By Göran Lindqvist at the 14th TCI Global Conference, Auckland, 2011

2. Clusters, innovation, competitiveness
and policy
TCI Global Conference, Auckland, 29 November 2011
Göran Lindqvist
CSC, Stockholm School of Economics

3. Four questions
What are clusters?
How do clusters arise?
What are the benefits of clusters?
What need is there to support clusters?
Lindqvist, TCI Global Conference, 29 Nov 20113

4. Lindqvist, TCI Global Conference, 29 Nov 20114
1
What are clusters?

5. Lindqvist, TCI Global Conference, 29 Nov 20115
Alfred Marshall
Principles of Economics, 1890

6. Lindqvist, TCI Global Conference, 29 Nov 20116
Staffordshire
pottery
Buckinghamshire
chairs
Bedfordshire
straw plaiting
Sheffield
cultery

7. Lindqvist, TCI Global Conference, 29 Nov 20117
Giacomo Becattini Paul Krugman Michael Porter
1990

8. What are clusters?
Clusters are groups of
geographically proximate
firms in related industries
and related institutions
Lindqvist, TCI Global Conference, 29 Nov 20118

9. Lindqvist, TCI Global Conference, 29 Nov 201110

10. Lindqvist, TCI Global Conference, 29 Nov 201111
Surfboard
makers
Surf
clothing
Surf
shops
Foam &
fiberglass
Wax
Chemicals
Local
university
Other
local
education
Competitions
Festivals
Surf Clubs
Surf Schools
Manu-
facturing
Association
Lobby
Groups
MuseumsSkateboards
and
Snowboards
Local
surf
heroes
Media
Source: HBS MOC student team

11. Lindqvist, TCI Global Conference, 29 Nov 201112
Firms
Research
organisation
s
Education
organisations
Governmen
t
Capital
providers

12. Lindqvist, TCI Global Conference, 29 Nov 201113
2
How do clusters arise?

13. How do clusters arise?
Clusters are naturally occurring phenomena
The grow out of seeds such as:
o natural resources
o particular local demand
o acts of entrepreneurship
Evolution versus construction
o Most clusters have evolved spontaneously
o Some clusters are built as acts of policy
Lindqvist, TCI Global Conference, 29 Nov 201114

14. Lindqvist, TCI Global Conference, 29 Nov 201115
3
What are the benefits of
clusters?

15. What are the benefits of clusters?
Mechanisms
Externalities: when firms benefit from the
presence of other firms in ways they don’t
have to pay for
Access to highly specialised inputs
Knowledge spill-overs
Local labour pool
Lindqvist, TCI Global Conference, 29 Nov 201116

16. What are the benefits of clusters?
Competitiveness
Increased innovation
Increased entrepreneurship
Lindqvist, TCI Global Conference, 29 Nov 201117

17. Lindqvist, TCI Global Conference, 29 Nov 201118
4
What need is there to
support clusters?

18. A cluster…
19
Government Research
organisations
Education
organsiations
Capital
providers
Companies
G. Lindqvist, 2011SSE
MOC

19. 20
Government Research
organisations
Education
organsiations
Capital
providers
Companies
G. Lindqvist, 2011SSE
MOC
A cluster… or isolated islands?

20. SSE MOC 2011 - Session 621G. Lindqvist, 2011
Strong
interaction
Weak interaktion
Good knowledge
Dense networks
Common “language”
Similar norms and
attitudes
Shared vision
High trust
Positive incentives
Poor knowledge
Sparse networks
Different “languages”
Different norms and
attitudes
Different visions
Low trust
Negative incentives

21. Reality is inefficiencies
+ Knowledge failures
+ Network failures
+ Collaboration failures
+ Coordination failures
= Innovation failures
22
G. Lindqvist, 2011SSE
MOC

22. The seven gaps of innovation
23
1
23
4
5
The research
gap
The education gapThe capital gap
Government gap
The company-to-
company gap
G. Lindqvist, 2011SSE
MOC

23. 6
G. Lindqvist, 2011
24
SSE
MOC
Cluster-to-
cluster gap

24. 7
G. Lindqvist, 2011
25
SSE
MOC
Global market
gap

25. Contact
Göran Lindqvist, PhD
Center for Strategy and Competitiveness
Stocholm School of Economics
www.sse.edu/csc
goran.lindqvist@hhs.se
+46 8 7369524
26 Lindqvist, TCI Global Conference, 29 Nov 2011