1. Anders Malmberg Regional Economies in a Globalising World Enhancing Intellectual Capacity and Innovation Cardiff, 21 November 2008 Localised Clusters in Global Networks

2. Outline What we (think we) know about spatial clustering, innovation and competitiveness Some experiences and lessons from recent cluster initiatives and polices in the small and open economy of Sweden

3. At the core: key questions in economic geography How do characteristics of the place of location affect the competitive (innovative) performance of firms? Why is economic development spatially uneven? Why do similar and related economic activity so often agglomerate in space to form localised clusters? Why is there regional economic specialization, and how are such patterns reproduced over time?

4. Dominating approach Innovation › cost efficiency Innovation › ”high-tech” Innovation: result of interaction Proximity plays a role in such interaction Industrial systems: localised Local knowledge structures › raw material and wages ∑ Shifting focus from production cost/transport cost/market size to the innovative performance of localised clusters of firms

5. Michael Porter’s grand claim: Clusters are geographic concentrations of interconnected companies, specialised suppliers, service producers, firms in related industries, and associated institutions (for example, universities, standard agencies, and trade associations) in particular fields that compete but also cooperate. Critical masses of unusual competitive success in particular business areas, clusters are a striking feature of virtually every national, state, and even metropolitan economy, especially those of more economically advanced nations (Porter 1998)

6. So, what factors make firms/industries in spatial clusters innovative/competitive? Local inter-firm interaction: business transactions, collaboration (not really) Local inter-firm rivalry: monitoring, comparison (possibly) Local labour market processes (probably) Localised learning processes (probably) Institutions 1: Public R&D; network creating organisations, ”Triple Helix” (yes, but …) Institutions 2: rules, norms, conventions (yes, but …)

7. Conclusions on clusters Spatial clustering of similar and related firms does seem to contribute to regional growth and prosperity Such clusters are often less locally integrated than some of us have believed Local rivalry and labour market dynamics are often more important than inter-firm collaboration The more developed their global links, the more successful clusters tend to be Policy implications?

8. Some lessons from three recent Swedish Cluster Initiatives Uppsala Bio: a life science initiative Linköping Socware: a systems on chip initiative IVSS Gothenburg: intelligent vehicle safety systems Initiative/funding from: Vinnova Invest in Sweden Agency

9. Lessons: general Modest resources can generate large activity: “the tail that wags the dog” [UB: 1 vs 1500 mil Euro] Long-term and sometimes diffuse effects (changing attitudes, mutual learning, network creation etc) are most important, but short-term and concrete results (new firm formation, FDI or VC attraction, new jobs) are necessary to keep up enthusiasm (internally and externally) and momentum Pick-the winner problem at several scales (which region, which sector, which project?) Generally it helps if you have a cluster to start with

10. Lessons: regional approaches Dense, dynamic regional milieus – intimately linked to the outside world (industry and academia completely global, policy making is national/local) Presence of global firms: pressure to improve quality both of the cluster and the cluster initiative Key people and skilled labour are rooted in the milieu = need for attractive “people climate” (cf R. Florida) Broad regions (e.g. the wider Stockholm region rather than Uppsala) when it comes to international marketing Openness is key: Too narrow and strict regional delimitations restrict project potential Some of the most impressive cluster initiatives were born out to the wish to attract investment, people and and knowledge from abroad into Swedish clusters

11. So, by way of conclusion Clustering is important, and … Cluster initiatives may play a role, but … Aim for global reach and nurture international links and inflows rather than just local networking