Global Clusters of Innovation

Citation

Constantinos Choromides (2016), "Global Clusters of Innovation", International Journal of Entrepreneurial Behavior & Research, Vol. 22 No. 5, pp. 767-772. https://doi.org/10.1108/IJEBR-02-2016-0058

In the era of globalization, innovation and entrepreneurship are promoted as a catalyst for economic development and competitiveness of nations, regions and companies. This development heighten the need to cast a critical eye on the ways in which innovation and entrepreneurship, through the development and advancement of clusters of innovations (COI) are used as developmental tools in today’s globally competitive environment. These COI are significant drivers of value creation and function as models for economic expansion in both developed and developing countries.

In a stimulating and original book edited by Jerome Engel, a Senior Fellow and the founding Executive Director of the Lester Center for Entrepreneurship at the University of California, Berkeley key attributes of these innovation hubs using compelling case studies from around the world are explored extending the cluster theory literature. Although the existing literature has adequately served the practice of regional economic development for decades, the question of how it can be transferred and applied in a specific case still remains. The existing theoretical framework does not provide the ground for conceptualizing the concept of an industry cluster to the more intangible attributes of an innovation cluster.

The purpose of this accessible and comprehensive volume is to outline the genesis of COI around the world, identifying their common characteristics as well as their distinctive structures and attributes. This edited volume explores common traits of these clusters, such as mobility of resources, entrepreneurial process, global strategic perspective, alignment of interests and incentives, and global ties and bonds. The central thesis of the text is not to provide a comprehensive presentation and review of global COI and its best practices. Although Silicon Valley is considered as the most important case of a COI since it has been imitated, with varying degrees of success, throughout the world, however, it should not be considered as the only model, since its application is limited many economic systems around the world. The main thesis of the COI framework is to extract and make accessible those distinctive features with generalizable relevance from the Silicon Valley experience and the experience of other international innovation hubs, and explain to the reader the different ways under which innovation clusters are developed, how the various actors such as universities, local or national government or industry take the lead, supporting the COI process, as well as the common denominators that are increasingly tying the seemingly disparate innovation clusters around the world together in a global network of COI, while a comparison is made of the findings from the cases in order to draw out wider implications for our understanding of COI as a process.

The editor has succeeded in to synthesize the diverse theoretical perspectives of COI in the global economy, advancing our understanding of global COI, by identifying and discussing the gaps in the existing cluster theory, with practical how-to-do-it insights, which in all cases extended to a discussion of policy issues and implications, providing in-depth and insightful analysis at how cities, countries, a corporation, and a non-profit provide the elements necessary to stimulate explosive innovation. The diverge empirical cases by providing a story and evidence from European and North American, Latin American, Middle East, Asian viewpoints illustrate how the concepts under discussion are implemented. The book takes a new, novel approach in examining the reasons for the growth of the global innovation economy. The real strength of the book is that the cases are presented by active participants in each of the settings, including leading principals in developing or delivering the initiatives described in their home areas.

The book begins with a presentation of the COI framework authored by the editor that identifies the key elements that drive the innovation process and characterize an innovation cluster along with a reflective commentary of the concepts that motivated the compilation of the volume and a summary of the papers, followed by an analysis of the archetypal cluster, Silicon Valley, that quickly immerse the reader into the subject area. Moreover, examples of best practice in the cases are presented in the subsequent 13 chapters both in the individual firm and in the ecosystems, in which they reside, from diverse settings from around the world. In each region, the contributors focussed on a specific aspect of the economy that was either the target of innovation initiatives or emergent behavior that may be the outcome of government action. Some of the cases, like Silicon Valley, Munich, Barcelona and Tokyo can be characterized as highly evolved mature innovation clusters active in various industries, while other cases, like Belgium, Brazil and Israel, are focussed in a single industry or even in a single aspect of that industry, like in the case of Taiwan. Other, like the ones in Silicon Valley and in Munich, are located in large domestic markets, while others reside in smaller, export-dependent countries like Belgium, Israel and Taiwan. Cases are also drawn from regions like in the case of Barcelona, Belgium, China, Medellin and Munich where the principal supportive factors are strengthening, while in others, like in the case of Monterey and Medellin supportive structures are collapsing.

Chapter 2 provide evidence on how Silicon Valley developed through a long-lasting partnership between universities and the government, shedding light on the COI framework and the region’s profound achievement in creating new industries and robust venture capital resources. Chapter 3 explores the potential of a distinctly original university-driven effort to revive a formerly strong entrepreneurial cluster in Munich and encourage with the contribution of a private fund spillover effects out of the university by enabling high-tech start-ups that have potential impact beyond their geographic region. Chapter 4 provides an example of regional government intervention, describing the response of the region of Flanders to create a vibrant new ecosystem for the digital economy. The aim is to unravel the effects of government intervention on the acceleration of new venture creation and local capital formation, focussed in one specific industry sector. Chapter 5 moves on to provide illustrations and cases of building a multi sector COI, with focusses on ICT, media, energy, design and biotech, in the context of urban renewal in Barcelona.

Chapter 6 examines how London has established as a leading center for emerging new ventures and analyzes the elements of its ecosystem that are characteristic of a COI, describing the role played by the universities within the ecosystem, and their contribution to the startup community in London. Chapter 7 provides evidence and analyses how Israel has emerged as the most vibrant high-technology cluster outside the USA. Chapter 8 examines the challenges facing Japan in recovering from two decades of economic depression, and the recent role of the national universities intervention in addressing the entrepreneurial gap and in promoting technology commercialization and innovation. Chapter 9 examines how Taiwan has successfully built a technology-driven economy, by developing a personal computer and semiconductor innovation cluster that evolved through its participation in the global network of COI into a super COI.

The next three chapters explore and discuss the challenges of building an innovation economy in adverse environments. Public and private sector leaders in developing countries increasingly recognize the importance of innovation and entrepreneurship in promoting economic growth. Nevertheless, developing countries face significant institutional challenges for the development of entrepreneurial companies and COI. These challenges relate to finance, infrastructure, human capital, innovation systems, the regulatory environment, as well as cultural barriers to entrepreneurship. As a result of these institutional constraints, developing countries often struggle to create the types of entrepreneurial and innovation ecosystems found in many industrialized nations, and particularly to create COI, which are characterized by mobility of assets and entrepreneurial dynamism.

Chapter 10 explores how China has emerged as an economic power, and the profound challenges that remain in enabling cooperation between large state-supported businesses and newer more innovative private companies, and in allowing entrepreneurs the opportunity to prosper and participate in helping build COI. Chapter 11 using evidence from Latin America provides two examples (Monterey in Mexico and Medellin in Colombia) where local government initiatives have gained ground in prevailing over fundamental flaws in the underlying economic and cultural conditions, successfully reviving former industries to new industries that leverage knowledge economies instead of the historic industrial base.

Chapter 12 details how two regions in Brazil, Recife and Minas Gerais, have relied on local government initiatives, establishing partnership between universities and the local government delivering solutions focussed on the local context rather than trying to imitate Silicon Valley, to overcome critical gaps in the national ecosystem and succeeded in developing a thriving technology cluster. In order to reflect on the importance of governance and coordination as one of the actors supporting the COI process the chapter also discuss the Minas Gerais cluster case where weaker cluster governance hindered addressing gaps in the ecosystem of its established biotech and emerging IT clusters. Chapters 13 and 14 examine two very different organizations, Intel and the National Collegiate Innovators and Inventors Alliance, a US-based non-profit organization, whose purpose and focus in the framework of COI is quite similar; to promote the diffusion of best practice in entrepreneurship and innovation on a global scale, building cross-national communities of innovators that are so important in building global networks of COI.

The final chapter seeks to bring together the lessons from the earlier chapters probing on the contribution of trans-regional organizations as cross-border disseminators of best practices in entrepreneurship and innovation. In the final chapter of this volume, the editor contextualizes the key insights from the various cases, and maps them onto the global COI framework. In many ways the chapters are complimentary and useful not only to professionals, entrepreneurs, policy makers, government officials and researchers interested in promoting regional development and innovation clusters in their local contexts but also to non-experts and students who are keen on understanding the strategic dimensions of innovation with reference to the contexts of how these clusters emerge, the role of governments, academic, corporations, investors and the individual entrepreneur, and the distinctive systemic features that contribute to the promotion and enhancement of the innovation potential in these regions. Exploring the concept of COI and the networks they form helps define the scope and patterns of innovation, diffusion of technology, international market expansion and resource acquisition and exploitation, including why rapid innovation and globalization patterns are evident in certain business clusters and not others. The evidence will result in a better understanding of the complex and diverse global entrepreneurial network and its inter-relationships and inter-dependencies, ultimately resulting in more informed and effective public policy, opportunity creation and resource management.

Although it is my understanding that there was a conscious choice by the authors not to overburden the text with numerous references, I feel that some of the chapters (4, 7, and 8) were short on referencing. Given the scope of the material and the targeted audience the text is aimed at, this seems not to be a significant weakness. The overall structure of the book and the organization of material within chapters are well thought out with the editor skillfully blending empirical material from diverse sources into an easily readable holistic account of the global COI. By doing so, the editor assist to a great extent the reader to understand the economic drivers, the growing importance of non-geographic specific factors, the rationale behind existing policy initiatives, the underlying influences that determine the characteristics of innovation hubs, the challenges of sustaining their growth and survival in an era of globalization and how top-down government and institutional action and bottom-up emergent behavior by entrepreneurs and investors can meet and overcome these challenges.