Recap of main points about regional clusters, industrial districts etc. Regional clusters and industrial districts are geographic concentrations of interconnected firms in one or a few related industries Clusters and districts are seen to stimulate the innovativeness and competitiveness of their firms Factors stimulating innovativeness are a) workers’ skill and mutual trust (Italian districts), b) demanding customers and local rivalry (Porter), c) the activity of entrepreneurial firms (high-tech clusters) The theory of regional innovation system (RIS) adds new elements to the factors stimulating firms’ innovativeness The theory of RIS systemises new approaches to enterprise support in some innovative regions

Definition of a regional innovation system A regional innovation system includes (according to Cooke): 1) A cluster of geographically proximate firms in vertical and horizontal relationships, 2) cooperation on innovation between (at least) some core firms and knowledge organisations, 3) a localized enterprise support infrastructure with a shared develop-mental vision among firms for business growth, and 4) a regional political level with some power to intervene and support economic development, particularly innovation What are the main differences between a regional innovation system and a) Italian industrial districts and b) Porter’s regional clusters?

From regional clusters to regional innovation systems Phenomena Short definition How to move ‘up the hierarchy’? 1. Regional specialised agglomeration Concentration and overrepresentation of jobs in one or some related industries in a region 2. Regional cluster Regional specialised agglomeration + a regional production system (related firms and organisations) 12: Stimulate cooperation between client and suppliers 3. Regional innovative network Regional cluster + long-term interactive cooperation on innovation between regional firms 2 3: ? 4. Regional innovation system Regional innovative network + cooperation between (the cluster of) firms and knowledge organisation on innovation 3  4: ?

Marin biotech in Tromsø: a small-scale RIS Tromsø has 15-20 fairly newly established biotech firms with a bit more than 200 employees. In addition Tromsø has 400-500 in marine and biological related institutions in Tromsø The biotech firms are related to the institutions - A core of skilled persons participate in several research projects and to some extent start-ups - The firms are mainly established by the use of research and knowledge from the R&D-milieu in Tromsø - Candidates from the Norwegian fishery university in Tromsø have central positions in nearly all the new biotech firms The growth of the biotech industry in Tromsø is also related to the work of a public support programme, MABIT (marin biotechnology in Tromsø) - MABIT supports research projects run by researchers and firms - MABIT tries to increase cooperation between research institutes, industry and the public support system Why can the biotech industry in Tromsø be denoted as a (very small) RIS?

Important regional resources for innovation activity Important regional resources for innovation activity. Results from studies of 10 Norwegian regional clusters Resources in declining importance Specialised labour market Subcontracting system Unique combinations of different types of knowledge Learning processes and spill-over effects Spirit of cooperation and entrepreneurial attitudes Formal institutions for cooperation The presence of important clients and users What does the list tell about the importance of regional innovation systems in Norway? Strong or weak systems?

Typical regional innovation system barriers Regional innovation systems problems Type of problem Possible policy tools Organisational ‘thinness’ Lack of relevant local actors (knowledge organisations, innovative core firms) Link firms to external resources (such as knowledge milieus) + acquisition Fragmentation Lack of regional cooperation and mutual trust Stimulate collaborative efforts by creating meeting places ‘Lock-in’ Regional industry specialised in outdated technology Open up networks towards external actors + local mobilisation

Factors triggering innovation activity in regional clusters Regional clusters are seen to enhance the economic performance of the firms within them The debate about how clusters stimulate innovation capability and economic performance reflects two themes: 1. If cluster firms get their innovative strength from ‘hard’ economic and market related factors (such as local rivalry or ‘common’ subcontractors) or from ‘soft’ socio-cultural and institutional relations (such as mutual trust) 2. If cluster firms achieved innovativeness from regional or ‘extra-regional resources (se next sheet)

External factors (outside the firms) that may trigger the innovation capability of firms in regional clusters Regional resources ‘Extra-regional’ resources (outside of the region) ‘Hard factors’: factors related to economy and market Example: External economies of scale achieved in network of specialised firms Example: Demand and claim from ‘global customers’ ‘Soft factors’: sosio-cultural and institutional factors Example: Co-operation embedded in mutual trust and understanding Example: Co-operation between persons in different part of the world having close social relations In which box should we put a) the theory of industrial district and b) Porter’s cluster theory?

Globalisation and cluster development Globalisation refers to the fact that large, international firms increase their power in the economy Many firms (and firms in regional clusters) are becoming incorporated in global value chain governed by large, powerful corporations The rule of the game are set by powerful global actors and by international quality standards (hence the importance of ‘extra-regional’ resources) Based on this, the debate on regional clusters concerns the role of regional factors in industrial development: 1. Can specific, regional resources, local co-operation etc. strengthen the competitiveness of firms, or is really the most decided by harder (price) competition in a more open economy and the activity of global corporations? 2. Is there any use of regional industrial policy (if the global level is the most important one)? What is your answer on question 1?

Number of clusters experiencing increasing 'internalisation' or 'externalisation' of activities over the last 10 years Results from studies of 34 European clusters (EU report 2002) http://europa. eu.int/comm/enterprise/enterprise_policy/analysis/observatory.htm Internalisation = more of the activity done inside the cluster boundary Externalisation = More of the activity done outside the cluster boundary What does the figure tell about development of firms’ home base and development of the production system?

Local buzz and global pipelines Bathelt, Malmberg, Maskell: Both regional and ‘extra-regional’ relations are important for the innovation capability of firms, but for different types of innovations. Spontaneous learning through local buzz: Actors learn by being located in (some type of) clusters. Knowledge are available by ‘being there’, meeting people, and by watching other firms and competitors (the importance of local rivalry). What type of cluster? - Firms in clusters ‘may dislike each other and refuse to talk but can still, indirectly, contribute to each other’s competitive success in global market’ Firms build information channels to selected actors outside of the region, named global pipelines. Firms look for external actors with specialised knowledge that can supplement the firm’s own knowledge base. Firms have to build trusts and understanding with the external actors in order to have an efficient exchange of knowledge Cluster firms can only uphold relatively few global pipelines. Why?

Relationship between local buzz and global pipelines (Figure 1, Bathelt et. al.) Firms, actors Region Local information flow, gossip, new, buzz Global pipelines Local buzz and global pipelines are seen to strengthen each other. Dynamic clusters need both. Why so?

Some constraints of the local buzz – global pipeline argument Local buzz includes mainly tacit knowledge, diffusion of existing knowledge, and knowledge that can stimulate incremental innovations - But what about the creation of new knowledge inside clusters, and the development of radical innovations? Is local buzz adequate? New knowledge to carry out more radical innovations are found in global pipelines - But how does the relation between cluster firms and global actors occur? Can cluster firms freely select any global collaborator and get new and scarce knowledge from them? The content of global pipelines is not particularly well developed by Bathelt et. al. More developed in theories of global value chains

Discussion How can firms (or parts of firms) and jobs be embedded in Norway? What can we learn from the theories of regional clusters and innovation systems in that respect? Norwegian manufacturing firms are often specialised suppliers for large customers in other countries (such as in the automotive industry). What are the possibilities of these suppliers to upgrade their activity?