Svein Erik Moen and Olav R. Spilling
October 25, 2012
Path evolution: The case of a national
programme for stimulating the development
of regional clusters
NORSI course on
«Innovation Systems, Clusters and Innovation Policy»
Path evolution: The case of a national programme for
stimulating the development of regional clusters
Structure
Cluster programmes in Norway
The Arena Programme
Framework for analysing path evolution
Cases:
1. Fish farming technology
2. Health and welfare technology
3. Information security technology
Classification of all Arena projects
Reflection around the role of the Arena Programme
2
Cluster programmes in Norway
Norwegian Centres of Expertise (NCE)
Addressing clusters consisting of world class enterprises in their
field.
12 clusters representing well established and well performing
networks of firms with a significant potential for further
development
The ARENA Programme
Addressing groups and networks of firms not yet developed as
clusters, but with a potential to do so
Currently 28 projects operating, representing at variety of
emerging cluster
3
Mostly based on well
established industries,
technology oriented, with
a long history, but partly
moving into new areas.
One addressing the
tourism industry
Three projects addressing
‘new’ technological fields:
- Instrumentation
- Culinology
- Energy Trading
Arena June 2012
The Arena Programme
A business cluster programme which offers financial and advisory support
for the organisations and strategic development of potential (regional)
business clusters.
– 70 projects have so far been supported (2002-2012)
A variety of sectors and technologies:
– Offshore,
– Aquaculture
– Materials science
– ICT sectors
– Environmentally friendly technologies
– Electric mobility technology
– Pharmaceutical technology, health and welfare technology
– Water technology
– Tourism, cultural industries, events
– Media technology
Endres i topp-/bunntekst
01-02-03
6
The Arena Programme (cont.)
Main goal: Strengthen the regional business environment’s capability
for innovation and value creation
Addressing groups or networks of businesses with a potential for
developing as clusters and increased value creation.
The groups should be based on collaboration between companies
and knowledge institutions (universities/research institutes)
The programme is stimulating new and untraditional combinations of
networks of actors
Based on annual calls, the most promising business groups are
invited to participate in the programme for three years
The programme is organised in collaboration between the tree main
innovation agencies (IN, SIVA and RCN)
7
Two what extent do the Arena projects contribute to
innovation in the Norwegian economy?
How can we determine the degree of novelty and innovation
potential of the Arena clusters?
Secondary data:
Evaluation reports of the programme as a whole
Plans and annual reports for the individual projects
Evaluation reports for finished projects
In addition:
Discussions with the program managers
Endres i topp-/bunntekst
01-02-03
8
The path evolution framework:
What is ‘new’?
Marginal changes
The development
goes on mostly based
on business as usual
Radical changes
Emergence of completely
new industries and
technologies not related
to existing industries
Three forms of path evolution
1. Path extension: Further development of existing industries and
clusters based on existing technologies and knowledge bases.
2. Path renewal: Development based on existing industries and
cluster, but in related areas (branching).
3. Path creation: Development based on new technologies and
new organisations in new industries.
(Based on Tödtling and Trippl 2011; Aasheim et al; 2012)
9
The path evolution framework: Key factors
We apply the following factors for determining the relative novelty of
an emerging business cluster:
– Actors and networks (what type of actors are involved?)
– Value chains (producers, users and suppliers of products and
services)
– Activities (what kind og activities are organised in the new
cluster)
– Products/services (new or traditional?)
– Markets (new or existing?)
– Technologies and knowledge bases
10
The path evolution framework: Categories
Path extension:
- Upgrading or revitalisation of the businesses
- Limited elements of novelty as a strategy for maintaining competitiveness
- Building on well-known technologies and knowledge in mature or established
sectors in the national system.
Path renewal
- New development of business activities in areas related to the existing
industries and cluster,
- The knowledge base does not change radically, but is developed towards
areas of relevance to the new development
- In the long run, changes of path renewal may become substantial for the
national innovation system.
Path creation
- The project represent a potentially new industrial path
- New industries based on new technologies and new organisations are
emerging,
- A new knowledge base is gradually developing.
11
Case 1: Fish farming technology
Actors and
networks
Activities
Products/
services
Technologies
and
knowledge
Market
Value chain
Established actors in a traditional industry
Well established relations between firms, R&D institutes
and universities.
Technological development and increased innovation
collaboration between the actors in the existing value chain
Technologies for sustainable fish farming
Traditional fish farming technology in combination with new
technologies and knowledge about sustainability
The existing market for fish farming technology
Developed during the 1970s, is now well established
Classification Path extension.
Most of the factors are already well developed and
integrated parts of the national innovation system.
12
Case 2: Health and welfare technology
Actors and
networks
Activities
Products/
services
Technologies
and
knowledge
Market
Value chain
Classification
Partly new constellation of actors (industrial actors;
consultancies, public sector (hospital), university college)
Some of the actors with little or no sector specific experience.
Collaboration in network activities focused on research,
development and sale of welfare technologies.
Building up a new marketing and sales organisation
New products and solutions (technological assistance) for the
health sector
Knowledge about health care and welfare technologies
(assistive technologies, ICT systems and medical technology)
Growing (new?) market for health care technologies in the
public and private market (home and community care)
Partly old and new value chain
Path renewal.
Some factors are new, but they represent branching from an
existing industrial path into new industries.
13
Case 3: Information security technology
Actors and
networks
Activities
New constellation of actors:
Suppliers of products and services within information security ;
R&D-institutes; University college
The creation of a national network for information security.
Competence building, R&D and technological development
Collaboration in a new industrial area. Increase public
awareness of information security
Stimulate start-ups in the area
Nes ICT-based solutions for the information security sector
Products/
services
Technologies Partly existing knowledge developed at military research labs in
and
combination with new knowledge and ICT
knowledge
Market
New and emerging market for information security within the
ICT-sector
Value chain
Potential for developing a new value chain
Classification Path creation.
Potentially a new industry based on new value chains
14
Summary of cases
Actors and
networks
Activities
Products/
services
Technologies and
knowledge
Market
Value chain
Classification
Fish farming
technology
Existing actors
Improved networks
More focus on
innovation
Fish farming
technology
Well established
technology and
knowledge base
Existing market for
fish farming
technology
Existing
Path extension
Health sector
technology
New combination of
actors, new networks
New products and
services, new sales
organisation
Health and welfare
technology and services
Existing technologies in
new combinations
Emerging markets for
new products and
services
Partly new
Path renewal
Information security
technology
New constellation of
actors, new networks
R&D and competence
development,
Focus on start-ups
ICT-based information
security services
Existing knowledge base
in combination with
new technologies
Emerging marked
within the information
security field
Potentially new value
chain
Path creation
15
Classification of all the Arena projects
Preliminary classification of 70 projects – classification based on the
intentions and objectives for the projects (not obtained results):
– Path extension: 35
– Path renewal:
32
– Path creation:
3
The programme to a little extent stimulates radical innovations and
the development of new industries.
How can this be explained?
16
Arena’s objectives
Main objective: focus on value creation, not innovation per se:
Originally (2002):
Contribute to more value creation in regionally based businesses/industries
by strengthening the interaction between industrial actors, knowledge
institutions and public actors
Later (from 2006):
Contribute to develop regionally based industrial milieus towards more
innovation and value creation by strengthening ...
Targets:
Increased internal interaction between the project participant
Increased external interaction with external actors (at the national and
international level)
More innovative and cooperative firms
More focus on businesses and industrial development in R&D-institutions
and educational institutions
17
Selection criteria
The resource base of the project (i.e. the resources of the
participating actors)
The network/relations between the actors
Project quality
- Objectives
- Strategies
- Plans
- Embeddedness
Other criteria (specific for the individual calls)
Project quality; in particular project management
18
Evolutionary processes and the role of ARENA
Basic processes of
evolution
ARENA services
ARENA
Mobilisation/
Proposals
Information
Guiding potential projects
Selection
Selection/
Pilot projects/
Main projects
Supervicing project
managers
Competence services
Retention
Additional funding/
Exit
(Struggle/Growth)
(Further development
after Arena)
Variation
The selection processes of Arena
Path extension projects:
– Face the lowest barriers for developing and organising the
projects
– Most factors are well-known, there is an established practice for
organising innovation activities
– Networks among the relevant actors are fairly well developed.
Path renewal projects
– The degree of novelty is somewhat higher
– But the projects will be organised in the context of elements that
are fairly well known
Path creation projects:
– Call for more radical changes
– Barriers for organising may be very high
– Challenging to involve a critical mass of committed actors.
Endres i topp-/bunntekst
01-02-03
20
Concluding remarks
Low level of path creation seems reasonable:
Given the main objective of stimulating more value creation
Given the lower barriers of organising path extension and path renewal
projects
Given the current situation in Norway of positive lock-in in resource
based sectors
Higher risks of failure for path creation projects
However (issues for analyses):
What is the optimum balance between path extention/renewal and
creation projects?
Should the program to a higher extent stimulate path creation projects?
What would be the implication in terms of programme organisation?
21
Thanks for your attention!
olav.spilling@nifu.no
www.nifu.no