New practical approach to using clusters for creating regional innovation system

From the international experience we see that many countries, especially those that are new to the market economies, innovations, struggle to meet many challenges of the new world.

Everybody is willing to respond to new fashion of supporting innovations, research and development, attracting foreign direct investments, creating start-ups and, of course, launching cluster programs.

Working in different countries we noticed that many regional executives have challenges in putting all these “new trends” into one holistic approach, spending their valuable resources for separate cluster programs, foreign direct investment attraction programs, research and development financing and so on. And unfortunately very often these activities duplicate partly each other, or in some cases even worse, have even controversive aims and therefore the results are not impressive.

In response to this challenge we would like to offer the view on how to combine all these measures in joint vision by using cluster approach. There are already cases of region where this approach resulted into establishment of operating cluster programs or at least helped to understand “big picture” and create “joint vision”, which is the biggest step in regional development.

The approach is based on few elements as explained below, and methodology has been used in practice by InnoPraxis experts.

For economic growth regions need innovations and as for example, OECD concludes, innovations needed support in form of comprehensive innovation policy. Which in practice means active regional guiding, financing instruments and dedicated professionals.

But even understanding the role of innovations, only few countries or regions can afford to support wide range of sectors. Still many regions afraid to choose priorities, because this is high risk of making wrong choices. As result many sectors get individual little support that does not bring big results.
Proposed approach recommends to start with analyzing innovation potential and local sectors (which in future can become real clusters). The key success comes not only from identification of strongest clusters, but from analyzing synergies between them and identification of new clusters that connect existing clusters in the region.

Once a big picture is clear, cluster support measures should be aimed to develop linkages between clusters and innovation support activities should focus on the ideas generated on the overlapping areas of clusters. These areas will become spearhead sector that will drive cluster development. There are many good practical examples in the world.

Moreover cluster synergy areas can generate new ideas that become internationally successful companies because their strength is based on unique environment.

And at last, using cluster approach and understanding synergies between clusters create unique market positioning of the region in the world economy, which is easy to explain, draw and promote. Instead of trying to attract any kind of big brands to the region that will create some short-term working places, regions can focus their FDI activities and also can offer potential targets unique combination of clusters, where one can really benefit from locating close to each other.

Presentation of the approach has been done in September 2009 during the 12th TCI global conference, more details here.