EURIS: Innovating Regions in Europe

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EU-RIS Innovating Regions in Europe

• June 17-18, 2002
• Stratford-upon-Avon
• Stuart Rosenfeld
• Regional Technology Strategies

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Clusters are economic ecosystems, not membership
organizations

• Rule of Thumb 1 Select clusters based on
  systemic relationships that provide market
  advantage

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The Dynamics of Clusters

• Flows of Leads to
• Information Greater knowledge of markets,
  labor markets, technologies.
• Ideas Diffusion of improvement, innovation
• People Increased experience, career
  ladders,
• Goods More efficient value-added chains
• Services Expanded expertise, choices
• Capital Support for modernization, startups

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Critical mass attracts external economies,
cooperation creates external economies

• Rule of Thumb 2 The minimum firm density
  necessary is what will produce external economies

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Hard External Economies

• Externality gt Benefit
• Supply chains gt efficiency
• Specialized labor gt productivity
• Specialized services gt access
• More choice gt costs, quality
• Range of firms gt joint ventures

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Soft External Economies

• Externality gt Benefit
• Association gt Vision, planning, influence
• Trust gt Networking
• Learning (1) gt Tech transfer, innovation
• Learning (2) gt Know how
• Informal LaborMarkets gt Career ladders

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Boundaries of clusters are determined by members
--and are not constraining

• Rule of Thumb 3 Boundaries are set by distances
  people will travel to work, associate, and network

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Clusters have life cycles

• Rule of Thumb 4 Stages of development of a
  cluster shape its needs and interests.
• - Embryonic
• - Growth
• - Mature
• - Decaying

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Success Factors

• Concepts - Innovation - Imitation and
  competition - Entrepreneurship
• Connections - Networks and networking -
  Connections and intermediaries
• Competencies - Specialized labor force -
  Industry leaders - Talent - Knowledge

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Cities of Ideas

• More likely to try anything once
• More optimistic
• Higher interest in politics
• More artists, musicians, writers
• Wages 30 above average
• Church attendance decreasing
• Club membership decreasing more
• More interested in other cultures, places
• More likely to engage in individualistic
  activities (Robert Cushing)

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Common Concerns

• Can regions create clusters?
• Is there a risk of being too specialized?
• Do clusters constitute favoritism?
• Are firms too competitive to cooperate?
• Is a rural cluster an oxymoron?
• Will Internet negate proximity advantage?
• Do clusters serve low income people/places?
• Do decaying clusters have an afterlife?

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Origins of Clusters
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Actions for Regions

• For understanding economies
• For engaging industry
• For organizing and delivering services
• For building a specialized labor force
• For stimulating innovation entrepreneurship
• For marketing the region and state
• For allocating resources and investments

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Understanding Regional Economies

• Identify clusters- measures of scale
  concentration- local views and intelligence-
  Inventory assets
• Map and model systemic relationships-
  competitiveness factors- supply chains-
  knowledge chains
• Benchmark against competitors

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US Cluster Basis
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Benchmarks for Clusters

• RD capacity Work force skills
• Education training Proximity to suppliers
• Capital availability Specialized services
• Tool builders/software Social capital
• Entrepreneurship Innovation/imitation
• Market leaders Specialized services
• External connections Vision and leadership

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Measures of Innovation

• Number of patents
• Investments in equipment
• Investments in RD
• Number of knowledge workers
• Number of scientists, engineers, technicians

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Actions for engagement

• Establish and recognize cluster organizations
• Formalize communications channels
• Facilitate networks

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Cluster Organizations

• Arizona Optics Industry Association
• CIT.MS (Comm. and Information Tech)
• Connecticut Plastics Council
• Upper Austria Diesel Technology Cluster
• Rhode Island Plastics Partnership Council

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Legsource.com(Hosiery Cluster)

• Industry communication infrastructure
• Maintain company database
• Assist firms in website development
• Search for new business opportunities
• Government procurement assistance
• Video conferencing technology
• e-commerce assistance to suppliers

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Response to a Technical Knitting Question (From
Glenn _at_ Top Gun Hosiery)

• Question We are having yarn tails protruding
  from the sock where the yarn feeder changes take
  place our KnitBetter knitting machines. Does
  anyone have a solution for this problem?
• Response from Tim _at_ Big Mill
• Machine Supplier has a new 2 feed tail attachment
  that we have used to help with the problem.
  tim_at_bigmill.com
• Response from Eric _at_ Machine Supplier
• We offer a 2 feed tail attachment that can be
  added to the 2nd feed to address the yarn tail
  ends. Please contact me at eric_at_machinesupplier.co
  m for more details

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Networks and Clusters

• Clusters grow
• Networks are constructed
• Clusters require no cooperation
• Networks require cooperation
• Clusters attract external economies
  Networks generate external economies
  Clusters are systems Networks are
  alliances

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Connecticut Plastics Council From Network to
Cluster

• 1993 Six companies in Naugatuck Valley
  approached by industrial services
• 1994 500,000 state grant
• 1996 Hartford seminar
• 1997 Growth to 48 members along Route 8
  corridor, become Connecticut Plastics Council
• 1997 Incorporated as 501c3
• 2001 Officially launched by state as cluster

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Actions for organizing and delivering services

• Collect and disseminate info. by cluster
• Establish one-stop cluster hubs
• Form cross agency cluster teams
• Facilitate external connections

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External Linkages are Crucial

• Prevent lock-in
• Source of inspiration, innovation
• Benchmarking
• Potential markets/customers

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Actions for stimulating innovation and
entrepreneurship

• Invest in innovations and start ups
• Support cluster based incubators
• Facilitate entrepreneur networks
• Form innovation networks
• Build technology cluster hubs

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Examples of Technology Centres

• Ireland
• Sligo IT - Toolmaking Research
• Cork IT - Clean Technology Centre
• Limerick IT - CAD/CAM Training Design
• Valencia, Spain
• Ibi - Toys (1985)
• Alco - Textiles (1985)
• Valencia -Plastics ( 1990)
• Benicrio - Furniture (1984)

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Actions for Building Cluster Workforce

• Qualify specialized labor force
• Use clusters as context for learning
• Establish cluster skills centers
• Form partnerships between education clusters
• Support regional skills alliances
• Create inter-regional cluster alliances

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College Cluster Hubs

• Staff experienced in cluster
• Develops improves curricula
• Engages and works with cluster leaders
• Technology and market scanning
• Maintains contacts with other regions
• Brokers specialized services
• Conducts needs assessments, research
• Organizes forums, workshops, study tours

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British Centers of Vocational Excellence (70)
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Hosiery Technology Center at Catawba Valley
Community College

• Trains entry level workers and technicians
• Trains management and customers
• Brokers networks
• Provides testing facility
• Demonstrates new equipment
• Maintains web site for jobs, market opportunities

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Galway-Mayo IT Furniture College at Letterfrack

• Programs in furniture production and management
• Hosts furniture technology center
• Supports new enterprise development
• Focuses on design
• Seminars for industry

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Multi-Institutional Innovation and Learning
Exchanges

• Networks of 6 to 10 community colleges with
  common interests or problems that agree to work
  collectively toward innovative solutions and
  improved methods by sharing development,
  approaches, and/or experiences.

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Actions for marketing and branding clusters

• Target inward investment
• Promote clusters
• Form export networks
• Look for opportunities to brand regions and/or
  clusters

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Silicon Valley Silicon Alley
Silicon Glen Silicon Fen
Silicon Forest Silicon BeachSilicon
Ditch Silicon Bog
Silicon Tundra Silicon Sandbar
Silicon Parkway Silicon Polder
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Actions for Allocating Resources and Investments

• Incentives or set asides for multi-firm cluster
  project
• Invest in cluster RD
• Fund critical foundation factors

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Examples of Technology Centers

• Ohios Edison Centers
• New Yorks Center for Adv.Technology and Regional
  Technology Dev Centers
• Valencia Technology Centers
• ERVET
• Irelands Technology Centres (Forfás)

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www.rtsinc.org

• Stuart A. Rosenfeld
• Regional Technology Strategies, Inc.
• 205 Lloyd St., Suite 210
• Carborro, NC 27510, USA
• 919 933-6699
• rosenfeld_at_rtsinc.org