1 Changing Paradigm of Cluster Development: Learning from Global Experiences Promoting Innovation in Clusters Prof. Christian Ketels President, TCI Network Principal Associate, Harvard Business School

2 GLOBAL NETWORK TERRITORY CLUSTER INNOVATION PRACTITIONERS

3 Who forms the TCI Network? 60+ Organizational Members National and regional agencies Cluster organizations Multilateral agencies Academic institutions Companies 500+ individual members professionals reached

4 INFORMCONNECT Conferences Global (Mexico) Regional (Australia, Europe, North America) Topical (ICT Clusters) Regional groups Latin America Europe Australia Member Services Interest groups Peer reviews Project participation Mentor matching Professional development COLLABORATE Website/Social Media Newsletter Cluster Database Articles/Knowledge Center LinkedIn-Group, YouTube- Channel, etc. What Does The TCI NETWORK Offer?

5 How Can You Get Engaged? Follow… Participate… And Join…

6 Promoting Innovation in Clusters Innovation is getting more critical than ever for –firms’ competitive success –locations’ sustained prosperity growth Innovation, especially science-driven innovation, remains highly concentrated in a few locations globally Innovation requires a combination of –individual excellence –local dynamism –global linkages Does cluster presence benefit innovation performance? How can clusters be used to stimulate innovation?

7 Innovation Means... Different Things in Different Locations The impact of innovation on a location depends on the diffusion of innovative performance across the entire economy, not just isolated success AssimilateAdaptCreate …global knowledge, technology, and practices …valuable new knowledge, technology, practices, and products and services …global knowledge, technology, and practices to local needs and circumstances

8 Does Cluster Presence Benefit Innovation Performance? Empirical Evidence Prosperity EntrepreneurshipStructural Change Positive correlation between share of regional employment in strong clusters (breadth of clusters; related cluster strength) and: Wages Productivity Job growth Patenting Positive correlation between share of regional employment in strong clusters (strength of related cluster) and: New business formation in new/existing industries Survival of new firms Job growth in new firms Path of structural change (emergence of new clusters) in regional economies is driven by legacy of composition (portfolio of existing clusters) e.g. Porter (2003), Greenstone (2008). Delgado/Porter/Stern (2012), Ketels/Protsiv (2013), Aharonson et al (2013) e.g., Delgado/Porter/Stern (2011), Lindqvist/ Wennerberg (2008) e.g., Neffke et al (2009); Boschma et al. (2013)

9 How Can Clusters Be Used to Stimulate Innovation? Delivery channel to upgrade the excellence of many, especially smaller, organizations Instrument to enhance the global visibility and connectedness of the cluster Platform to organize collective action for upgrading the business environment Platform to enhance business linkages between entities in the cluster Cluster Organization

10 Key Issues for India Match the objectives of cluster efforts with the needs of the economy Match the structure of the support efforts with the existing institutional capacity Use different types of cluster efforts in different situations (i.e,, high tech, manufacturing, handicrafts, etc.) India can benefit significantly from cluster efforts and has a lot to learn from the international experience A successful Indian cluster program will be an Indian answer to Indian needs, not a copy of foreign efforts