Developing Innovative
Regional Clusters:
State of the Art
Philip Cooke
Centre for Advanced Studies
Cardiff University
Knowledge Economy
World Trade – High Tech 22%
- KIBS 50%
 Key Cities 60-70% Knowledge Exports
in UK, Italy & US
 Innovations/000 pop – US (SF, Boston,
NYC)
 Explanation -‘Spillovers’ from Metro
Agglomeration
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Cities & the Knowledge
Economy
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4 top US cities 400% more K intensive
In UK M4 200% more K intensive
Even east London (poorest part) above
UK average
E.g. Biosciences: Boston $1.1 billion
NIH; Munich 12,000 Life Scientists;
Heidelberg 13 spinouts per year
Clusters
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Two basic types
Porter ‘market’ led: Dalton (carpets)
Cooke ‘science’-based: Cambridge (bio)
Three variants in each
‘organic’ growth: Dalton/Cambridge
‘facilitated’ growth:Karlskrona/Oxford
‘induced’ growth: RTC/German Bioregio
What Do policy Makers Want?
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Carpets (organic/market) vulnerable to
competition from Developing Countries
Science-driven ‘organic’ good but small
and (in bio) scarcely profit generating
but good at ‘rent seeking’
Facilitated can be good, but slow – RTC
started in 1950s. BioRegios don’t have
much in the ‘pipeline’ (next slide)
European Biotechs, 2000
Source: Cap
Drugs in
Gemini Ernst & Pipeline
Young, 2000
Number of
firms
Number of
IPO Firms
UK
128
223
48
Denmark
28
61
5
Ireland
23
29
2
Switzerl’nd
20
116
2
France
19
173
8
Sweden
18
158
9
Italy
7
50
2
Germany
6
317
15
Finland
5
81
1
Neths
5
77
4
Some Success Stories
1. Galician Fashion Industry
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Market-driven, ‘Organic’: La Coruna
3W Competition Drives Upmarket
Regional (international) clustering
Producers Become Design Intensive
Integrate Design, Prod, Mktg – ‘Zara’
Outcompete Benetton, which VI’s
Zara 1991, K19 jobs, 2001, K33 jobs
2. Karlskrona, Sweden
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Naval Shipyards Close > ‘Facilitated’
Leadership: (Firm, College, City) ‘Triple
Helix’
Vision: TelecomCity
Cluster Drivers: Ericsson, Vodafone,
Sun, HP. 4,000 new jobs in the 1990s
Networking: TC Association
Social Environment: TC Youth Clubbing
3. Oxford Biotech (facilitated)
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Oxford BioTechNet (network: lawyers, patent
agents, accountants, consultants, bankers,
VCs etc). Fifty Core Biopharma firms.
Terms – Free or Low Cost Advice & Work
Mentoring – (1) Planning (BP, Fundraising,
In-licensing, Incorporation etc)
(2) Implementation (Systems,
Interim Management,
Outsourcing, Regulatory etc.)
(3) Growth Phase ( Fundraising,
Out-licensing, Marketing, supplyChain Management, etc.
Northern Ireland (Induced)
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‘IT Challenge’ accepted, ‘innovation system’
linkage
Nortel & Fujitsu R&D facilities create 1,000
jobs (public-funded FDI)
High Grade Human Capital Recruited from the
2 NI universities
QUBIS and UU incubators Specialise in
Software & Biotech
2 local VCs Subsidised - create Belfast cluster
200 telecom/internet software spinouts
4. Taiwan (ITRI) (Induced)
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Industrial Technology Research Institute
Diffuses knowledge to SME clusters (Taipei)
Mobile PCs lead, 1991 PPP consortium
Data Switches dominating for PC networks to
Ethernet standard 1992/3
IBM PowerPC emulated; Int. Proc. in 24 hrs.
R&D Alliances in Digital Communications &
Multimedia
New moves into 1.2 litre 4-valve auto engine
for China market.
Knowledge Economies & Cities
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Why So Few Cities?
Entrepreneurship-Growth-Investors (VCs)
Key Cities Concentrate Knowledge Managers
(‘symbolic analysts’)
‘Creative Class’ likes ‘Knowledge Cities’
(Richard Florida’s ‘Gay Index’ v ‘Easy Rider’
‘Hazard County’ & ‘Boss Hogg’)
Underperforming cities non-systemic in
knowledge management. ‘System failure’
Concluding Questions &
Answers
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Can knowledge-based cities be created? Yes,
with Leadership, Vision & Cluster Drivers
What are the Best Clusters? In a Knowledge
Economy- Science-based (or Knowledgeintensive)
What’s the Secret of Clusters? They Work in
Cities Due to Knowledge Spillovers
What are Knowledge Spillovers? Tips,
Contacts, Specialised Services, ‘Intelligence,
Insurance & Investment’ (The ‘3 I’s’)