unomedical. Furthermore, a high in-tensity of research and testing activities at Danish university hospi-tals contributes to the development of the cluster.A close collabora-tion between universities, university hospitals and the business community facilitates a conducive business environment. Currently, approximately 40,000 employees work in the private life science sector. About 200 therapeutical compounds are in the pipeline, of which quite a number are in advanced stages (Phases 2 and 3 of clinical trials). Some have recently been approved.

Supported by the major pharmaceutical companies in the region, the universities Lund and Copenhagen founded the Medicon Valley Academy in 1997. Initially the project was based on Interreg II fund-ing and over time developed into a cluster organisation. A strong presence of universities in biological and medical research, together with the presence of a number of fully integrated pharmaceutical companies contributed to the development of the cluster.

In 2007,the Medicon Valley Academy changed its name into Medi-con Valley Alliance to highlight its broader foundation, including academia, but also the business and private domain of the region. Today, the Medicon Valley Alliance located in the Oresund area is a Danish-Swedish cluster organisation representing human life sci-ences in Medicon Valley. It is organised as a non-profit, member-ship-fee-based organisation.Currently, the Medicon Valley Alliance has more than 550 members. Its central objectives are to facilitate networking, to organise events and seminars and to perform analyti-cal studies about the development of the industry.

The members of the cluster include SMEs, large enterprises, hospi-tals, universities and public research institutions. According to offi-cial statistics there are 171 med-tech companies, 84 biotech compa-nies, 82 business service providers, 66 contract research organisa-tions, 31 contract manufacturing organisations, 31 laboratory service providers and suppliers, 25 investors and business developers, 25 pharmaceutical companies, 17 public organisations, 13 support or-ganisations and 9 academic institutions. Its members are predomi-nantly Swedish and Danish.

The life science ambassador programme of the Medical Valley Alli-ance became one of the beacons among the various activities of the cluster as it provides its members with a unique opportunity to find partners, investors, and sponsors in hot-spots of development around the world. Life science ambassadors operate as high-level connec-tors, ensuring direct access to decision-makers globally. The life sci-ence ambassadors of the cluster are all multi-lingual, with extensive experience in the life science industry and an in-depth knowledge of the region they operate in. At the moment four medical clusters are directly linked through the exchange of life science ambassadors. Sources: www.mva.org; www.mediconvalley.com; personal mail contact with cluster manager.

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Biopharma

Typical products or technologies of the biopharmaceutical industry include recombinant and other proteins, monoclonal antibodies, vac-cines, enzymes, blood products, cultured cells and tissues, and bio-technology-based drug development in general. The industry is among the most research-intensive sectors and is typically catego-rized into the group of high-technology industries. In addition to the aforementioned therapeutic products, diagnostics constitute another pillar of the industry. In this regard, technology platforms (e.g. bio catalysis) are considered as being important for the competitiveness of the whole industry.

The spatial pattern of biopharma clusters in Europe shows quite a dispersed structure. Apart from a few employment clusters in central France (ranging from Auvergne to Picardie), in southern Germany (ranging from Freiburg to Kassel) and in the south-western part of the United Kingdom, no coherent pattern can be observed.

Clearly technology-driven are the clusters in Denmark, in the south western part of the United Kingdom (East Anglia, Berkshire, Buck-inghamshire, Oxfordshire, London), Northern Ireland, Latvia, Eszak-Alföld (Hungary) and in the two Spanish regions Galicia and Cataluna. A few other dispersed clusters with less technology output have been identified in southern Hungary, Sardegna, Andalucia, Sydsvergie, south-western Scotland, East Anglia, Leicestershire, Rutland, Northamptonshire, Kent and Köln. Combined clusters are the regions Oberbayern (with Munich as the German biotech cluster per se), Lombardia, Rhone-Alpes, Düsseldorf, Wallonne, and Vlaams Gewest. However, significant employment – without being in the group of technology-driven clusters – can be observed in Northern Ireland, large parts of central France, Toscana, the southern part of Germany (Freiburg, Tübingen, Karlsruhe, Rheinhessen-Pfalz to Kassel in Niedersachsen), Schleswig-Holstein and Mazowieckie in Poland, as well as Stockholm in Sweden.

Figure 6: Clusters in the Field of Biopharma

Outstanding Biopharma Clusters (Examples)


DE30 - Berlin 10,350 2.27 117 2.40 ITE4 - Lazio 21,990 2.40 55 3.16 DK0 - Denmark 17,327 1.47 239 2.88


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To summarize, the existence of various biopharmaceutical clusters in the European Union documents that – from an employment and technology perspective - this particular industry forms an integral part of the national innovations systems in many countries. How-ever, the establishment of many biopharma clusters is also the result of massive public support for the industry at various policy levels. It remains to be seen whether the peripheral technology-driven bio-pharma clusters in particular will be able to create the sufficient “critical mass” of private companies needed for a sustainable cluster dynamic. At the moment, only a few clusters in the United King-dom, Oberbayern, Rhone-Alpes and southern Sweden are interna-tional competitive and visible.


Case Study I: The Scottish Biotech Cluster – Dundee/Edinburgh/Glasgow Triangle

The biotechnology industry in Scotland is growing steadily, with more than 100 biotechnology companies employing some 3,600 in-dividuals. The vast majority is highly geographically concentrated in the Dundee/Edinburgh/Glasgow triangle called the Scottish Biotech Cluster. The majority of the Scottish biotech companies are small in size. Key areas of technological strengths include:

• The production of new antibiotics • Development of innovative technologies for the diagnosis and

treatment of cancer • Methods to accelerate drug development and reduce product attri-

tion • Development of human antibody-producing cell lines for use

against infectious disease • Products for psychiatric and neurological disorders. Key companies include CXR Biosciences, Auvation Ltd., ProStra-kan, Cyclacel, Ardana Bioscience, Geron Bio-Med and Scottish Biomedical Ltd. This cluster of companies has a strong and dynamic support network including a base of six drug delivery and formula-tion companies; over 40 pharmaceutical clinical trials support and contract research organisations involved in the support of supply of the drug discovery and development process.

Innovation and technology policy played a significant role in the process of the cluster formation. By early 2002, oil, gas, transport and financial services continued to flourish and to improve the com-petitiveness of the Scottish economy, but the need to counterbalance the volatility deriving from an excessive reliance on investments made by foreign MNCs was recognized. As a result, the focus of policy interest shifted towards possible ways of stimulating entre-preneurship and the creation of locally anchored businesses with high growth potentials. Together with the identification of five in-

dustrial sectors – among them biotechnology - the cluster thinking was implemented.

Scottish Enterprise, the Scottish government’s economic develop-ment agency, established a biotechnology team in 1994, and has pur-sued a focused policy of developing the biocluster on a number of fronts. The Scottish Enterprise model involved supporting research institutions in their efforts to attract commercial research and to fa-miliarise academic researchers with the requirements and rewards of working with company funding as opposed to government funding. In addition, Scottish Enterprise supports the technology transfer in-frastructure by identifying promising technologies at home and abroad.

Scottish biotechnology has numerous centres of excellence. The bio-cluster has benefited from leading research universities that are world leaders in some areas of research, such as oncology at Dundee University, neuroscience at the Beatson Institute for Cancer Re-search at Glasgow University, also the Centre for Genomic Technol-ogy and Informatics, and ESRC Innogen (bio-innovation research) at Edinburgh University.

According to Cooke (2006), the main reasons for the growth of the biocluster are a conducive infrastructure with incubators and science parks, the existence of a combined science and business talent pool that is supported by up to 30 private bio-investors (notably the busi-ness angel network), the provision of grants and loans by the Scot-tish and UK governments (to assist capital investment) and finally, a collaborative attitude among universities, between them and R&D centres and among firms. Sources: Scottish Enterprise: www.scottish-enterprise.com Life Sciences Scotland: www.lifesciencesscotland.com Cooke, P. (2006): European Asymmetries: A comparative Analysis of German and UK Biotechnology Clusters (www.dime-eu-org/files/.../Cooke%2006%20 European%20Asymmetries.pdf).

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http://www.dime-eu-org/files/.../Cooke%2006


Case Study II: The Cambridge Biotechnology Cluster

Like the regional biotechnology cluster in Scotland (and Oxford), the Cambridge biotechnology cluster is concentrated close to glob-ally significant research universities. According to the most recent figures provided by the regional biotechnology industry organisation ERBI, in 2006 Cambridge was home to over 185 biotech companies (of which 109 were core therapeutics firms, while 47 were biophar-maceuticals drug discovery firms active in genomic and post-genomic drug discovery). The Cambridge cluster grew quite rapidly, from 36 biotechnology firms in 1998 to 185 in 2006. ERBI also an-nounced that Cambridge hosts 20% of the world's Nobel Prize win-ners in medicine and chemistry, 17 of the UK's publicly quoted bio-tech companies and a quarter of the public biotechnology firms in Europe. Such is Cambridge's status that numerous international bio-pharmaceuticals laboratories have located nearby. Examples of in-ward investment include Amgen, Beacon, Chiron, Genzyme, Medi-vir and Millennium amongst others.

The Cambridge biocluster specialises in healthcare biotechnology. The two categories of ‘biopharmarceuticals including vaccines’ and ‘pharmaceuticals largely from chemical synthesis’ registered four-teen and nine Cambridge firms respectively in 1998, expanding to 47 and 20 in 2006, evidence of the rapid rise of biotechnology over fine chemistry in the pharmaceuticals industry in general. The public infrastructure support for biotechnology in and around Cambridge is impressive, much of it deriving from the university and hospital re-search facilities. The Laboratory of Molecular Biology at Adden-brookes Hospital, funded by the Medical Research Council; Cam-bridge University’s Institute of Biotechnology, Department of Ge-netics and Centre for Protein Engineering; the European Bioinfor-matics Institute; the Babraham Institute and Sanger Institute with their emphasis on functional genomics research and the Babraham and St. John’s incubators for biotechnology start-ups and commer-

cialisation, are all globally-recognised facilities, particularly in bio-pharmaceuticals.

In Cambridge there has never been a public support policy such as BioRegio in Germany (see below on the formation of the Munich biotechnology cluster), though there have been public technology initiatives for biotechnology such as DTI’s Biotechnology Exploita-tion Platforms involving university collaboration with National Health Service Trusts inter alia (Cooke 2006). The biotechnology association ERBI is the main regional network with formal respon-sibilities for newsletter, organizing network meetings, running an international conference, website, sourcebook and database on the bioscience industry, providing aftercare services for bio-businesses, making intra- and international links (e.g. Oxford, San Diego), or-ganising common purchasing, business planning seminars, and gov-ernment and grant-related interactions for firms. It was established before the East of England Development Agency (EEDA) was cre-ated in 1999, but ERBI was originally 50% funded by the UKDe-partment of Trade & Industry, the rest coming from membership subscriptions (currently 370 members). Nowadays EEDA partly funds ERBI’s activities. Sources: www.erbi.co.uk Cooke (2006): European Asymmetries: A comparative Analysis of German and UK Biotechnology Clusters (www.dime-eu-org/files/.../Cooke%2006%20 Euro-pean%20Asymmetries.pdf). www.kooperation-international.de/countries/themes/international/clusterlist/cluster-cambridge http://new.cambridgenetwork.co.uk

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http://www.dime-eu-org/files/.../Cooke%2006


Chemical Technologies

The chemical technologies sector contains chemical equipment sup-pliers, product-oriented firms (platform technologies) as well as ser-vice providers. Typical activities of this quite heterogeneous indus-try include, among others, catalysts and absorbents, pollution control and waste recycling, polymer additives and speciality chemicals, cleaning and maintenance. However, although it does not belong to the high-tech industries, the sector is nevertheless quite research-intensive. The industry is dominated by large multinational enter-prises (MNEs) which originated from the “traditional” chemical in-dustry, but also by innovative SMEs taking over the role as suppliers for MNEs and being highly specialized in technological niches.

The pattern of potentials in the field of chemical technologies is dis-persed across Europe, whereas central Europe – Belgium, the Neth-erlands, Denmark, parts of Germany, northern Italy and France and the United Kingdom and Ireland - combine the regions with the largest potential, employment- and technology-wise. In the southern periphery of Europe, three employment clusters in Spain (Comuni-dad de Madrid, Cataluna, Comunidad Valenciana) as well as Kriti deserve to be mentioned. In eastern Europe, scattered clusters could be identified in Poland, Hungary and Romania.

Technology-wise, southern Germany (Baden-Württemberg and Ba-varia), the French regions of Aquitaine and Auvergne, Belgium (Ré-gion Wallone), Emilia-Romagna in Italy as well as two northern Polish regions show considerable cluster activities. Combined clus-ters were identified in Denmark, Oberbayern, Rheinhessen-Pfalz, Darmstadt, Düsseldorf, Ile de France and Haute-Normandie. The most important employment clusters are dispersed across Europe, whereas the aforementioned Spanish regions, parts of southern France and northern Italy as well as Ireland, Vlaanderen and Noord- and Zuid Holland, central Poland regions, and the Hungarian region of Eszak-Magyarorszag are outstanding.

Figure 7: Clusters in the Field of Chemical Technolo-gies

Outstanding Chemical Clusters (Examples)


DEB3 - Rheinhessen-Pfalz 40075 13.00 403 2.27 BE2 - Vlaams Gewest 21937 2.10 278 1.40 FR71 - Rhône-Alpes 20361 2.01 338 1.15

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Case Study I: The International Competitiveness Cluster Lyon and Rhône-Alpes - Chemicals and Environment

The chemicals and environment cluster Rhône-Alpes is the leading chemicals production centre in France, the second largest chemicals region in France and the second largest region in the eco-industries sector in France (by staff numbers). In the region itself, it is the sec-ond largest industrial sector by turnover and the third largest re-gional employer. The cluster relies on a major potential in research, development and innovation. The research facility at the Vallée de la Chimie, with 5 research centres in the field and more than 6,300 jobs deserves particular mention. The cluster's technological potential lies primarily in the field of environmental catalysis and in processes, materials and waste management. A high level of training with the ability of the cluster to draw on a regional training potential of around 1,300 chemical engineers and 1,350 chemistry doctors a year are further characteristics of the cluster.Thus, Rhône-Alpes offers a chain of top-tier comprehensive training with a strong reputation in chemicals and the environment, from operators through to engineers, including ongoing training.

Since the creation of the pôle de compétitivité in 2005, membership in the cluster initiative grew steadily from 100 to more than 170 members.

The aim of the Lyon and Rhône-Alpes Chemicals and Environment competitiveness cluster initiative is to accelerate the shift towards a cutting-edge chemicals sector that integrates environment manage-ment through eco-design. This vision of a cutting-edge chemicals industry results in: • The design of new and more durable products

• The design of new and cleaner manufacturing processes • R&D activities among the best in the world • The training of industry players and developments in working

methods. The technological challenges that members of the cluster are cur-rently addressing include the increasing use of renewable raw mate-rials, developing cleaner production processes and using less energy, creating longer-lasting products and recycling all materials at the end of their life cycles. The technological profile of the cluster in-cludes among others sustainable buildings, renewable energies, wa-ter, airs, soils, agro-chemistry, materials recycling, bio resources, etc. A number of players from industry, research and training are directly involved and mobilized in the cluster activities, receiving assistance from various institutional partners. In geographical terms, they have their origin in the Rhône-Alpes region,also in neighbour-ing departments or other French regions. The cluster development and coordination is carried out by the AXELERA Association which was established in 2005 by the clus-ter’s founding members, namely Arkema, Rhodia, GDF SUEZ (groups), IFP a world-class public research and training centre and CNRS a government-funded research organisation.

The core activities of AXELERA include (1) ensuring the develop-ment of collaborative technology projects, (2) helping new members to integrate into the chemicals and environment network, (3) offer-ing personalised innovation assistance, (4) helping to obtain addi-tional financing, and (5) international assistance. In line with the core strategy of the cluster, its activities are based on the following objectives:

• Increase the number of R&D partnership projects, with qualified and quantified environmental objectives

• Create added value for companies and the region

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• Increase dialogue and collaboration between the various types of participants

• Strengthen the cluster’s international activities • Implement cross-disciplinary projects.

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To achievethese objectives, AXELERA gathers and coordinates in-dustry, business, research and training participants: around 12 tech-nology cooperation projects were initiated in three major fields (ca-talysis, processes and materials). At the same time, five cross-disciplinary projects are being put together to establish the cluster as a technology and business entity and foster its international deploy-ment. Governance is provided by a central office backed by a board of di-rectors, run by three colleagues, and a science board.The association is run by a general representative, assisted by three colleagues, who coordinate and manage the cluster’s day-to-day activities. After receiving its pôle de compétitivitélabel, AXELERA established a working group contributed to by the founding members, Grand Lyon and Grenoble-Alpes Métropole.This group which is responsi-ble for the cluster’s promotion and communications, develops and implements numerous tools and activities aimed at increasing the cluster’s visibility and influence (website, newsletter, press releases, AXELERA Thursdays, etc.). Sources: www.axelera.org/srt/axelera/home; www.chemiecluster-bayern.de/cluster-partner/ Cluster Chemical Industries and Plastics, www.cluster-chemie-kunststoffe.de; Chemicals Northwest (UK): www.chemicalsnorthwest.org.uk; Northeast process industry cluster (UK): www.nepic.co.uk

http://www.axelera.org/srt/axelera/home


Case Study II: Chemicals Northwest (UK)

England’s north west is the UK’s leading chemical manufacturing region with 650 businesses operating in the sector, directly employ-ing 50,000 people and making an annual contribution of £3 bn to the regional economy. The industry is diverse with many innovative companies covering the whole spectrum of modern chemical indus-try. Leading businesses of all sizes can be found in the north west undertaking research, manufacturing and distribution throughout the world. The chemicals industry in the region covers a number of spe-cialist manufacturing categories, including agro-chemicals, deter-gents, petrochemicals, plastics, coatings and advanced flexible mate-rials. The sector is the north west’s largest exporter, with almost 60% of its output sold overseas. Companies in the region include Unilever, Fujifilm and PZ Cussons.

The cluster management organisation is called Chemicals Northwest (CNW); it is an industry-led, not-for-profit cluster support organisa-tion that works with the chemistry-using industries of the north west. CNW was funded jointly by its member organisations and the re-gional development agency, Northwest Regional Development Agency (NWDA). CNW currently represents over 150 members who serve a wide range of markets, including pharmaceuticals, automotive, electronics and construction.

Apart from its member organisations, CNW reaches some 500 core chemical companies throughout the region plus a large proportion of downstream and support companies. Chemicals Northwest exists to act as a catalyst for raising the competitiveness and profile of the chemical-using industries of the north west. As a membership or-ganisation that supports and promotes the interests and activities of the chemistry-using industries, CNW works in partnership with both the private and public sectors, and encourages the growth of the chemical industry.

The key activities focus on four strategic themes:

• equipping the current and future workforce with the skills they need

• advancing sustainable development practices in the industry • focusing industry and academic research for future innovation • improving the image of the industry and promoting its benefits to

society.

The organisation provides all the links between the core chemical producers, downstream users and service sector organisations closely linked to the sector as well as academia, local government and other stakeholders in the industry. The focus of Chemicals Northwest is on skills, sustainability, image and innovation with the aim of driving sustainable development for the chemistry-using in-dustries in the northwest region. Sources: Chemicals Northwest (UK): www.chemicalsnorthwest.org.uk; UK Trade & Investment: www.uktradeinvest.gov.uk/.../sectors;...%2Fchemicals Northwest Regional Development Agency: www.nwda.co.uk

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http://www.chemicalsnorthwest.org.uk/membership/directory/

http://www.chemicalsnorthwest.org.uk/membership/

http://www.chemicalsnorthwest.org.uk/key_activities/

http://www.chemicalsnorthwest.org.uk/key_activities/skills/

http://www.chemicalsnorthwest.org.uk/key_activities/sustainable-development/

http://www.chemicalsnorthwest.org.uk/key_activities/innovation/

http://www.chemicalsnorthwest.org.uk/key_activities/image/

http://www.uktradeinvest.gov.uk/.../sectors;...%2Fchemicals


Instruments

The field of measurement and control technologies is an engineering field and thus characterised by a mixture of small, medium-sized and large firms dealing with a number of different issues, from the de-sign of simple instruments to complex control systems. It is a quite particular case in that the clustering of patent applications is more widespread than the clustering of employment.

With regard to employment clusters, there is a very dominant con-centration in central and southern Germany complemented by some clusters in northern Germany, Denmark, France and the Czech Re-public. With regard to employment, the instruments sector displays no tendency to cluster in either northern or eastern Europe.

With regard to clusters of patent applications, however, the picture is different. According to this measure, the most remarkable concentra-tion is to be found in the region of Midi-Pyrénées. Additionally, there are a number of – even if weak – clusters in Sweden, Finland, Estonia, the Czech Republic, Poland, Portugal and even Romania. Also, the UK has a stronger position with regard to patent applica-tion clusters than employment clusters.

In contrast, the concentration of patent applications seems to be weaker than that of employment in a number of German regions.

While the instruments sector can be regarded as a very concentrated field with regard to the distribution of employment clusters, this is not the case with patent applications.

Consequently, there is a only small number of mere employment clusters, the most obvious of them located in northern Germany and in Poitou-Charentes.

Even more than in other fields, very few clusters of activity can be detected in southern Europe.

Figure 8: Clusters in the Field of Instruments

Outstanding Instruments Clusters (Examples)


DE13 - Freiburg 17,315 8.58 128 1.51 FR62 - Midi-Pyrénées 4,586 2.02 58 2.15 DE21 - Oberbayern 21,339 4.65 243 1.23


Case Study I: The Sensor Technology Cluster in Bavaria

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The field of sensor technology is a significant and integral part of everyday life. Sensors can be found in many products from home appliances to highlydeveloped medical equipment. Moreover, they are needed in nearly every industrial production process.

In Bavaria, the local sensor technology sector is a driver of innova-tion in other important regional industries, such as the automation industry, the automotive industry, the medical technologies sector, the environmental technologies sector or the life sciences industry. Sensors made in Bavaria enjoy a good reputation regarding quality, efficiency and innovativeness. According to current figures, about 23% of all companies of the German sensor technology industry are located in Bavaria and produce the major part of the sector’s turn-over. This makes Bavaria the sensor centre of Germany. Multina-tional enterprises such as Siemens, Infineon and EADS can be found among them, but also SMEs. Furthermore, institutes of higher edu-cation and research centres as well as highly specialised trade fairs focus on the development of new and innovative sensor technologies and applications.

The Sensor Technology Cluster initiative is a cluster networkbased in the city of Regensburg in the federal state of Bavaria in southern Germany. It is one of several clusters which belong to the high-tech initiative Cluster Offensive Bavaria, a programme that was initiated in 2006 by the federal state of Bavaria.

The association Strategic Partnership of Sensor Technology e.V.(SPS)represents the core of the cluster initiative and provides an organisational framework and a consistent platform for its members. About 30 of the more than 40 members of the association are also members of the Sensor Technology Clusterinitiative. Consequently, both companies and scientific institutions within the region benefit from a large number of common activities related to both general networking and the preparation and launch of concrete joint projects.

Due to the complementarity of the two organisations’ activities. it is allowed and even encouraged that the members of the Strategic Partnership of Sensor Technologyjoin the Sensor Technology Clus-ter network as well.

The central objective of the Sensor Technology Cluster initiative is to sustain and increase the innovative capabilities of all its members and to increase the productivity of the companies in the cluster. For that purpose a number of different activities have been launched which target quicker transfers of research results into market-ready applications and a strengthening of the regional value chain.

In summary, the intensification of networking and actual collabora-tion between the actors involved is valued as the key to ensure the cluster’s market and technology leadership in the sector of sensor technologies.

In 2009, the Strategic Partnership for Sensor Technology received the national Competence Network 2009 award, indicating that the cluster initiative is considered one of the best networks due to its outstanding network activities and effective instruments to foster cooperation.

In addition, the Sensor Technology Cluster initiative pays special attention to improving the competence of its members and promot-ing entrepreneurial and scientific workshops. Expert panels which take place at regular intervals provide a platform for discussions of relevant topics and the exchange of information. Moreover, invest-ments in basic and advanced education and qualification of employ-ees of partners are made, to enable growth and to bring about more projects for cooperation in the future. Sources: www.sensorik-bayern.de www.cluster-bayern.de/cluster/sensorik_leistungselektronik/sensorik.html www.ihk-regensburg.de/content/270307i

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Case Study II: The Mechatronics Cluster Denmark

The Mechatronics Cluster Denmark is located in the region of South Jutland in the area around the city of Sønderborg. It has developed since the late 1960s/early 1970s. Many of the 70 cluster companies are market leaders within their fields and generate a fiscal turnover of more than € 1.34 bn. Together they employ more than 10,000 people.Every second job position in the cluster region (55%) thus depends on one of the companies of the mechatronics industry. The key firms in the region are DanfossA/S, SauerDanfoss and LINAK. Danfoss A/S is Denmark’s largest industrial corporation.

Moreover, a number of world-class R&D institutions in the field of mechatronics are located in the Sønderborg area. The University of Southern Denmark (USD) – Campus Sønderborg isa key player in the regional sectoral innovation system. Its Mads Clausen Institute is one of the leading authorities in the field of mechatronics research in Denmark with key competences in software, mathematical model-ing, user-oriented design and nanotechnology.

Moreover, a number of local applied research institutions improve the linkage between the public and the private sector: the USD Cen-tre for Product Development, the NanoSyd R&D Centre, the Centre for Software Innovation, the Science Park of Southern Denmark (Forskerparken), and the Mads Clausen Entrepreneur Park.

The cluster is supported by the “Mechatronics Cluster Denmark” initiative, supported by the European Regional Development Fund. A first working group was initially established based on an initiative by Danfoss in 2004, financed by the Bitten and the Mads Clausen Foundation. The members of this group were mostly suppliers or sub-suppliers of Danfoss. A full-time project manager for the initia-tive was employed in 2006, financed by the city of Sønderborg. Cur-rently, the Mechatronics Cluster Denmark has about 27 members. Up to today, the regional SMEs in the mechatronics sector continue to depend on activities in one of the three major companies to such

an extent that official presentations of the cluster initiative put these, rather than the initiative itself, at the centre of the regional network.

Through intensive and regular collaboration, the partners in the re-gion have created an attractive business atmosphere. According to the cluster initiative, numerous examples for unconventional b2b relationships have been initiated and provide evidence of an entre-preneurial spirit among the cluster members.

Additionally, several university level and short-to-medium-cycle higher education programmes have been set up to educate the highly qualified employees of the future who can sustain the growth of the industry through the development of innovative products.Likewise, a unique innovation partnership has been established between the Mechatronics Cluster and the University of Southern Denmark

Located in one of Denmark’s strongest clusters of competenceand an influential regional innovation system, the cluster initiative has suc-ceeded in developing itself into a platform for cooperation and a key to successful networking for the participating partners. Through sharing special competences and business knowledge, the cluster members benefited from theagglomeration of specialised firms in the sector.

Furthermore, the Mechatronics Cluster Denmark collaborates with another dynamic Danish cluster network in the Sønderborg area, the Cooling Cluster (KVCA), thus working towards an integration of the economic competencies of the region.

The Mechatronics Cluster in Southern Denmark has been given the award for being the third most creative region in Denmark. The main reason for winning this award wasthe well-developed pool of spe-cialised and advanced engineering skills in the region’s firms. Sources: www.mechatronicsclusterdenmark.dk/pages/id1.asp; personal mail contact; www.investindk.com/visNyhed.asp?artikelID=11610

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43

Summary

In addition to the field-specific analysis of European clustering with regard to both employment and technology, the case study findings listed in Table 2 have yielded the following insights.

• In most cases studied, more than 10,000 people are employed in the cluster under investigation and turnover tends to ex-ceed € 1 bn. The examples thus illustrate that in many cases cluster policy is aimed at improving pre-existing economic structures rather than at creating new ones.

• When looking at the previous studies, it becomes obvious that fully public-driven clusters are rare. Instead, a mixed PPP based set-up seems to be far more common. In many clusters, cooperations between heterogeneous local stake-holders seem to pre-date the cluster policy to some extent. On the other hand, a significant number of predominantly business-driven clusters suggests that a lack of active in-volvement of public R&D institutions seems to be a key challenge in many clusters.

• Generally, the dynamic of development of the clusters under study was at least moderately positive, irrespective of the ex-act form of political support that is provided.

• Most support initiatives that resulted in the set-up of a cluster support organisation (under the “cluster” label) date from the early to mid 2000s. Germany, the UK and Sweden seem to be have been leaders in the field with some cluster organisa-tions set up as early as the 1980s or 1990s (although at the time not yet under the “cluster” label).

• In an interesting contrast to earlier findings on the general driving forces in the cluster itself, most cluster initiatives are predominantly financed by the public sector, this underlines that they are set up to amend market failures and to involve additional actors in a way that industry alone could not.

• On the other hand, someclusters (Stockholm, Helsinki and Scotland) illustrate that sectoral support initiatives may pre-date or even permanently substitute policies under the cluster “label”. Such policies do in cases date back to at least the 1980s and could e.g. be identified in nearly all automotive and aerospace clusters studied as well.

In conclusion, the case study based analysis reveals that, since around the early 2000s, a clear policy response can be observed to the existing pattern of clustering in all cluster fields under study.

The relationship between of the clusters themselves and the related cluster initiatives, however, remains complex. In most cases, cluster initiatives are set up as a public reaction to developments in pre-existing clusters that are at least partially business-driven. Whether one integrated or a number of different initiatives are set up – and if the “cluster” label is used –will depend on the national and regional policy framework as much as on the local socio-economic situation. Therefore, individual policy responses cannot be predicted – nor could advice on a suitable intervention be given – based on a statisti-cal analysis of any one particular cluster alone.

One central finding, however, remains that nearly all cluster initia-tives act complementarily. Most clusters are already centred around one or several larger firms, the integrative momentum of which can be leveraged. What is less developed in most cases is the meaningful involvement of public R&D institutions, as well as a better linkage of the local firm’s development activities. In brief, many cluster ini-tiatives set out to forge better links between the industrial (employ-ment) and the scientific (technological) side of combined clusters.

Moreover, there are generalisable differences in the challenges that cluster initiatives will meet, depending on the stage of development of the specific cluster they aim to support. The point that it starts from should have important implications for the strategic alignment of its activities – which will be discussed in the following section.


Table 2: Overview of Case Studies

Aerospace Hamburg

Aerospace PACA

Automotive CENTROPE

Automotive Väst Sverige

MechatronicsSønderborg

Sensorics Bavaria

IT PACA

I-Region Karlsruhe

Size of cluster ~36,000 employment

>35,000 employment 5.5 billion turnover

~36,000 employment

5 billion turnover

~60,000 employment

10,000 employment >1.3 billion

turnover

narrow: 1,000 employment

broad: 15,000 employment

41,000 employment

36,000 employment

3,500 enterprises

Dynamics positive positive positive stagnation unclear unclear positive positive Structure of enterprises (SME vs. MNE dominated)

centred around MNE but

mixed


mixed


mixed


mixed


mixed


mixed

70% of indus-trial actors

SMEs, MNEs other

centred around SMEs (some with internat. reputation)

Public-driven vs. business-driven

mixed mixed business-driven

public- driven

business-driven

public- driven

mixed dominantly business-

driven Start of organised support (year)

2004 2006 2001 (ACVR)2007

(INTERREG III)

2002 2006 2006 2005 1997

Kind of organised support/organisation

leading edge cluster

pôle de compétitivité

business pro-motion agency/

INTERREG IIIa

non-profit, governmental organization

membership based

organisation

membership based

organisation

pôle de compétitivité

high-tech en-terprise net-

work

Cluster management organisation (name)

Hanse Aerospace

Pôle Pégase

ACVR/ AC-CENTROPE

Automotive Sweden

Mechatronics Cluster

Denmark

Sensor Technology

Cluster

Solutions Communi-

cantes Sécurisées

Cyber Forum

Source of funding (public, private, PPP)

PPP mostly public

mostly public

public ERDF (public?)

public regional

mostly public PPP, mostly private

44


Table 2 (Continued): Overview of Case Studies

ICT Brittany

ICT Stockholm

Medical Technology

Wales

Medical Technology

Denmark

ICT Helsinki

BioPharma Scotland

BioPharma Cambridge

Lyon-Rhone-Alpes

Size of cluster >50,000 employment

105,000 students

~92,000 employment

8,000 enterprises

~15,000 employment £1.3 billion

turnover

12,000 employment

~20,000 employment

3,600 employment 100 biotech companies

185 biotech

companies

6,300 employment

Dynamics unclear moderate growth

unclear unclear positive moderate growth

dynamic dynamic

Structure of enterprises (SME vs. MNE dominated)

centred around MNEs,

but mixed

centred around MNEs,

but mixed

centred around SMEs

mixed centred around one

MNE, but mixed

mixed mixed unclear


business-driven (I&R), public-driven

(SISCom)

business driven

mixed mixed but mostly

business driven

business driven

mixed (publicly initiated)

private driven

business driven

Start of organised support (year)

2005 1983 (early 2000s) 1997 (INTERREG II)

(1982) (TEKES)

(1994) 1999 2005


pôle de competétivité

non-profit organisation

different (business) support or-ganisations

non-profit organisation, membership

fees

general S&T policy targeting the

sector

public organisation

public-private partnership



Images et Réseaux, SISCom

Kista Science City,

Stockholm IT Region

none that is specific

Medicon Valley

Academy

no specific orgnisation

Scottish Enterprise

ERBI (biotech

association)

Axelera (170

Members)

Source of funding (public, private, PPP)

mostly public public and private

public and private

mostly private mostly private mostly public public and private

public and private

45


Table 2 (Continued): Overview of Case Studies

Chemicals Northwest

Size of cluster 50.000 employment

650 companies

Dynamics moderate

Structure of enterprises (SME vs. MNE dominated)

centred around

MNEs, but mixed


business driven

Start of organised support (year)

__




Chemicals Northwest

(CNW) Source of funding (public, private, PPP)

public and private

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IV The Evolution of Clusters Beyond their basic nature (technology/employment), their internal structure and factors that cause their emergence, clusters can be ana-lysed and classified according to their stage of development.

In this field, however, a clear differentiation has to be made between two quite different – even though connected – issues:

- The stage of development of the cluster as such, and

- The stage of development of political support for the cluster.

Quite often, political terminology uses the term “cluster” to refer to cluster organisations, which in itself is not a problem. When study-ing the evolution of clusters, however, it is necessary to remain aware that in a market economy a well-connected cluster of firms and even scientific institutions can emerge and evolve without such organised support. Moreover, it could receive substantial public sup-port through a number of non-centralised agencies (industrial asso-ciations, government department) none of which bears the label “cluster (organisation)”.

Certainly, this does not question the suitability of cluster policies in places where such a self-triggered evolution does not take place. Nonetheless, it clearly suggests analysing both issues separately.

As we will see, there are no automatisms and no certainties with re-gard to cluster development. To comprehensively understand a cer-tain cluster and to be able to assess how it may develop in the future, we will therefore need information about its own as well as the ac-companying policy organisations’ stage of development.

Moreover, many framework conditions have to be taken into ac-count. While some clusters start out as technology clusters (as a ten-dency in the centres of the European economy), others start out as employment clusters. Naturally, their expectable – and desirable – paths of development will be quite different.

Development Stages of Clusters

In the past decade, there has been extensive academic debate about a suitable life cycle model of clusters. Due to the substantial diversity of the phenomena subsumed under the heading of clusters, however, a ‘general theory of cluster development’ has not yet evolved and with all likelihood will not do so in the coming years.

A very accessible summary of the last decade’s academic findings (e.g. Enright, 2000) has been provided by Menzel and Fornahl (2007). Their discussion and own synthesis of the current debate on cluster development can be summarised in a number of key points.

As a general concept, the life cycle of a cluster can be considered as connected to the technological life cycle of the respective technol-ogy. More precisely, it has been empirically demonstrated that ag-glomeration and clustering are phenomena connected to the growth phase of an industry (e.g. Audretsch and Feldman, 1996). Generally, the need for intensive interaction in the early stages of technological development as well as the presence of certain focal actors (research institutes, universities, large R&D-oriented enterprises) have been con-sidered as explanations for this tendency to agglomerate in early stages. Once a technology matures, in contrast, it becomes standardised so that the industry can more easily disperse its activities. Figure 9: Technological and Cluster Life Cycles

Source: Menzel and Fornahl (2007:10)

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In practice, however, very few clusters follow a clear life cycle from emergence to decline, as their constituent firms are not bound to a certain technology. Instead, technologies are continuously developed further and technological portfolios are diversified according to market requirements (e.g. Rigby and Essletzbichler, 2006). Hence, the constituent firms of the cluster continue to profit from agglom-eration and interaction, even if the technology that caused the emer-gence of the cluster has long become standardised and dispersed. Empirical findings, however, show that the heterogeneity of the knowledge accessible in clusters has a tendency to decline over time. (Figure 10) Consequently, the evolution of technological diversity plays a key role in comprehensively understanding the possible paths of development in different clusters (Menzel/Fornahl, 2007).

By definition, clustered firms are not only spatially, but also techno-logically close to each other (Figure 11). The degree of technologi-cal diversity, however, can be quite different. In young industries clusters tend to be systemic “niches” in which fruitful collective learning takes place among actors with clearly distinct yet overlap-ping fields of knowledge (cf. Markard/Truffer, 2008). In many old industries, in contrast, the technological diversity of activities has decreased and is often fixed along value chains. Figure 10: The Evolution of the Heterogeneity of Knowledge in Clusters

Source: Menzel and Fornahl (2007:18)

Figure 11: Different Stages of Development in Clusters

Source: Menzel and Fornahl (2007:19, 34), modified

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Figure 11 clearly illustrates both the key determinants and important possible stages of development of a cluster.

In the emerging stage, the companies in the region are spatially and thematically too distant to mutually benefit from each other. Their fields of absorptive capacity, to be interpreted as their capacity to mutually interact based on cognitive proximity, overlap to a quite limited extent. Moreover, the number of companies in the cluster remains small. At this stage, fragmentation and the lack of mutual understanding constitute the main challenges. Often such a latent cluster has emerged based on activities of a focal institution (e.g. a university that spins off high-tech ventures). In technological terms, a cluster may therefore already be present for a number of years. Without support, however, a technology cluster may never develop beyond this stage and an economic cluster will not emerge.

In the growth stage, in contrast, the companies in the cluster move closer together in technological terms so that their capacity for mu-tual understanding (absorptive capacity) now easily allows the estab-lishment of a network of interactions between them. Moreover, new companies move to the cluster, thus decreasing the physical distance among the key players in the field. The technology has reached a degree of maturity that allows its commercialisation and first returns on investment – beyond technology indicators, a cluster becomes visible through the creation of employment and value added. At this stage, the need for external support is possibly most pronounced.

In the later stages, the main issue is whether an equilibrium between the necessary proximity and the need for heterogeneity can be main-tained. Moreover, it is beneficial when new companies locate in the cluster as well as when others follow their own paths, even if that eventually entails leaving the cluster. In a sustainable cluster, the population of enterprises and research institutions has a defined core but remains open for newcomers and tolerant with regard to firms that venture into new technological fields and leave the cluster.

This sensitive equilibrium, however, cannot be maintained in all cases. The example of heavy industries evokes images of clusters that are still held together by sunk costs, savings intransaction costs and possibly a pool of specialised labour but, in technological terms, have become isolated from other actors in their field. With regard to innovation, such a cluster has entered a barren stage and become trapped in a dead end. Eventually, it will become a decliningcluster under the pressure of globalised price competition and a liability to the region. Nonetheless, it may continue to exert substantial effects on many firms in the region for a considerable time. In statistical terms, therefore, it may appear more dominant than at the time when it was a thriving, small emerging niche, which is an important caveat to be placed on all interpretation of the statistics in Section III.

A second major caveat is that this general approach to explaining cluster evolution is based on the premise that cluster development starts based on technological development that were entirely new at the time that the cluster emerged. This assumption, however, cannot be made for many employment clusters. In an age of global division of labour along value chains it is not only possible, but often likely that a local cluster emerges in a field in which the cutting-edge tech-nological regions are located elsewhere. Other experts, such as En-right (2000) have therefore proposed classifications based on less restrictive assumptions. Those, however, remained mostly descrip-tive and thus unable to predict one likely path of development.The development options of such clusters and the question under which conditions they can catch up with the technological frontier are be-ing researched. So far, however, the results remain inconclusive.

Finally, it should be reflected if statistical clusters (Section III) are evidence of cluster development at all. In nationslagging behind technologically, statistical clustering tends to be caused by top aca-demic institutions and subsidiaries of large multinational firms. These, however, often tend to cooperate with partners from abroad rather than with domestic players who lack absorptive capacity.

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Development Stages of Cluster Support

Beyond those general theoretical considerations, however, it is im-portant to reflect on the development of the political support process that has in the past decade developed around the majority of Euro-pean clusters (cf. next section).

Certainly, the development of the support process is not independent of the overall process of cluster development. It can, however, only be considered parallel in the rare case in which the development of the cluster has, from its outset, been politically managed and sup-ported. In practice, however, most cluster policies are set up either after the emergence of a cluster, or to prompt the creation of a clus-ter. Against this background, care has to be taken when juxtaposing the development of a cluster as such and the support policies con-nected to it. Ultimately, a convergence between the two processes is not unlikely, yet far from automatic. Figure 12: The Development Process of Political Cluster Support

Source: European Commission, DG RTD (2008: 47)

In a 2008 publication, the European Commission (2008) distin-guishes the following key stages in the development process of po-litical support for a cluster:

• The pre-cluster-stage – during which the creation of a clus-ter is aimed at by building up a team and starting to engage stakeholders who may be interested in increasing their mu-tual interaction,

• The set-up stage – during which policy-makers aim to push the cluster from the latent to the growth stage; at this stage, collaboration needs to be intensified and first concrete pro-jects have to be initiated

• The growth stage – during which policy-makers aim to in-crease momentum in the development of the cluster and to involve actors in fields not yet covered, interaction has to be developed from loose contacts into tangible cooperations

• The endurance stage – during which policy-makers aim to maintain the sensitive equilibrium to keep a cluster sustain-able in the long run

• The decline/mutation stage – during which policy-makers aim to mitigate the effects of an ossification and decline that could not be prevented. This type of action, however, can in many regards no longer be considered cluster policy in the narrow sense.

Some more examples of concrete practical political action connected with those activities can be identified in Figure 12.

In summary, this section illustrated that the approaches to cluster policy can be different for good reasons, related to both the stage of development and the question whether the cluster emerged from a cutting-edge technological core or from an industrial agglomeration. Moreover, it demonstrated that multiple paths of development are possible and that there are no automatisms. In the following, this will be illustrated in some more detail by three selected case studies.

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In-Depth Case Study I: The Aerospace Cluster in the Toulouse Region

The current Aerospace Cluster in the Toulouse region is a classical cluster according to the development model, since its roots date back to the days when the industry was in its infancy. After having been by-passed by the early stages of the industrial revolution, its industrial growth has largely been based on the aerospace industries.

The foundation for the development of the industry in the region was laid in 1921 with the set-up of Dewoitine, the first aircraft company in the region. At the time, these first tiny developments could not have happened without increasing government contracts in the wake of WW I that were intentionally awarded to firms located at a safe distance from the geopolitical faultlines of the time. During the 1920s and the 1930s the company outpaced their national competitors with regard to technological developments and were able to capture many relevant military contracts of the time. It became nationalised in 1936.

Following WW II, the remaining production sites were reactivated. At the time, a first major improvement of the regional knowledge base was called for, to establish the state-owned firms in the emerging market for jet airliners in the 1950s and the 1960s, in which the local manufactur-ers initially had little experience. Only in the context of subsequent military contracts and later export-oriented production of war-jets were the key manufacturers able to acquire the necessary experience. During these restructuring periods, the cluster could only survive because com-pany mergers and national policies redistributed a number of extra-regional projects to the region.

Moreover, a sophisticated network of specialist suppliers is the key to the competitiveness of the final assembly firms in the industry. Around them, niche markets for R&D, design, manufacturing, finance and mar-keting have emerged. Without constant mutual interaction between the firms serving these markets, the value chain cannot function, even if the international and even extra-EU sourcing of supplies has become a con-stitutive element of the trade. In the Toulouse cluster, the absence of such networks was one of its major weaknesses in the years following

WW II. From the 1950s onwards, therefore, the French government took active action over a period of 15 years by means of targeted in-vestments, allocation of contracts, and the encouragement of mergers among small supplier companies.

In the 1960s, the technopole policy changed the French government’s attitude towards establishing academic capacities in the region. Throughout the first 50 years of its existence, there had been no local public research institutions with complementary capacities. In 1969, this changed with the set-up of the Office Nationale d’Etudes et de Re-cherches Aerospatiales (ONERA) – which today has more than 350 staff and more than 300 projects running in parallel. Moreover, the same year saw the relocation of the Grande École Sup’aero from Paris to Toulouse. Today it educates more than 120 PhD and more than 700 other students in aerospace-related topics. By means of this restructur-ing, the Toulouse cluster was provided with a regional source for a highly skilled workforce and connected to the international scientific communities of practice in the field of aerospace.

At a later stage, the Anglo-French Concorde project help to build the technological and managerial competences which enabled the major manufacturing company of the time, Sud Aviation, to substantially con-tribute to the foundation of Airbus Industries which was to become the motor of aerospace activities in the region for the coming decades. From the launch of the first A300 aircraft in 1972 to the 2008 launch of the double-level A380 aircraft, Airbus Industries has established itself as a stable presence in the world duopoly of aircraft production.

As this brief summary has shown, the aeronautics cluster in the Tou-louse region depended on the successes and suffered from the failures of the key firms in the region throughout its history, while the local an-choring of the value chain was not always easy to achieve.

In line with this, studies have argued that the standard spill-over and transaction cost arguments cannot explain clustering in the aerospace sector, but that the growth of the cluster must be seen as based on an-chor firms and the local pool of skilled labour associated with them.

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While this may be true for the emergence of a cluster, the Toulouse re-gion has developed far beyond the site of the Airbus headquarters. In the past two decades, it has become an international centre of aero-space-related supplier industries both French and foreign. Moreover, it is home to many firms in the electronics and IT sectors with roots in the field of aeronautics applications. The region is home to about 94,000 jobs in the aerospace industry and related services, provided by 1,300 establishments both public and private. Beyond Airbus Industries, the region is home to companies such as Alstom, Air France Industries, ATR, Dassault Aviation, EADS, Rockwell Collins, Roxel, Siemens VDO, SNPE, Snecma, Turbomeca, Zodiac and others that generate an overall annual turnover of € 10 bn. Regional firms are world market leaders for large-scale civil aircraft, business aircraft, gas turbines for helicopters, landing gear, aircraft batteries and European market leaders in avionics, satellites, solid propellant propulsion, tactical propulsion, military aircraft, high performance composites and atmospheric entry technologies. There are 8,500 researchers employed in company labs as well as in 80 specialised public research centres.

The key location for public research and training in the cluster remains the Aerospace Campus in Toulouse with the aviation schools ISAE (merger of Sup’aero and ENSICA) and ENAC, the universities Univer-sité Paul Sabatier, INSA, and INPT as well as additional laboratories at ONERA, CNRS, and CNES that employ over 1,000 researchers. Addi-tional facilities are found at the new aerospace research laboratory of the INRI in Bordeaux, a research centre adjacent to Turbomeca in Bordes for aerospace fuel research and an experimental centre in Tarbes that studies new ways of dismantling aircraft.

Since mid-2005 the Toulouse cluster has received additional support through the national poles de compétitivité programme as one of six global clusters. On the basis of substantial national funding, the French regions of Midi-Pyrénées and Aquitaine have formed the Aerospace Valley World Competitiveness Cluster which aims to support network-ing to better integrate design and manufacturing, products and services, as well as to enhance cooperation between the public and the private

sector. The initiative’s stated aim is to create 40,000 new jobs within the next 20 years. Since its inception in 2005, it has initiated some 220 research projects with a total budget of € 460 m, including € 204 m in government funding.

In 2010, the cluster association has 500 members including companies, research centres, education and training centres and authorities involved in the aerospace sector. It is organised in 7 theme-specific electoral col-leges (large groups, SMEs, education/training, research, economic de-velopment structures, local and regional authorities, professional or-ganisations and associated partners), the first four of which constitute the cluster’s project evaluation committee. The general assembly elects a Board of Directors of 33 administrators for a period of three years which in turn elects the president, the vicepresident, a secretary and a treasurer who during these three years run the daily business of the cluster association. Currently, the cluster organisation concentrates its efforts on 3 structur-ing projects and nine cooperation projects. Additionally, in 2009, it be-came a member of the European Aerospace Cluster Partnership which unites 31 relevant European cluster organisations in the field, including a second one from France: the Pôle Pégase. Sources: www.aerospace-valley.com; www.eacp-aero.eu Niosi, J., Zhegu, M. (2005): Aerospace Clusters: Local or Global Knowledge Spillovers?, Industry and Innovation 12(1), 1–25; Hickie, D. (2006): Knowledge and Competitiveness in the Aerospace Industry: The Cases of Toulouse, Seattle and North-West England. European Planning Studies 14(5), 697–716.

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In-Depth Case Study II: The Mechatronics Cluster in the Vallée de l’Arve

The beginnings of the emergence of the industrial district in the Vallée de l’Arve dates back to the early 18th century, i.e. at the beginning of the industrial revolution. At that time the region became a centre of the clock-making industry. As early as 1789, 115 clock- and watchmakers formed a first industrial district. In the early 20th century, the emergence of new industrial fields like cars and telecommunication as well as rais-ing military demand helped to mobilise traded capabilities in composite part production to create a vibrant regional cluster of machine tech-nologies. The cluster’s major period of growth, however, started in the wake of WWII. A 1968 study showed that only 4% of the current firm popula-tion had been in the area before 1944, whereas 44% of them had settled there from 1945-54. At the time, already, most companies in the sector were micro-firms which remains a basic characteristic of the cluster’s firm population up to today. During the oil crisis of 1973-74, the industry in the region suffered a first major backlash which was aggravated by increasing national com-petition due to the development of new production technologies and the rise of international competitors. The deterioration of the economic situation in the cluster until the early 1980s, however, prompted a major modernisation of equipment in the firms which in the end enabled many of them to recoverfinancially. Since the 1990s, the industrial district has been politically supported, with the aim to develop a diversified landscape of micro-firms held to-gether by a specialised labour pool into a ‘local production system’. The outcome of this support programme under the heading of ‘local production system’, however, did not yield the expected results. Although a certain territorial embeddedness and joint industrial culture was present since the early days of development in the industrial dis-trict, the local production system initiative failed to improve the overall degree of cooperative activities between the local firms.

Today, the mechatronics industry is one of the strongest industrial sec-tors in the department of Haute-Savoie. A total of more than 55,000 employees work in the sector and 50 leading firms in the field of mechatronics are located in the region. The Vallée de l’Arve region remains specialised in turning machine technologies and CNC applications. Of a total of 800 specialist firms in the field active in France, 500 are located in the Vallée de l’Arve clus-ter. Many of them are specialised market leaders in complex automated assembly and precision engineering. Their competences cover precision machining, mechatronics as well as process organisation. Conse-quently, the region still features a strong specialist labour pool in occu-pational fields like lathing, turning, surface treatment, new materials and microelectronics. Many of the region’s SMEs act as supplier firms for OEM in other sec-tors. For about 60%, the current target market is the automotive sector but they are actively diversifying into markets of the future, like aero-nautics, telecommunication and medical technologies. In July 2005, local stakeholders decided to set up a regional cluster ini-tiative, Arve Industries, which competed for and received the label of a pôle de compétitivité awarded by the national level CIADT Comité in-terministériel pour l'aménagement et le développement du terri-toire.Arve Industries could thus be counted amongthe top 71 French cluster initiatives at national level. The key challenge at the time was that the region was still characterised by an insufficiently networked population of small specialist suppliers. Moreover, larger firms which could serve as drivers of development or as focal points for self-sustaining regional networks did not exist in the region. Hence, the initiative set out with the triple ambition to (1) change the perception of the region as a supplier base to one that develops own products based on regional cooperations, (2) to create European level centres of expertise in precision machining (Intercut Lab) and mecha-tronics (Ciméo) as well as to (3) start innovation projects to enhance the regional firms’ competitiveness.

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The structure of the members involved in the cluster’s activities, how-ever, remains heterogeneous. Most activities involve enterprises, re-search institutes, and universities as well as public institutions. Beyond the member companies, 1,500 individual scientists, 28 public and 30 private research laboratories, 12 institutions of higher education, 14 public institutions as well as 12 municipalities are members in the clus-ter. The composition of the member firms reflects the structure of the local sector. 90% of the cluster initiative’s 291 private sector members are locally rooted SMEs connected by a common ’sectoral heritage’, i.e. shared practices and cognitive proximity, and a shared embedded-ness in their regional environment. About half of them are micro-firms. Since its foundation, the Arve Industries cluster was successful in initi-ating cooperations between enterprises that had not been in contact be-fore, as well as between public and private actors that had no history of mutual collaboration. A particular success factor in the process of bringing the regional players together following the inception of the cluster were the committed activities of an informal group of public actors. Currently, more than 120 projects are ongoing in the cluster, in which more than 50% of its members are involved. Moreover, cluster members apply for about 250 patents annually. The cluster initiatives activities are determined, mediated and driven by a number of public actors whorun the cluster’s daily operations. At the very beginning, the daily business of the cluster organisation was run by an informal group that had to rely on a single administrative em-ployee. Very soon, however, the increasing workload was too much for this group, prompting the setting up of Arve Industries Haute-Savoie Mont-Blanc as an incorporated association in early 2006. To gain access to more broadly based expertise and experiences, a Comité de direction was established to involve numerous local stake-holders from science, policy and industry. This process could substan-tially build on previous, trust-based relationships and shared values in the region. Arve Industriesthus provides a good example of how Mar-shallian structures may not be able to develop momentum on their own,

but still provide the basis for a vibrant cluster when complemented by public mediation. A major issue with regard to the day-to-day operation of the cluster ini-tiative is that most SMEs are structurally unable to substantially con-tribute to its activities, even if they highly appreciate the results of its efforts. Due to the high degree of dispersion of resources in the private sector this situation is unlikely to change in the foreseeable future, so that the existence of Arve Industries will continue to rest on the shoul-ders of its public promoters. At the moment, the largest share of fund-ing for the Arve Industries cluster initiative (65%) is contributed re-gionally by the Conseil Général de Haute-Savoie. Currently, Arve Industries is involved in nine partnerships with other French clusters (pôle de compétitivité), e.g. Axelera (environmental chemistry), Minalogic (micro-and nanotechnology) or Viaméca (me-chanical engineering). The most recent collaboration was established with the Mov’eo pôle de compétitivité (automotive and public transpor-tation) in April 2010. Sources: http://www.arve-industries.fr/ Bocquet, Rachel; Mothe, Caroline (2008): Quelle place pour les institutions pu-bliques locales dans la gouvernance des pôles de compétitivité à forte dominante PME? XLVème colloque ASRDLF. Houssel, Jean-Pierre; Gide, Christophe (1992): Le décolletage dans la vallée de l’Arve: un district industriel face à la mutation contemporaine. Revue de géographie de Lyon 67 (1), 199-208.

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In-Depth Case Study III: The Biotechnology Cluster Munich and the BioM –Biotech Cluster Development GmbH

Prompted by its success in the 1996 BioRegio competition organised by the Federal Ministry of Education and Research, the Munich bio-technologyregion has developed into one of the leading clusters within Europe. Today, Munich leads Germany as regards the num-ber of companies, employees and, most of all, the number of drugs in clinical development. Especially in the field of therapeutics and diagnostics, the region has become Germany's most important loca-tion. According to the Cluster Observatory, it ranks among the most "highly innovative" clusters in Europe. The central network co-ordinator for this cluster is BioM Biotech Cluster Development GmbH. It coordinates the activities of the Munich biotech region and of the Bavarian-wide cluster.

Since its inception, the region has developed key strengths in bio-pharmaceutical or 'health-related fields' of biotechnology ("red" bio-technology). This can be traced back to the cluster's origins which are found mainly within the Max Planck Institutes of Biochemistry, Neurobiology and Psychiatry and the Gene Centre of the Ludwig-Maximilians University of Munich (LMU), most of which are lo-cated in Martinsried, Munich. These were the key founding institutes where the first companies in the region (Morphosys AG with close links to the Max Planck Institute (MPI) for Biochemistry and Medi-Gene AG as a spin-off from the Munich Gene Centre) originated from. These institutions still strongly contribute to Munich's spin-off dynamics and pursue a clear medical focus. Also the presence of big pharmaceutical companies (GlaxoSmithKline GmbH & CoDG, No-vartis Consumer Health, Astellas Pharma GmbH) contributed to this focus. Furthermore, world-leading dedicated biotechnological firms such as the US pioneering firm Amgen settled their German research activities in the region.

Form a performance pointofview, more than 20,000 persons – in a broad consideration - are employed in more than 190 companies of the life science sector, of which two thirds are small and medium-sized biotech companies. In a narrow sense, Bavarian biotech SMEs employed 3,470 persons in 2007, 2,400 of whom work at the Mu-nich location. After some turbulence between 2002 and 2004, the Munich biotech cluster stabilised and its structures consolidated. The highest number of new firm foundations were realised at the end of the 1990s/beginning of the 2000s and in the mid-2000s, and the number of the companies remained comparatively constant, with a slightly decreasing trend between 2002 and 2006. With a view to the technological performance, the Munich biotech cluster ranks in sec-ond place in Germany, with 32 companies having patents granted in biotech (2006).

The federal and regional government plays an important role as re-gards the performance of the Munich biotech cluster. Until the mid 1990s, when the BioRegio-Contest (see below) – initiated by the Federal Ministry of Education and Research (BMBF) – was launched, biotechnology activities in Munich were primarily related to the public research facilities. Although a private profit-oriented biotechnology sector still existedat that time, a critical mass of firms was missing. Public support initiatives with the aim of "capacity building" in the private sector (e.g. attracting private investments, support start-up activities as well as research and innovation activi-ties) played and still play an essential role in the cluster formationto-day.

One of the lead organisations in the Munich Biotech-Clusters is an intermediary organisation called BioM. BioM is a service and consult-ing company whose aim is to promote the development of the Mu-nich Biotech Cluster as an internationally renowned centre of excel-lence in the field of innovative biotechnology. It is the first point of contact for biotech start-up companies seeking financial support or business advice. Through the BioM network which includes all im-

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portant players in the region (representatives from public offices, scientific institutions, venture capitalists and biotech companies), BioM assists Munich-based companies in finding the right contacts and partners. Part of an additional service offered by BioM is the or-ganisation of seminars and workshops on a broad range of topics relevant to the successful development of a biotech company. The young firms are also offered the possibility of participating in larger exhibitions, partnering conferences and other events.

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In-depth case study IV: The ICT cluster in Helsinki

Finland’s economy as a whole is heavily specialised in communication technologies (see Figure 18 and Figure 19) and has been a forerunner in this sector in nearly every respect: R&D spending, broadband, setting standards, growth, dynamics, services, structural change, coordinated policy, and intensive interaction between the actors of the system. In fact, in Finland every region could have been chosen to serve as good practice example. However, the communication technology cluster in Helsinki, which unites a 2 star cluster in employment with a 3 star technology cluster, home region of Nokia and centre of ICT production in Finland seems most worthwhile for an in-depth investigation.

The rise of the communication technology sector dates back to the late 19th and early 20th century. The local telephone network operation was never monopolised in Finland, leading to competition. In the 1930s there were more than 800 local telephone companies in Finland. The threat of nationalising the companies worked as a means of technical upgrading. In 1921, the private companies founded the Association of Telephone Companies, challenging the public telecommunications op-erator (PTO) which had the monopoly over long distance and interna-tional calls. Finnish telecommunications manufacturing was initiated around 1920 in three separate organisations (Salora, Suomen Kaape-litehdas (later Nokia) and Televa) that were merged under the manage-ment of Nokia in 1987.

The Nordic mobile telephone (NMT) network made the Nordic coun-tries the world's largest mobile market in the early 1980s and set the foundation for consumer-oriented mobile communications, finally, leading to deregulation and full liberalisation of the market in 1987 un-der the Telecommunications Service Act.

Nokia was and still is the driving force behind the Finish ICT cluster. In the Helsinki region the direct and indirect growth effects of Nokia are outstanding. The cluster as it is today was industry-driven right from

the beginning, but as a core sector has received certain political atten-tion.

Political support through science and technology policies began in the early 1960s and contributed to the expansion of the ICT sector through-out the following decades. The main target of these policies was the strengthening of the science and technology base of the industry. TEKES was established in 1982 to coordinate public R&D support and related efforts. Technology transfer, commercialization of research re-sults and later on cooperation between various agencies and enterprises enabled the emergence of complex ICT. Education programmes helped in adopting, diffusing and utilizing new technologies. The region of Helsinki, however, hardly has an explicit strategy to support the cluster. Policy measures are targetedtowards promoting the regional economy as a whole.

Cluster policy in Finland is mainly carried out by the national technol-ogy agency TEKES. So far 19 clusters have been supported, however not in the field of ICT (which is according to TEKES an opportunity in the future). Besides framework-setting activities, the ICT cluster of Helsinki is of a bottom-up nature with a strong coordinating industrial actor, namely Nokia.

Nevertheless, Helsinki hosts an ICT cluster of impressive size, driven by the major player Nokia dominating the cluster both in size and ef-fect. The company's domestic production accounted for about 45 per cent of the total cluster production value, while Nokia's share of cluster exports amounted to 70 per cent in 1999. Nokia and its close coopera-tion with suppliers, customers and research institutes as well as the re-lated leverage effects in the past are important drivers for the develop-ment of R&D dynamics of that sector in the whole of Finland. Early market liberalisation, a rich tradition in high-technology engineering and a favourable "network-friendly" culture are core features behind the cluster. Despite Nokia's leading role, the cluster is also made up of thousands of smaller firms, including 300 direct subcontractors of Nokia plus numerous indirect subcontractors. Additionally, leading

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multi-national companies such as Ericsson, IBM, Hewlett-Packard and Siemens have established R&D units in Finland.

According to the Cluster Observatory, the region of Helsinki employs more than 18,400 people in the communication sector and the ICT sec-tor has a share of 10 % in total employment in the region (compared to 5.5 % as national average). The sector is characterised by a high rate of exports and at the same time by strong innovation and patenting activi-ties. Helsinki also hosts many education facilities that provide ICT-oriented education for the region, especially the Helsinki University of Technology (HUT) is important in this respect. University education programmes for the sector are complemented by complementary pro-grammes from the eight different polytechnics in the Helsinki region. Especially offers from the Helsinki Polytechnic Stadiaand the EVTEK Institute of Technology are important for the cluster.

The cluster is also characterised by a high level of start-up activity, wit-nessing a high dynamic development of the sector, which is higher in Helsinki than in other parts of Finland. Helsinki has strong starter poli-cies which facilitate start-ups in the ICT sector. These facilities com-prise legal and administrative support and also access to networks of established firms in the region. The development of the support policies is left to the specialised organisation Culminatum. Its major goal is to promote transfer of technological innovation by increasing cooperation between the scientific community and companies, co-financing various projects and providing practical support for starting firms. Many spin-off companies have emerged from the Helsinki University of Technol-ogy.

This shows that the cluster does not solely rely on Nokia, although Nokia is the key player and constitutes an integrating element within the cluster. The close cooperation of Nokia with its suppliers (domestic or foreign), the intensive cooperation of firms with universities and pri-vate and public research institutes attests the vivid character of the clus-ter and the importance also of foreign, but also of smaller and start-up firms as actors in the cluster. The large pool of highly qualified ICT professionals in the region contributes to a sustainable development of

the cluster, as well as local ICT education at local universities to main-tain these competences.

Inter-firm relationships contributed to the development of the cluster. The limited scale of the national market contributed to that. Co-operations between firms and educational institutes are also numerous for education and the qualification of the work force, as well as for R&D projects. Finally, the ICT adoption by the population and among enterprises is comparatively high in all of Finland.

The liberalisation of capital markets and deregulation contributed to the success of the Helsinki ICT cluster,by releasing previously existing capital constraints, bringing technological advances in digitalisation technologies. Additionally, the promotion of a consumer-oriented de-velopment strategy of Nokia, together with brand building and an inte-gration of customer needs into products fostered the rise of the Helsinki region into an ICT cluster.

Within the ICT cluster of Helsinki, the Nokia Research Centre (NRC) serves as a link between basic industry research and product develop-ment. Inside and outside Nokia the NRC is known for an organisational culture which nurtures the innovative spirit and encourages individual initiative. The NRC manages and coordinates research cooperation and standardization for the company (also globally). The NRC promotes regionally (Helsinki and Tampere) oriented cooperative research pro-jects with academic research groups and thus contributes to the forma-tion and development of the cluster. Sources: http://research.nokia.com/ Hyytinen, A./Paija, L./Rouvinen, P./Ylä-Anttila, P. (2006): Finland's Emergence as a Global Information and Communications Technology Player: How revolutio-nary was the digital revolution?, 55-77; Paija, L. (2001): Finish ICT cluster in the digital economy. Helsinki: Taloustieto Oy; Steinbock, D. (2004): What next? Fin-nish ICT Cluster and Globalization. Helsinki: Ministry of the Interior Finland; van Winden, W./van der Meer, A./van den Berg, L. (2004): The development of ICT clusters in European cities: towards a typology, International Journal of Technol-ogy Management, 28, 356-387.

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Summary The case studies corroborate that many successful clusters have a long history, often dating back to the infancy of the technological field or industry that they are specialised in.

Moreover, many of them have a long history of ad-hoc as well as structural government support through policies programmes as well as – in many cases – targeted procurement.

A key finding from our in-depth cases studies, therefore, is that most cluster policies are building on path-dependent processes that have been running for a substantial period of time (Toulouse, Helsinki). Hence, it suggests that most cluster initiatives will inevitably have to develop an idiosyncratic set-up adapted to both the industry and the stage of development of the clusters they set out to support.

For example, the studies have shown that the involvement of public research organisations can be proactive (BioM) as well as reactive (Toulouse). Depending on the nature of the industry and the historic framework, both can be an adequate route towards a support struc-ture that ultimately involves the entire Triple Helix.

However, there are also some generalisable findings.

Hardly any of the clusters under study has developed without the impetus generated by at least some major players from the private sector. These firms have served as first focal points in inter-regional networks before the political support organisations came into being (Toulouse, Helsinki). Typically, the clusters are already in the emerging or even further stage, when public funding sets in. Hence a cluster initiative that is established in such an already developed cluster will have to build on existing network relations, leverage the involvement of existing key business actors and aim to complement them with additional capabilities, e.g. from the public sector. In

short, such an approach could be called developmen-t and perform-ance-oriented.

On the other hand, however, our in-depth studies revealed that some industrial district type regions may never develop beyond the stage of mere agglomerations of SMEs. While the specialised local pool of labour maintains the agglomeration, the SMEs lack financial re-sources to develop the networks and initiate the projects necessary to achieve systemic capabilities in the region (Vallée de l’Arve). In these cases, publicly funded cluster initiatives have a more basic role in that they have to start the process of transformation from a latent into an emerging or growing cluster. Such latency, however, need not exist in an existing network of innovative firms (Vallée de l’Arve). It can equally exist in academic capabilities that have to find applications in the business sector (BioM). In short, such an approach could be called initiation- and transformation-oriented.

In summary, it is evident that development- and performance-oriented initiatives can serve to further develop existing areas of strength. Similarly, it is evident that cluster initiatives cannot create new clusters if no potential is present at allin the respective field.

With regard to the many regions that rank in between, it is important not to misinterpret section IV on cluster development in such a way that would imply that all regions should simply focus on trying to attract investment in high-tech fields with the aim to establish a nu-cleus of crystallisation in a still youngtechnology field. In contrast, the case studies suggest that the occurrence of initial foci of agglom-eration is subject to co-incidences associated with a high level of un-certainty. The type of large-style pro-active procurement policies that in the past served to pin down nascent developments in certain regions (Toulouse) is now typically beyond the reach of innovation-oriented cluster policies. However, the analysis in section III demon-strates as well that there are a large number of field-specific agglom-erations in the EU which could be considered latent clusters (e.g. the

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1-2 star cases). It is in these cases that cluster initiatives can unlock substantial potential by breaking down bottlenecks caused by idio-syncratic obstacles to cluster development.

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V An Overview of European Cluster Policies While cluster policies have become common in many of the EU Member States and a possible subject of structural funding, it is dif-ficult to assess their actual spread and extent. In this section, there-fore, an attempt will be undertaken to take stock of cluster policies across Europe based on the data compiled under the framework of the European Cluster Observatory. While it provides a good first impression, however, the quality of the data accumulated in this source suffers from several drawbacks, based on the fact that its collection is mostly based on a “wiki”-principle which leaves open to the contributor how much informa-tion he/ she chooses to disclose. Consequently, the following as-sessments are inevitably based on incomplete information, although the data has been processed and data gaps have been closed by the authors to the best possible extent. A first overview of the number of cluster initiatives (Figure 13) sug-gests that the highest number of cluster initiatives at the regional level (or national initiatives implemented at the regional level) is to be found in Austria, France, Germany, Sweden and the UK. In these countries, up to 18 different cluster support measures are available in one region (although some are restricted to certain industrial sec-tors). In most other countries, in contrast, it appears to be more common to have one or a few cluster policies per region. Moreover, Figure 13 illustrates that national level cluster initiatives, particularly when set up to support clusters of excellence, do not re-sult in an even spread of actually supported clusters, but in a focus on certain regions in which applicants are able to fulfil the necessary criteria of excellence (cf. France, Germany, Sweden). Hence, the distribution of initiatives may in practice be more uneven than sug-gested as in cases other than initiatives of excellence Figure 13 the

mapping assumes that national level policies are counted as evenly accessible across regions. Figure 13: Number of Cluster Initiatives in European Regions

Note: “Excellence Cluster” refers to initiatives funded under the German Top Cluster Com-petition, the Swedish VINNVÄXT programme and the French pôles de compétitivité mondi-aux and pôles de compétitivité à vocation mondiale.

Source: based on Cluster Observatory Data; obviously false entries removed; additional entries added and differentiated into excellence clusters and normal clusters based on web searches.

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Based on the information available, however, the distribution of budget available for cluster initiatives deviates from the extent of local activities, apparently depending not on the number of initia-tives, but on the character of the cluster policy in the country in question (Figure 14).

For example, Italian and Portuguese regions appear to spend quite a bit on cluster policy in terms of direct monetary support while the number of actions in those countries is quite low (high amount of funding available for national “High Technology Poles” in Italy and “Collective Actions Support System”in Portugal). Likewise, the UK’s regions seem to be leading with regard to expenditure on clus-ter initiatives, although – or possibly perhaps – their activities appear to be more bundled than elsewhere. German and Austrian regions, on the other hand, which are among the leaders with regard to the number of initiatives, do not spend more than others (Figure 14).

Clearly, a centre periphery structure is visible which illustrates that southern and south-eastern Member States (with the notable excep-tion of Italy) do not spend significantly on cluster policy. Some cen-tral eastern European states, in contrast, seem to have leveraged sig-nificant funds for cluster policy (e.g. Czech Republic, Hungary).

Typically, national cluster programmes add to the means available at the regional level. Typically, significant amounts of funding are made available in the context of the clusters of excellence ap-proaches in France and Germany. They can, however, also be found in Portugal and Italy whereas Sweden appears to spend significantly less despite an existing clusters of excellence programme.

It has to be stressed at this point that the sheer amount of funding cannot be taken as an indicator of quality of the cluster policies in place – in most case not even for the effort put into such actions. As the case studies illustrated, much can be achieved with little more than funding for a few employees while large amounts of funding are not necessarily allocated in a suitable way.

Figure 14: Budget of Cluster Initiatives in European Regions (Incomplete)

Source: Based on Cluster Observatory Data; Obviously false entries removed; Additional entries added based on web searches. Budgetary figures for Poland reflect OP based struc-tural fund allocations under expenditure category 03 (yellow circles).

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Nonetheless, it is important to assess how much funding could be made available for cluster policy in a region if local policy-makers were to decide to increase their efforts in this direction.

Important information on this can be obtained from structural funds allocation, more precisely the planned allocations under expenditure Category 03 (technology transfer and cooperation) for the program-ming period 2007-13. Tellingly, a number of Operational Pro-grammes have been entered as cluster policies in the Cluster Obser-vatory. While this is an understanding not quite in line with the ac-tual purpose of the Observatory, it indicates that structural funding and cluster policies are perceived as intricately intertwined, particu-larly in some of the New Member States. Moreover, quite a number of cluster-based actions are co-financed from the structural funds in the old Member States, even though the local policy-makers tend to favour an understanding of cluster policy which is more independent of structural funding.

In summary, Figure 15 illustrates that a significant amount of Cat.03 structural funding is available in regions both peripheral and central. Other than could be expected, there is neither a unanimous concen-tration of allocations in the economically leading or the economi-cally lagging countries. Instead, countries with similar background conditions can spend quite different amounts (e.g. Spain, Portugal) and there is a high degree of regional differentiation (e.g. in Ger-many, France and the UK).

As a clear tendency, Cat.03 funding is relatively more important in competitiveness and employment rather than in convergence re-gions. Nonetheless, there is no homogeneity among those either. While some convergence regions in Portugal, Greece and certainly the Baltic states spend quite extensively under Cat.03, such funding is a lesser priority in regions of Spain, Romania and Bulgaria. Par-tially, Cat.03 allocations in those regions are well below those of other regions with a distinctively lower overall SF budget.

Figure 15: Structural Fund Allocations under Expenditure Category 03 which can be used to finance Cluster Initiatives

Source: Based on DG Regio Data for Allocation of Structural Fund Money

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VI Summary and Policy Conclusions Summary

In general terms, our analysis has shown that clusters are a diverse phenomenon and that the term clustering does not relate to one sin-gle but to many distinct but interconnected processes.

Our empirical findings demonstrate that some clusters are mere clus-ters of technological activity whereas others are mere clusters of employment. There is, however, a broad array of intermediate forms that in total are far more common than the extreme cases. Moreover, those clusters in which the overall intensity of clustering was found to be strongest very often feature a specialisation in both technologi-cal activities and employment (“combined clusters”).

Generally, our analysis shows that there are comparatively few strong clusters that can be considered dominant for the development of a region. Instead, a large number of weaker clusters in either pat-enting or employment were found, suggesting that most of them play their role in large and diverse regional economies. The distribution of activities, however, differs from field to field. Some fields are characterised by many weaker (e.g. instruments) while activities in others agglomerate in a small number of strong clusters (e.g. aero-space).

As expected, most purely technological clusters occur in the classic high-tech fields such as information technologies, communication technologies or biopharma. In more production-oriented fields such as the automotive sector, the picture is more diverse. In these cases, a clear differentiation can be made between combined technology and employment clusters at the core of the European Union and mere employment clusters resulting from key locations of produc-tion at the periphery. In most cases, moreover, the distribution of

clusters across the Member States follows these Member States’ known specialisation in certain technological fields.

With regard to the framework conditions against the background of which cluster policy has to be conducted, the key findings of this booklet can thus be summarised in three main points.

Firstly, clusters are diverse. Our study confirms that innovation is more concentrated than production and since value chains cross re-gional and national borders there is no automatic co-agglomeration of technological activities and employment at the regional level.

Secondly, the number of clusters that actually dominate a region is quite limited. Situations as in northern Finland with regard to com-munication or in southern Germany with regard to automotive tech-nology are quite specific and will remain an exception in every well-balanced economy. In most other regions, clusters remain a weaker, although no less relevant, element of the regional innovation system.

Thirdly, patterns of clustering differ by technological field. Case studies suggest that the patterns of cluster development also do so. Depending on the nature of activities, the inter-relations between technology and employment clusters, i.e. the frequency of occur-rence of combined clusters differs to a significant extent.

Finally, a number of field-specific case studies have revealed that European clusters are a very diverse phenomenon whose characteris-tics o differ strongly across, but also within fields. Some are centred around large MNEs, while others are constituted by an SME popula-tion with or without public research institutions as focal institutions. Many of them have in common that a relevant amount of employ-ment in the region depends on the sector. Moreover, the case studies reveal a surge in political support for clusters in the 2000s. The emergence of initiatives is particularly visible in those regions where a local cluster is notan immediatelyobvious object of economic pol-icy. In nearly every case the pattern of local interaction among the

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players seems to have changed since political support has set in. A common feature of this change is that the interactions between the public and the business research sector have improved.

Furthermore, in-depth case studies illustrated how clusters develop over time and that cluster policies face very different challenges de-pending on which phase of cluster development political support kicks in. In some cases a local initiative will have to sustain the growth of the local cluster and to develop the competitive perform-ance of the local firms. In others, initiatives will have to initiate the processes of networking that turn a mere agglomeration into a clus-ter and to transform existing patterns of interactions that result in bottlenecks which preclude any further growth in the cluster.

In synthesis with the empirical results presented in section III, this study thus finds that while the number of regions for which the first type of initiative can be useful is by nature quite limited (e.g. 3 star clusters), the second type of approach can be very useful even for those regions that do not count among the focal areas of activity in the respective technological field (e.g. 1 and 2 star cluster).

In line with this, our survey of cluster policies or initiatives in Europe indicates that cluster policy programmes have proliferated in many EU Member States, both in terms of the resulting number of cluster initiatives and in terms of budget allocation. The highest number of cluster initiatives at the regional and national level is to be found in Austria, France, Germany, Sweden and the UK. Some southern and south-eastern Member States, in contrast, do not spend significantly on cluster policy.However, it has to be stressed that the sheer amount of funding cannot be taken as an indicator of the im-pact of the cluster policies in place – as some of the case studies in this report illustrated.

The spatial distribution of initiatives, however, remains uneven. This applies particularly to those national cluster initiatives that stipulate a certain level of pre-existing excellence and are thus clear cases of

development- and performance-oriented policies (e.g. pôles de com-pétitivité in France, leading-edge clusters in Germany).

At the Community level, cluster policy initiatives have been devel-oped and implemented primarily to complement national and re-gional efforts in this policy field. Apart from cohesion policy, the facilitation of trans-regional and trans-national networking, presenta-tion and dissemination of information and good practice examples (foremost under PRO INNO Europe and Europe INNOVA) are among the most popular instruments used by the Commission to support clusters. However, in terms of budget, cohesion policy is the most important policy field in which the support of clusters is largely practiced. In the course of structural funds allocations (par-ticularly via ERDF), cluster policies play a significant role in a num-ber of Operational Programmes. Many of the cluster programmes under the convergence objective of the structural funds are relevant examples of initiation and transformation type policies.

In terms of relative importance, cluster-related activities have been found to play a larger role under the competitiveness and employ-ment than under the convergence objective. This is mostly due to the fact that convergence programmes follow a broader set of priori-ties.Hence, it does not mean that, in competitiveness and employ-ment regions, cluster policies were less important in absolute terms. Additionally, a lower relative importance of cluster policies in con-vergence regions is not universal. Some regions have allocated quite extensive budgets for cluster support while other spends far less.

In summary, the analysis of the distribution of cluster policy initia-tives and funding across Europe illustrates that significant disparities remain both between and within member states. Inevitably, the dis-tribution of clusters of excellence follows the regional availability of relevant potentials. Beyond these initiatives, however, the analysis clearly shows that the inclusion of cluster policy into the framework of structural funding has contributed to a more even availability of

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dedicated funding across the European Research Area. It has helped to spread activities to member states which had been less active in the field and has increased activities beyond the core regions.

Policy Conclusions

Recently, the European Cluster Memorandum has brought forward a number of recommendations to European policy-makers.

The authors of this booklet share the underlying assessments of the memorandum, in particular as our analyses are consistent with the assumption that “clusters emerge, where competition across regions enables companies to choose the location of their activities based on underlying economic efficiency, not in response to artificial barriers that influence cross-border trade and investment”.

Based on this ground-laying tenet, however, they are somewhat more critical about the message that “in modern competition, all clusters need to be innovation clusters”. Based on the empirical find-ings on the current situation, they would prefer the wording that “all European clusters need to be oriented towards innovation”, high-lighting that in an ERA characterised by disparities, not all clusters can sensibly attempt to reach the forefront of the global innovation process in the short run. They can, however, strive to connect with international networks of knowledge exchange and work towards improving their status in the international division of labour

Our in-depth case study-based analysis has shown that it cannot be meaningful for regions to compete in the attempt to capture the first locational focus of new technologies. Instead, it should the objective of cluster policies to build on the existing potentials of a region in the best possible way and to unlock dormant potentials.

Depending on the prior stage of the development of the cluster in question, different policy approaches can be meaningful to that end. While a cluster that is already well-developed will benefit most from a development- and performance-oriented policy, other clusters may

still need a more initiation- and transformation-oriented approach, which is ‘oriented towards innovation’ while it may not focus on high-end R&D activities as its prime objective.

Moreover, the findings of this booklet suggest that European policy makers are facing a double challenge:

Firstly, Europe needs to develop a number of strong innovation clus-ters in all technological fields, to better position itself in the global competition. Currently, such clusters are politically most supported from the national (rather than from the regional) level by means of development- and performance-oriented policy programmes involv-ing substantial budgets. In the long run, it would be desirable to achieve a certain degree of coordination between the different Mem-ber States’ policies in this field (e.g. German Spitzencluster, French Pôles de Compétitivité, Swedish VINNVÄXT).

Secondly, all other European clusters need to be tied into field-specific, mutually sourced network of knowledge exchange at a European level. As stated in the memorandum, “clusters reach their full economic potential if they are well connected to [...] clusters elsewhere”. In this field, Europe policy-makers have already launched a number of very useful trans-regional and trans-national and measures to improve the coordination.

Moreover, while “strengthening the potential of clusters [...] is a cen-tral task that regional and national governments are best placed to address” our survey confirmed that “in the sheer number of cluster policies and programmes, Europe is now among the most active re-gions in the world.”

Apparently, the current diversity of cluster policies in the European Union is such that integrating activities, or at least activities integrat-ing information at a European level, are clearly needed. It is of cru-cial importance to achieve the objective of cross-country coordina-tion and cooperation mentioned above. As in most fields there is

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enough critical mass in Europe to legitimise political support for more than one world level cluster, a coordination of the main na-tional strategies should not raise challenges irreconcilable with na-tional industrial policies.

In summary, the authors of this booklet support the proposition of the European Cluster Memorandum that it will be the key task of future European policies to “strengthen support for transnational co-operation” among the existing clusters (through initiatives like the European Aerospace Cluster Partnership), but also betweencluster policies, so as to remove obstacles that currently obstruct the con-centration of innovation activities in a number of leading world-class European clusters per field. To be able to do so, the European Union will need to “continue the development of neutral information on clusters, regional innovation capacity, cluster policies, and the eco-nomic prosperity of regions”.

As the European Cluster Memorandum rightly states “clusters are not the only answer to Europe’s innovation challenge, but they are part of the answer that Europe can ill afford to neglect”.

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Annex

Figure Annex 1: Employment Clusters Aerospace

Note: Based on Cluster Observatory Data; the majority of data points being from 2005

Source: Regional Key Figures

Figure Annex 2: Technology Clusters Aerospace

Note: Based on own calculations drawing on the EPO Worldwide Patent Statistical Database


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Figure Annex 3: Employment Clusters Automotive



Figure Annex 4: Technology Clusters Automotive



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Figure Annex 5: Employment Clusters Information Technology (IT)



Figure Annex 6: Technology Clusters Information Technology (IT)

Note:Based on own calculations drawing on the EPO Worldwide Patent Statistical Database


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Figure Annex 7: Employment Clusters Communication Technology



Figure Annex 8: Technology Clusters Communication Technology



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Figure Annex 9: Employment Clusters Medical Technologies



Figure Annex 10: Technology Clusters Medical Technologies



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Figure Annex 11: Employment Clusters Biopharma



Figure Annex 12: Technology Clusters Biopharma



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Figure Annex 13: Employment Clusters Chemical Technolo-gies



Figure Annex 14: Technology Clusters Chemical Technologies



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Figure Annex 15: Employment Clusters Instruments



Figure Annex 16: Technology Clusters Instruments



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Employment Combined Technology

To mitigate this problem, the additional step of adding the number of employment stars to the number of technological is taken resulting in an indicator of overall strength. In the map this is reflected by means of scaffolding applied to all cases with other than full cluster strength (i.e. 3 cluster stars or 6 for stars combined clusters).

To graphically combine the results of a Cluster Observatory Type cluster analysis with regard to both employment and technology di-mension is a challenging task. It is necessary

Please note that “cluster strength” is not equivalent to the overall extent of field-specific activity; the overall extent of activity can well be higher in non-specialised regions.

The first objective is achieved by subtracting the number of em-ployment stars from the number of technological stars, thus allowing us to identify the character of the specialisation. In the map this is displayed by means of colours.

In the maps presented in the following section, it has been our key aim to illustrate two main facts: firstly whether a cluster has a ten-dency to be more technology or more employment oriented, sec-ondly, how strong a cluster is, irrespective of its orientation.

This, however, (among others) still equalises cases with 1:1 stars to cases with 3:3 stars, even if cases with 0:0 stars are excluded.

Full strength Medium strength Weak strength

Full strength Medium strength Weak strength

The resulting pattern allows the reader to identify key clusters.

Example for Cluster assessed as “Mainly Employment”:

Example for Cluster assessed as “Mainly Technology”:

Methodological Note 1

European Commission

EUR 24200 — Identification of Knowledge-driven Clusters in the EU

Luxembourg: Publications Office of the European Union

2012 — II, 78 pp — 17.6 x 25 cm

ISBN 978-92-79-14289-5ISSN 1018-5593doi 10.2777/83735

How to obtain EU publications

Free publications:• viaEUBookshop(http://bookshop.europa.eu);• attheEuropeanUnion’srepresentationsordelegations.YoucanobtaintheircontactdetailsontheInternet(http://ec.europa.eu)orbysendingafaxto+3522929-42758.

Priced publications:• viaEUBookshop(http://bookshop.europa.eu).

Priced subscriptions (e.g. annual series of the Official Journal of the European Union and reports of cases before the Court of Justice of the European Union):• viaoneofthesalesagentsofthePublicationsOfficeoftheEuropeanUnion(http://publications.europa.eu/others/agents/index_en.htm).

The main objective of the booklet is to identify knowledge-driven clusters in the European Union in the main industries and technological fields. These are expected to play a significant role in the present and future technological capabilities of their respective countries and in the European Union as a whole and thus they are crucial in terms of competitiveness and employment. In general, the analysis shows that there are comparatively few regionally dominant knowledge-driven clusters.

Studies and reports

KI-NA-24-200-EN

-C

Documents

Identification of Knowledge-driven Clusters in the EU · Clusters within the Context of Transaction Cost Economics Transaction cost economics forms a major sector of New Institu-tional