Cluster Life Cycles – Dimensions and Rationales of Cluster Development
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Cluster Life Cycles – Dimensions and Rationales of Cluster Development *Fraunhofer Institute Systems and Innovation Research Dirk Fornahl* Max-Peter Menzel** *Institute for Economic Policy Research (IWW) Section System Dynamics and Innovation Fraunhofer ISI Institute Systems and Innovation Research **Institute of Geography University of Bern
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*Institute for Economic Policy Research (IWW) Section System Dynamics and Innovation. ISI. Fraunhofer. Institute. Systems and. Innovation Research. **Institute of Geography University of Bern. Cluster Life Cycles – Dimensions and Rationales of Cluster Development. Dirk Fornahl* - PowerPoint PPT Presentation
Transcript of Cluster Life Cycles – Dimensions and Rationales of Cluster Development
Cluster Life Cycles – Dimensions and Rationales of Cluster
Development
*Fraunhofer
Institute Systems and Innovation Research
Dirk Fornahl*Max-Peter Menzel**
*Institute for Economic Policy Research (IWW)
Section System Dynamics and Innovation
FraunhoferISI
InstituteSystems andInnovation Research
**Institute of Geography
University of Bern
1. December 2006 2/18
ISI Motivation
Industry DynamicsMotivation ConclusionsCLCRegional Dynamics Cluster Stages
• Empirical observation Singular case studies describe regional clusters in peculiar
stages Some studies analyze the development of a cluster through
some distinctive stages Clusters emerge, grow and decline stages
• Aim Develop an analytical framework to define and examine
cluster stages Identify processes resulting in the development through the
stages
1. December 2006 3/18
ISI Industry Dynamics
Industry DynamicsMotivation ConclusionsCLC Cluster Stages
• Cluster development has characteristics like the ones of the according industry Quantitative development
EmergenceDeclineSustainingGrowth
time
# fir
ms
/ em
ploy
ees
Regional Dynamics
1. December 2006 4/18
ISI
Industry DynamicsMotivation ConclusionsCLC Cluster Stages
Industry Dynamics
Qualitative development (innovation, knowledge, etc.)
• Impact of qualitative dynamics on quantitative ones
Dominant designNumber of innovations
time
Product innovations
Process innovations
Regional Dynamics
1. December 2006 5/18
ISI
Industry DynamicsMotivation ConclusionsCLC Cluster Stages
Regional Dynamics
• Firms in clusters (but the same industry) show different patterns than non-clustered firms
Firms in cluster
Firms outside cluster
Gro
wth
time
E.g. Pouder & St. John 1996, Audretsch & Feldman 1996
Regional Dynamics
1. December 2006 6/18
ISI
Industry DynamicsMotivation ConclusionsCLC Cluster Stages
Regional Dynamics
• Clusters not the mere localization of industries Necessary to elaborate joint effects of industrial and spatial
dynamics on the firms in the cluster
Firms in the same industry
Regional cluster
Cluster dynamics more than the sum of industrial and regional dynamics
Question: What leads to the peculiar cluster development?
Firms in the same region
Regional Dynamics
1. December 2006 7/18
ISI Regional Dynamics
Industry DynamicsMotivation ConclusionsCLC Cluster Stages
• Distinctiveness of regional development Regional “entrepreneurial spirit” and spin-offs Marshallian externalitites (specialization) Jacobsian externalities (diversification) Additional effects by proximities (e.g. cognitive proximity)
• Selected effects Cognition and knowledge: Perception of diverse actors and
higher absorptive capacity to bridge cognitive distance (Maskell 2001)
Modification of industrial dynamics (enforcing, reducing)
Regional Dynamics
1. December 2006 8/18
ISI Cluster Life Cycle (CLC)
Industry DynamicsMotivation ConclusionsCLC Cluster Stages
Quantitative Qualitative
Direct, “firm focused”
•Number of firms and organizations
•Number of employees
•Variety and diversity of competencies and organizational forms
•Heterogeneity vs. focusing
Systemic •Perception of cluster
•Capabilities for collective action
•Exploitation of synergies
•Networks of value chains
Regional Dynamics
1. December 2006 9/18
ISI Cluster Life Cycle & Dynamics
Industry DynamicsMotivation ConclusionsCLC Cluster Stages
• Functioning of systemic effects in a regional context Faster creation of synergies between firms in a regional
cluster through
• Facilitated co-ordination by quantitative systemic effects
• Cognition of diverse actors
• Both effects result in facilitated learning and bridging of technological distances
Regional Dynamics
1. December 2006 10/18
ISI Application to Cluster Stages
Industry DynamicsMotivation ConclusionsCLC Cluster Stages
Firm (size)
Absorptive capacity
Regional Dynamics
1. December 2006 11/18
ISI Emerging Cluster
Industry DynamicsMotivation ConclusionsCLC Cluster Stages
Few firms and employees
Scarce possibilitiesfor networks
Cluster hardly perceivable
Quite heterogeneous
Regional Dynamics
Max-Peter Menzel
könnte man in diese Grafik vielleicht auch noch die Heterogeneity rein bringen? Aber ich denke, die Grafiken unten sind zur Not auch noch ohne die Life Cycle Kurve verständlich.
1. December 2006 12/18
ISI Growing Cluster: Quantitative
Industry DynamicsMotivation ConclusionsCLC Cluster Stages
Growing number of firms and employees
Growing perception
Growth of absolute diversityDecrease of heterogeneity
Open and flexible networksExploitation of diversity
Synergies
Learning effects increase absorptive capacityFirms move towards each other
Regional Dynamics
1. December 2006 13/18
ISI Sustaining Cluster
Industry DynamicsMotivation ConclusionsCLC Cluster Stages
Stagnating number of firms and employees
Cluster shapes the region(„regional identity“)
Homogeneous or focussed competenciesStrong bias of the regional economy
towards the cluster
Utilization of synergies and external knowledge by
open networks
Technological distancesare maintained and created
Regional Dynamics
1. December 2006 14/18
ISI Declining Cluster
Industry DynamicsMotivation ConclusionsCLC Cluster Stages
Declining number of firms and employees
Negative sentiments withrespect to the cluster
Low diversity Strong focus on a narrow technological trajectory
Insufficient adaptability of the cluster caused by closed networks
Regional Dynamics
1. December 2006 15/18
ISI
Industry DynamicsMotivation ConclusionsCLC Cluster Stages
Summary
• Qualitative and quantitative development (stylized)
Qualitative development (Heterogeneity)
Quantitative development
Emergence DeclineSustainingGrowth
time
# fir
ms
/ em
ploy
ees
hete
ron
eity
Regional Dynamics
1. December 2006 16/18
ISI Conclusions and Outlook
Industry DynamicsMotivation ConclusionsCLC Cluster Stages
• Summary Cluster develop through peculiar „stages“
• E.g. cluster conditions are not favorable in all stages Quantitative and qualitative dimension of cluster
development Cluster dynamics result from industrial and regional
dynamics, but are different from the isolated impacts Endogenous explanation for changes / movement through
the stages based on qualitative dimension (incl. renewal) Generation of empirically testable hypotheses
• Entries, exits and survival over the CLC
• Technological diversity over the CLC
Regional Dynamics
1. December 2006 17/18
ISI Conclusions and Outlook
Industry DynamicsMotivation ConclusionsCLC Cluster Stages
• Outlook Conceptual framework that can be extended, e.g. by
• In-depth discussion of the endogenous changes
• Product and process innovation
• Marshallian and Jacobsian externalities over time
• Market types Beginning (in addition to spin-offs) and end of cluster Incorporation of different kinds of clusters Role of entries on development of competencies and
type of entries over CLC Empirical test of quantitative and qualitative
dimensions over the CLC
Regional Dynamics
