1.Clusters, innovation, competitivenessand policyTCI Global Conference, Auckland, 29 November 2011Gran LindqvistCSC, Stockholm School of Economics

2. Four questionsWhat are clusters?How do clusters arise?What are the benefits of clusters?What need is there to support clusters?Lindqvist, TCI Global Conference, 29 Nov 20113 3. Lindqvist, TCI Global Conference, 29 Nov 201141What are clusters? 4. Lindqvist, TCI Global Conference, 29 Nov 20115Alfred MarshallPrinciples of Economics, 1890 5. Lindqvist, TCI Global Conference, 29 Nov 20116StaffordshirepotteryBuckinghamshirechairsBedfordshirestraw plaitingSheffieldcultery 6. Lindqvist, TCI Global Conference, 29 Nov 20117Giacomo Becattini Paul Krugman Michael Porter1990 7. What are clusters?Clusters are groups ofgeographically proximatefirms in related industriesand related institutionsLindqvist, TCI Global Conference, 29 Nov 20118 8. Lindqvist, TCI Global Conference, 29 Nov 201110 9. Lindqvist, TCI Global Conference, 29 Nov 201111SurfboardmakersSurfclothingSurfshopsFoam &fiberglassWaxChemicalsLocaluniversityOtherlocaleducationCompetitionsFestivalsSurf ClubsSurf SchoolsManu-facturingAssociationLobbyGroupsMuseumsSkateboardsandSnowboardsLocalsurfheroesMediaSource: HBS MOC student team 10. Lindqvist, TCI Global Conference, 29 Nov 201112FirmsResearchorganisationsEducationorganisationsGovernmentCapitalproviders 11. Lindqvist, TCI Global Conference, 29 Nov 2011132How do clusters arise? 12. How do clusters arise?Clusters are naturally occurring phenomenaThe grow out of seeds such as:o natural resourceso particular local demando acts of entrepreneurshipEvolution versus constructiono Most clusters have evolved spontaneouslyo Some clusters are built as acts of policyLindqvist, TCI Global Conference, 29 Nov 201114 13. Lindqvist, TCI Global Conference, 29 Nov 2011153What are the benefits ofclusters? 14. What are the benefits of clusters?MechanismsExternalities: when firms benefit from thepresence of other firms in ways they donthave to pay forAccess to highly specialised inputsKnowledge spill-oversLocal labour poolLindqvist, TCI Global Conference, 29 Nov 201116 15. What are the benefits of clusters?CompetitivenessIncreased innovationIncreased entrepreneurshipLindqvist, TCI Global Conference, 29 Nov 201117 16. Lindqvist, TCI Global Conference, 29 Nov 2011184What need is there tosupport clusters? 17. A cluster19Government ResearchorganisationsEducationorgansiationsCapitalprovidersCompaniesG. Lindqvist, 2011SSEMOC 18. 20Government ResearchorganisationsEducationorgansiationsCapitalprovidersCompaniesG. Lindqvist, 2011SSEMOCA cluster or isolated islands? 19. SSE MOC 2011 - Session 621G. Lindqvist, 2011StronginteractionWeak interaktionGood knowledgeDense networksCommon languageSimilar norms andattitudesShared visionHigh trustPositive incentivesPoor knowledgeSparse networksDifferent languagesDifferent norms andattitudesDifferent visionsLow trustNegative incentives 20. Reality is inefficiencies+ Knowledge failures+ Network failures+ Collaboration failures+ Coordination failures= Innovation failures22G. Lindqvist, 2011SSEMOC 21. The seven gaps of innovation2312345The researchgapThe education gapThe capital gapGovernment gapThe company-to-company gapG. Lindqvist, 2011SSEMOC 22. 6G. Lindqvist, 201124SSEMOCCluster-to-cluster gap 23. 7G. Lindqvist, 201125SSEMOCGlobal marketgap 24. ContactGran Lindqvist, PhDCenter for Strategy and CompetitivenessStocholm School of Economicswww.sse.edu/cscgoran.lindqvist@hhs.se+46 8 736952426 Lindqvist, TCI Global Conference, 29 Nov 2011