20th TCI 201Global conference "The  Future  of  Clusters  Through  Cross-­‐Country  and  Cross-­‐region  Collabora7on“.  7-­‐9  November  2017  

Modern industrial policy toolkit: insights from the Russian cluster

policy experience

Evgeniy  Kutsenko  

 Head  of  the  Russian  cluster  observatory  

Na7onal  Research  University  -­‐  Higher  School  of  Economics  

1.  Na&onal  policy  has  had  a  significant  impact  on  the  emergence  of  cluster  ini&a&ves  and  their  performance.  Evidence  from  the  pilot  innova&ve  clusters  (PIC)  program    

0,42  

0,85  

0  

0,5  

1  

Average  number  of  new  CI    

located  in  non-­‐PIC  home  regions  

located  in  PIC  home  regions  

In   the   regions  of   the   state   supported  clusters   (PICs)  new  cluster  ini7a7ves  were  created  on  average  twice  as  intensively  as  in  the  other  regions.  

3  

7  

58  

0  

50  

100  

The  share  of  CI  with  medium  or  high  level  of  ins&tu&onal  development  

non-­‐PICs,  %   PICs,  %  

Average   employment   in   the   clusters   supported   by   the   state  subsidy   was   3   &mes   higher   than   in   the   clusters   with   private  funding  only  

1   2  The  share  of  PICs  with  high  and  medium  level  of  ins7tu7onal  development   is  8.29  &mes  higher   than   the   respec7ve   share  of  non-­‐PICs  

4   18  of  65  CI  which  had  lost  the  contest  con&nued  func&oning,  despite  the  lack  of  state  support  

40%   of   the   German   cluster   ini7a7ves   with   rejected   applica7ons   for  InnoRegio   programme   contest   s7ll   exist   and   implement   their   projects  (Eickelpasch  and  Fritsch,  2005).  

lost  the  PICs  compe77on,  but  survived  

lost  the  PICs  compe77on  and  vanished  

28%    

7,8  

23,8  

0  

10  

20  

30  

Average  No.  of  employees  in  CI  

non-­‐PICs,  K  people     PICs,  K  people      

2.  Specific  support  programmes  can  address  different  challenges  and  industries  /  sectors  (manufacturing-­‐based,  science-­‐based,  SME-­‐based  clusters)  

Boost  compe77veness  of  SMEs  in  tradi7onal  industries  such  as  food,  wood  processing,  furniture,  jewelry  and  so  on.  Financing  of  collabora7ve  projects  -­‐  is  one  of  the  important  instruments.  

27  pilot  innova7ve  clusters  located  in  28  Russian  regions  were  selected  for  subsidizing  with  the  total  funds  exceeding  €  90  m  in  2013-­‐2015.  

12  Russian  regions  host  12  innova7ve  clusters,  which  were    assigned  the  status  of  investment  a_rac7veness  leaders  on  a  global  scale.    

34  clusters  development  centres  located  in  33  Russian  regions  were  subsidized  with  the  total  funds  of  €  19.4  m  in  2010-­‐2016.  

22  industrial  clusters  are  located  in  20  Russian  regions.    The  total  subsidy  to  support  8  cluster  projects  is    expected  to  be  €  27  m  in  2013-­‐2015.    

Provide   comprehensive  approach  to  support  of  new  and   emerging   industries,  such   as   IT,   biotechnology,  advanced  materials,  etc.  It's  crucial   to   build   a   proper  ecosystem   around   them;  define   key   regions,   their  ro les ,   enhance   cross-­‐regional  coopera7on  

Map  of  na7onally-­‐supported  clusters  and  cluster  development  centres  in  Russia  

Revitalize   the   old   industrial  agg lomera7ons:   aerospace,  automo7ve,   nuclear   sectors,  petrochemical   and   chemical  industries.  Value   chains   extension  and   diversifica7on   to   the   new  markets  are  needed.  

Challenge  1   Challenge  2  

Challenge  3  

3.  Policy  tradi&ons  employed  by  different  ministries  is  more  influen&al  for  support  programmes  design  than  country  or  cluster  features  

Criteria   Innova&ve  Clusters  (Ministry  of  Economic  Development,  2012)  

Industrial  Clusters  (Ministry  of  Industry  and  Trade,  2015)  

Key  support  goals   §  Export  volumes  increase  §  A_rac7on  of  investments    

§  Enhance  industrial  coopera7on  §  Import  subs7tu7on  

Sectorial  and  spa&al  orienta&on    

§  No  restric7on  to  sectors  of  ac7vity  (in  fact,  biopharmaceu7cs,  IT,    aerospace,  petro-­‐chemistry,  and  machinery)  

§  Single  region  or  neighboring  regions    

§  Manufacturing  §  Cases  of  clusters  with  members  in  the  regions  

remoted  from  each  other  

Support  provision  principles,  and  support  addressee  

§  Advance  co-­‐funding  §  Regional  authori7es  

§  Compensa7ons  of  ex-­‐post  expenses    §  Industrial  enterprises  

Support  focus  

§  Synthe7c  cluster  programmes  (a  set  of  projects  fulfilled  by  various  cluster  members)  

§  Joint  projects  fulfilled  by    two  or  more  cluster  members  (there  is,  at  least,  one  clusters  member  who  invests  in  a  new  product  that  is  planned  to  be  purchased  by  the  other  clusters  member)  

Cluster  management  organiza&on  as  a  na&onal  support  addressee  

§  Supported  from  the  federal  funds  inter  alia   §  Not  supported  (they  are  financed  either  by  cluster  members,  or  regional  authori7es)  

Cluster  selec&on  approach  

§  One-­‐7me  compe77on,  cluster  short-­‐list  upda7ng  unformalized    

§  Cluster  short-­‐list  is  made  up  on  a  applica7ve  and  con7nuing  basis  

Funding  &me-­‐frame  §  One  year  §  Annual  compe77on  of  applica7ons  among  clusters  

from  a  closed  short-­‐list  

§  A  contract  between  Ministry  of  Industry  and  Trade  and  cluster  project  ini7ator  for  a  5-­‐year  period  maximum  

4.  Regions  can  vary  greatly  in  terms  of  cluster  poten&al  (quan&ty  and  strength  of  sta&s&cal  clusters),  which  is  not  always  considered  by  policy-­‐makers  

42  41  

40  

38  37  

35  34  

33  

28   28  27  

26  

24  23   23  

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20  

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15   15   15   15  14   14   14  

13  12   12   12   12   12  

11   11   11   11   11   11  10   10   10   10  

9   9  8  

7   7   7  6   6   6  

5   5  4   4   4   4  

3   3   3  2  

1   1   1   1   1   1   1  0   0   0   0   0   0   0   0   0  

0  

5  

10  

15  

20  

25  

30  

35  

40  

45  

City  of  St.  Pe

tersbu

rg  

City  of  M

oscow  

Moscow  Region  

Repu

blic  of  T

atarstan  

Sverdlovsk  Region  

Rostov  Region  

Repu

blic  of  B

ashkortostan  

Nizh

ny  Novgorod  Re

gion

 Pe

rm  Region  

Samara  Re

gion

 Tyum

en  Region  

Chelyabinsk  Re

gion

 Krasno

yarsk  Re

gion

 Vladim

ir  Re

gion

 Krasno

dar  R

egion  

Leningrad  Re

gion

 Irk

utsk  Region  

Novosibirsk  Re

gion

 Saratov  Re

gion

 Vo

rone

zh  Region  

Tula  Region  

Kemerovo  Re

gion

 Kirov  Re

gion

 Prim

orsky  Re

gion

 Yarosla

vl  Region  

Tver  Region  

Kaluga  Region  

Briansk  Re

gion

 Re

public  of  U

dmur7a

 Vo

lgograd  Re

gion

 Sm

olen

sk  Region  

Stavropo

l  Region  

Khabarovsk  Region  

Repu

blic  of  Sakha  (Y

aku7

a)  

Vologda  Re

gion

 Orenb

urg  Re

gion

 Ch

uvash  Re

public  

Ulyanovsk  Region  

Penza  Re

gion

 Omsk  Region  

Arkhangelsk

 Region  

Altai  Region  

Belgorod

 Region  

Kursk  Re

gion

 Re

public  of  K

omi  

Ryazan  Region  

Tomsk  Region  

Repu

blic  of  M

ordo

via  

Murmansk  Region  

Tambo

v  Re

gion

 Novgorod  Re

gion

 Astrakhan  Re

gion

 Mari  El  Rep

ublic  

Lipe

tsk  Re

gion

 Zabaikalsky  Re

gion

 Ko

stroma  Re

gion

 Am

ur  Region  

Ivanovo  Re

gion

 Re

public  of  K

arelia  

Pskov  Re

gion

 Re

public  of  B

urya7a

 Kaliningrad  Region  

Repu

blic  of  D

agestan  

Kurgan  Region  

Orel  Region  

Repu

blic  of  K

abardino

-­‐Balkaria

 Kamchatka  Region  

Magadan  Region  

Repu

blic  of  Severnaya  Ose7ya-­‐Alaniya  

Sakhalin  Region  

Cheche

n  Re

public  

Karachay-­‐Che

rkessia

 Rep

ublic  

Jewish

 Auton

omou

s  Region  

Repu

blic  of  A

dygea  

Repu

blic  of  A

ltai  

Ingush  Rep

ublic  

Repu

blic  of  K

almykia  

Repu

blic  of  T

yva  

Repu

blic  of  K

hakassia  

Chukotka  Auton

omou

s  Area  

Number  of  strong  clusters  (at  least  1  star)  

Number  of  clusters  with  cluster  ini7a7ves  

Number  of  strong  clusters  (at  least  1  star)  with  cluster  ini7a7ves  

Regions  with  ci7es  of  more  than  1  mln  dwellers  

5  

Cluster  mapping  helps  to  specify  the  policy.  The  case  of  Water  transporta&on  in  Russia:  s&ll  great  poten&al  for  cluster  ini&a&ves  and  cross-­‐regional  coopera&on  

Shipbuilding cluster (Astrakhan region) Shipbuilding and

aircraft pilot innovative cluster of Khabarovsk

region

St. Petersburg Composites cluster

Shipbuilding pilot innovative cluster of Arkhangelsk region

- Cluster initiatives (CI) - Strong clusters (at least one star by the ECO methodology) - CI, supported by the Ministry of Economy

-­‐  High  (4  or  3  stars)  -­‐  Medium  (2)  -­‐  Basic  (1)  

Cluster  strength  

6  

5.  The  intensity  and  validity  of  cluster  policy  varies  greatly  in  different  sectors.  Russia  priori&zes  hi-­‐tech  and  manufacturing  

3   2  0,2  

9  

3  

2  

8   18  

15   19  

0  

5  

10  

15  

20  

25   Valid  and  full-­‐scale  cluster  policy    

Unfocused  cluster  policy  

Feasible  cluster  policy  with  room  for  progress  

No  cluster  policy  

Average  nu

mbe

r  of  clusters  a

nd  cluster  ini7a7

ves  

7  

Number  of  strong  clusters  (at  least  1  star)  

Number  of  clusters  with  cluster  ini7a7ves  

Number  of  strong  clusters  (at  least  1  star)  with  cluster  ini7a7ves  

4  industries:  § Biopharmaceu7cals  § Aerospace  Vehicles  and  Defence  

§  Informa7on  Technology  and  Analy7cal  Instruments  

§ Automo7ve  

21  industries:  § Upstream  Metal  Manufacturing  § Upstream  Chemical  Products    § Plas7cs    § Construc7on  Products  and  Services    § Food  Processing  and  Manufacturing    § Downstream  Metal  Products    § Agricultural  Inputs  and  Services    § Furniture    § Downstream  Chemical  Products    §  Tex7le  Manufacturing    

                       10  industries:  § Livestock  Processing    § Paper  and  Packaging    § Oil  and  Gas  Produc7on  and  Transporta7on    § Jewellery  and  Precious  Metals    § Coal  Mining    § …  

16  industries:  § Music  and  Sound  Recording    § Performing  Arts    § Video  Produc7on  and  Distribu7on  

§ Marke7ng,  Design,  and  Publishing  

§ Distribu7on  and  Electronic  Commerce  

§ Financial  Services    §  Insurance  Services  § Apparel    §  …  

Hi-­‐tech   Manufacturing  and  agriculture  

Tradi7onal  and  primary    industries  

KIBS,  crea7ve  and  cultural  industries  

Ideas  for  industrial  policy  

1.  Posi7ve  effects  of  cluster  policy  such  as  the  increase  of  new  cluster  ini7a7ves  (out  of  the    supported  ones)  suggest  the  importance  of   long-­‐standing  cluster  support  programs.  Not  only  alloca7on  of  funds,  but  also  legi7ma7on  of  relevant  regional  clustering  ini7a7ves  and  policies  

2.  Several  specific  support  programmes  can  turn  to  be  more  effec7ve,   than  a  holis7c  one,  which   “addresses   all   the   issues   of   all   clusters”.   Specific   cluster   programs  with   different  design   depending   on   par7cular   industry   (50+   according   to   Porter   and   ECO)   /   group   of  industries?  

3.  Policy   tradi7ons   employed   by   different   ministries   is   more   influen7al   for   support  programmes   design   than   country   or   cluster   features.   Openness   between   different  ministries   and   mutual   learning   is   crucial   to   overcome   possible   path   dependencies   of  current  policy  tradi7ons  

4.  Cluster   mapping   is   worth   even   greater   considera7on.   Regional   experimenta7on   in  industrial  policy  need  not  be  limited;  it  is  the  risks  distribu7on  that  need  to  be  op7mized  (the  less  clustering  poten7al  is  feasible,  the  more  private  or/and  regional  co-­‐investment  is  required).  Basis  for  enhancing  interregional  collabora7on  between  CI  

5.  Services   (including  KIBS),   crea7ve  and  cultural   industries  can  be  underes7mated  as   full-­‐fledged  regional  development  priori7es  and  cluster  policy  addressee.  (BUT:  cluster  policy  efficiency  could  be  industry-­‐related)  

8