Geographically concentrated clusters of firms and other related agents (universities, research centres, training institutes, etc.) have become an extremely popular basis for policies that seek to foster competitiveness. Indeed, it is difficult to find a European country or region that doesn’t have some form of support for clusters, even when they are not explicitly called clusters.
Spain is no different, and cluster policies here are going through an interesting phase of resurgence. Mature cluster policies in regions such as Catalonia and the Basque Country – both celebrating a quarter of a century of support for clusters – are being renewed and refreshed, and new policies are emerging in regions such as Navarra and the Balearic Islands, where clusters haven’t been a strong part of the policy scenario until now. I have had the opportunity to engage with policy-makers and cluster practitioners at events in each of these regions over the last few months, and it seems that there is a renewed buzz around clusters in Spain.
It is an interesting moment to reflect, therefore, on the reasons why clusters are an attractive focus for competitiveness policy. Indeed, amidst the vast panorama of cluster initiatives and cluster associations it is easy to forget the socioeconomic arguments behind the cluster concept and the associated principles that should guide the actions of these institutions.
The basis for clusters is a fundamental principle of economic geography: related economic activities naturally tend to concentrate in specific places. The English economist Alfred Marshall first wrote about this in the early 1900s, based on his observations of English cities. He argued that industries were localised in specific towns and cities because of manufacturers’ needs for human and natural resources and specialised markets, and also because their proximity to one another created a ‘special atmosphere’ that gave advantages to firms.
It is the potentially potent blend of competition and cooperation among firms and other agents working in related economic activities and in close proximity that cluster policies seek to foster. While policies do not need to – and should not try to – create clusters from nothing, they can play a role in provoking their emergence based on existing regional assets and capabilities. They can also play a key role in overcoming some of the barriers to cooperation that prevent existing clusters from becoming even stronger engines of regional competitiveness.
Support for cluster associations is the most popular policy instrument to facilitate these roles. Such associations have been a key part of competitiveness policy in the Basque Country and Catalonia for a quarter of a century now, and support for cluster associations is also the route that Navarra has recently opted for in seeking to strengthen its cluster dynamics. It is important, however, for cluster associations not to lose sight of the fundamental principle of cooperation as a complement to competition and route to collectively improving competitiveness. It is this focus that marks the difference between cluster associations and sector associations or chambers of commerce, for example.
Cluster associations should not be focused on lobbying around their members’ interests or providing specific services for their members, although the latter often fits as a complementary activity. Their primary mission should be to facilitate cooperation among the cluster so as upgrade their collective competitiveness. This means supporting members in identifying and tackling shared problems or challenges where different agents have different parts of the answer, or where scale is important for providing a solution.
These types of shared challenges most commonly emerge around issues related to innovation, internationalisation and the provision of cluster-specific training or infrastructures, where individual efforts in isolation are unlikely to be as effective as cooperative efforts. However the benefits of cooperation can be quite intangible and are not easy for firms to see initially. A long-term approach that gradually builds trust and social capital is needed so that cooperation can become embedded alongside existing competitive dynamics.
With a focused approach to fostering cooperation over the long term, cluster policy and cluster associations can play a key role in enhancing the competitiveness of a wide variety of clusters; from traditional value-chain clusters such as automotive or aerospace; to transversal clusters such as environmental technologies or industrial transformation; to quite specific newly emerging clusters such as functional printing or sports industries. What is more, working with a cluster approach also has the potential to lead to better policy-making in other areas through the strategic intelligence that cluster associations can communicate to government. Indeed, the most successful cluster policies tend to be those that are seen as key vertebra of competitiveness policy, linking into a wide range of other policies that support business competitiveness.
This post is an adaption of an opinion article published in Spanish in the Diario de Navarra.