The Dynamics of Innovation Clusters: A Study of the Food Industry

Citation

Harding, S. (2004), "The Dynamics of Innovation Clusters: A Study of the Food Industry", Journal of Small Business and Enterprise Development, Vol. 11 No. 2, pp. 267-269. https://doi.org/10.1108/14626000410537236

The development of clusters as a key aspect for national and regional policy, as well as for new ideas on the future of supply chains, makes this contribution very timely.

The focus of the book is on a specific case, the food industry, but the way in which the authors develop their argument makes for a wider readership and applicability for those supporting cluster development in terms of economic policy.

The authors begin by reviewing clusters in general terms, progress to examining the nature of success factors, the specific example of value‐add in the food industry and then describe three in‐depth cases. The cases provide evidence for an analysis of cluster behaviour and the nature of chaos theory relating to innovation in clusters.

This is therefore, a stimulating read for those seeking to gain an understanding of the literature on clusters and the use of longitudinal cases provides a welcome addition to the body of knowledge, testing theories in the field. It suggests that Porterian ideas on clusters still represent the basis on which further analysis can be best built. Additionally, there is a good description of methods for evaluating clusters based on Enright's characteristics.

In terms of the application of the cluster concept to food production the authors take some time in chapter 4 to discuss the nature of higher value added goods in terms of food and health as well as risk.

This chapter is a useful background to the non‐food specialist in that it gives context to the case study firms and their marketplace. The authors argue that in terms of higher value add in the context of food, consumers seek to avoid risk in what they consume and that they also seek to eat healthily. At times though, healthy food may also cause risk in other ways and risk avoidance may lead to ambivalence in buyer behaviour. It makes the point that higher value add is closely tied to consumer perceptions of need and/or worth.

Perceptions of value add as a subject is a good topic for further exploration. Generally, it also highlights the need for an understanding in terms of what exactly constitutes higher value add in a cluster rather than assuming this as a “given”. This is a point well worth making for all clusters seeking to position themselves in higher value add chains. The Oresund Food Cluster is located in Denmark and Scania in Southern Sweden. The three cases are taken from this area and the cluster as a whole is compared against international competition, concluding that the Oresund food cluster “contains all the essential qualities needed for … innovation activity” particularly in relation to supporting industries and in intermediary support organisations to help R&D.

The cases are Provira, which developed an oatmeal based food for patients after abdominal surgery which helps keep the intestines functioning, Oatly, which utilises oats as a nonmilk based alternative to dairy milk to support milk (lactose) intolerant consumers and thirdly that of Mona Carota, a carrot based juice grown locally with good flavour and long shelf life without the use of additives.

The cases lead the authors to strongly suggest that “innovations grow – they are not assembled” (p. 175). The emphasis on organic growth and unplanned connections is a key indicator for the authors.

The use of chaos theory characteristics in terms of innovation in clusters (Brown and Eisenhardt, 1998) and within the cases leads to a strengthening of the need to focus on the environment where the new ideas are developed. Starting points, Order, “missing Links”, role models and reinterpretation are described in the context of the cases together with the conclusion that within the companies different leaders from the organisations emerge at each of the stages. This again strongly suggests clusters need to support an environment rich in potential for people to see possible connections and then have the ability to interact to make the developments happen.

In the Oatly case as presented there were three individuals at the stages of fluidity, transition and specificity, leading the authors to conclude, “the strategic leadership changed in the three phases of the innovation project” (p. 183). Three phases of innovation incorporating product and process innovation are also described (utilising Utterback, 1994) the Fluid Phase, the Transitional Phase and Specific Phase. A key point the authors feel is “perhaps to identify… the differences between innovation and product development” which reinforces the point on specific company roles to champion change in the cluster.

The longitudinal case study approach also means that the authors can begin to better understand the dynamics of innovation within companies and clusters. For example, characteristics necessary to encourage creativity are considered in the cases (alignment, self‐initiated activity, serendipity, diverse stimuli and within‐company communication taken from Robinson and Stern, 1997). These are introduced early in the book then returned to in the conclusions for EU policy suggesting a less structured approach with support for smaller consortia may also need to be encouraged to support innovation in clusters. This view incorporates pure research – research not specific to a company – development of cereals in general in the Cerealia case for example.

The authors then use chaos theory to further illustrate this difference from the SME perspective when realised in the cluster or larger firm. This adds to the point on a critical mass of innovation characteristics, which spark innovation within the cluster and can also be responsive to external change from the global environment. The authors suggest that the starting point for innovation can best be supported by a cluster with access to local know how, where there is a good intermingling of skills and people who can fill the specific roles in the process. Leadership in these roles is also critical to take the idea to the next stage of development and this is reflected explicitly in all three case studies.

In terms of layout, the authors provide useful bullet points in the text at the end of key sections, which act as key issues for the reader and enable the thread of the argument to be followed.

Overall, the book provides specific insights into firm development in terms of the difference between innovation and new product development, chaos theory and roles in companies at distinct stages of product and process development. It would have been useful to also focus on the interactions between companies in this respect, as this dynamic needs to be better understood, but this should not detract from the overall view that “The Dynamics of Innovation Clusters” is an excellent addition to the literature on innovation practice.