1. Structural Change in Europe – Innovative City and Business Regions
see following page
burg, London, Paris and Munich. But the actual structur-
ing of the globally valid flexibilisation requirements hap-
pens in Berlin – place matters! – in a specifically Berlin
style. Their habitual practice is constituted in the City of
Berlin in accordance with its own rules, processes and
narratives that correspond with the contradiction, hetero-
geneity and improvisation that are the bedrock of this
city’s identity. (English editing: Blossom Stefani) ::
References
Lange, B. 2007 Die Räume der Kreativszenen. Culturepreneurs und ihre Orte in
Berlin (Bielefeld: Transcript Verlag).
Senate Administration for the Economy 2008 Kulturwirtschaft in Berlin – Entwick-
lungen und Potenziale (2. Kulturwirtschaftsbericht). Senate Administration for
the Economy 2008 (Berlin).
Wellmann, I. 2009 Schnittstellenkulturen – Hybride Akteure, Patchworkökonomien,
intermediäre Institutionen in Lange, B./Kalandides, A./Stöber, B./Wellmann, I.
Governance der Kreativwirtschaft. Diagnosen und Handlungsoptionen
(Bielefeld: Transcript Verlag).
37

2. Structural Change in Europe – Innovative City and Business Regions
National Styles of Cluster Promotion
Cluster policies between variety and convergence
Dr Matthias Kiese, Research Associate, Institute of Economic and Cultural Geography, Leibniz University of Hannover, Germany
Now that almost two decades have passed since the (OECD 1996) and the dearth of budgets making clusters
publication of Porter’s (1990) enquiry into ‘The Competi- an attractive means of focussing public funds. A growing
tive Advantage of Nations’, the cluster concept has appar- concern with technological capabilities was joined by a
ently not lost its appeal to academics, policymakers and mounting dissatisfaction with traditional technology poli-
practitioners thinking about the promotion of innovative cies based on linear models of innovation. As a result, the
capabilities and economic growth. interactive and systemic character of technological change
is now commonly acknowledged, as is the assumption
Defined by Porter himself (1998: 197 f.) as “geographic that despite globalisation, placebound ‘sticky’ assets such
concentrations of interconnected companies, specialised as the exchange of implicit knowledge assume even more
suppliers, service providers, firms in related industries, importance for the competitiveness of firms. In policy and
and associated institutions (for example, universities, practice, the cluster approach is often employed to develop
standards agencies, and trade associations) in particular so-called triple helix relations between universities, indus-
fields that compete but also cooperate,” clusters are wide- try and government (Etzkowitz & Leydesdorff 2000).
ly regarded as a panacea for national, regional and local
competitiveness. Diffusion channels for cluster know-how
Further to these common challenges, research high-
Business-led versus government-led initiatives lights a variety of channels available for the diffusion of
With the ongoing popularity of cluster promotion, it is policies across space and time. Knowledge of and about
often overlooked that the most shining cases of successful cluster promotion may diffuse through literature, either
spatial concentrations of industry emerged and grew with- academic, best practice case studies, or the growing sup-
out explicit government intention. Of over 800 clusters ply of manuals for cluster development distilled from the
identified world-wide in the Harvard Business School’s former. Such know-how is also disseminated by special-
Cluster Meta Study, only one emerged through a public ised consultants acting as transfer agents (Stone 2004),
initiative, while the emergence of a further 40 was influ- and by the mobility of practitioners between regions and
enced by public action such as wars and expulsions (van countries. Practitioners may also use cluster conferences
der Linde 2005: 28). Therefore, it is now widely accepted like those held annually by The Competitiveness Institute
that governments can only create favourable conditions to link into international communities of practice that
for the emergence of clusters and facilitate their growth might lead to knowledge flows in more informal networks
and restructuring once they have emerged. Cluster poli- later on (Brown & Duguid 1991). Finally, politicians and
cies can be defined as “efforts of government to develop practitioners may travel abroad to study cases of cluster
and support clusters in a particular region” (Hospers & promotion perceived as best-practice, or invite their peers
Beugelsdijk 2002: 382). Their degree of public agency to give presentations. Within the German-speaking area,
sets them apart from business-led cluster initiatives in for instance, politicians and practitioners tend to refer to
which cluster firms assume centre stage, while govern- Upper Austria as a source of inspiration, and as an occa-
ment and/or the research community only play a support- sional destination for policy tourism.
ive role (cf. Sölvell et al. 2003: 31). In the European context, the Commission plays a cen-
tral role in disseminating best practice and promoting
Knowledge economy – from technology policy to policy-learning across borders. This aim is generally pur-
triple helix relations sued through the open method of co-ordination and the
The global spread of the cluster concept in policy and principle of yardstick competition. As for cluster policy,
practice can be explained by a set of common challenges the Commission focuses on mapping, the identification
faced by countries and regions at all stages of develop- and dissemination of best practice, the provision of plat-
ment. First and foremost, globalisation exposes nations forms for know-how exchange between policy-makers
and regions to intensified locational competition, which and practitioners, as well as on cross-border networking
in turn accelerates structural change and promotes the of clusters. Under the Commission’s Europe INNOVA
competitiveness of such territories to a new paradigm for Initiative, the installation of a High Level Advisory
economic development (cf. Siebert 2005, Martin et al. Group on Clusters led to the European Cluster Memoran-
2006). Further challenges include the transition of ad- dum as a common agenda for cluster policy action signed
vanced industrial countries into knowledge economies in January 2008.
38

3. Structural Change in Europe – Innovative City and Business Regions
Central or federal – path-dependent learning –––––––– Country Case Studies: Germany ––––––––
Despite these significant forces of convergence, struc-
tural and institutional differences between nations and re- To prevent any return to centralism after World War II,
gions mean that there is no such thing as a one-size-fits-all Germany was founded as a federal republic in 1949. As a
cluster policy. Furthermore, cumulative and path-depend- consequence, all 16 federal states pursue autonomous
ent learning by doing in policy and practice contribute to cluster policies today, but for brevity’s sake this paper can
persisting variety not only in the interpretation and appli- only focus on the federal level. Associated with the co-or-
cation of the cluster concept, but also in the rationales and dinated nature of its market economy, Germany’s system
targets of cluster polices. Cluster policies emerge at the of innovation is focused on incremental innovation and
interfaces of hitherto isolated policies, especially science diffusion, but has comparative weaknesses in radical and
and technology policy, industrial policy, and regional breakthrough innovations, such as biotechnology (cf.
policy which converge into regionalised innovation poli- Casper 2007). German policymakers praise the country’s
cy. A first source of international variety is thus the policy research excellence, but lament that German inventions
area which embraces the cluster notion first and most such as the MP3 standard are often commercialised
forcefully, and how well these formerly separate policies abroad. Clusters are hence seen as vehicles to bridge the
are integrated. Further institutional variety may be expected perceived gap between science and industry to accelerate
from the role of the state, and a country’s centralised vs. innovation. However, a too consequent spatial concentra-
federal set-up. tion of public resources is at odds with Germany’s tradi-
The role attributed to the public vis-à-vis the private tionally redistributive regional policy, given that spatial
sector is prominently captured by the concept of varieties equity is a constitutional goal. Unification in 1990 sud-
of capitalism that places market economies on a spectrum denly increased spatial disparities in productivity and in-
reaching from liberal on the one hand to co-ordinated on novative capabilities. Technological and socio-economic
the other (Hall & Soskice 2001). While the United States convergence of the new Länder towards the West German
are commonly regarded as the archetypal liberal market level is a special priority of federal government since, and
economy, this model is best represented by the United a regionalised innovation policy including the promotion
Kingdom (UK) within the EU. Co-ordinated market econ- of cluster structures in the new Länder is one way of
omies are epitomised by continental European countries pursuing this aim.
like France or Germany. The degree of centralisation vs. Federal government started to embrace the cluster
federalism is the third major source of variety since cluster concept with the BioRegio contest in 1995, an attempt to
promotion is a typical case of multi-level governance, as jump-start Germany’s embryonic biotech industry. Policy
it is pursued at all administrative levels from the suprana- lessons learnt from BioRegio were adapted to promote
tional via nations and regions all the way down to the eco- innovative capabilities in the new Länder with the Inno-
nomic development efforts of cities and municipalities Regio initiative in 1999 and the subsequent Entrepreneurial
(cf. Bovaird et al. 2008, Burfitt & MacNeill 2008, Conzel- Regions family of programmes. The federal government’s
mann & Smith 2008). Varieties of capitalism and federal- cluster policy received its most recent impetus with the
ism are thus expected to directly translate into distinct leading-edge cluster competition in 2007, which is part of
styles of cluster promotion that would ultimately determine a broader High-Tech Strategy for Germany.
the scope for cross-country policy learning.
To illustrate this variety, three countries have been se- The BioRegio contest
lected as case-studies for cluster promotion at the national Germany’s federal government got hooked on the
level. From a varieties of capitalism perspective, the UK cluster notion in the mid-1990s when trying to promote
is an obvious choice as it comes closest to the liberal ver- its fledgling biotechnology industry which was estimated
sion of a market economy, while Germany and France are to lag twenty years behind the U.S. and ten years behind
the two largest economies of the ‘old’ continental Europe. the UK at that time (Cooke 2001: 267). The experience
On the centralism-federalism axis, Germany was purpose- of those countries suggested that clusters like San Diego,
fully founded as a federal republic, while the UK and Boston or the English Cambridge were important sources
France have all embarked on varying decentralisation of national competitiveness in biotech. To close this gap,
efforts, but their centralist past is still far from a distant federal government decided to leverage on the competi-
memory. tive potential of federalism. In 1995, the BioRegio contest
39

4. Structural Change in Europe – Innovative City and Business Regions
was launched to identify and promote Germany’s most were selected by an independent jury, and 23 ultimately
promising potential biotech clusters (cf. Dohse 2007). qualified for funding. Convinced by the success of Inno-
17 regions entered the contest, and in November 1996, Regio, the federal ministry differentiated the initial con-
Munich, the Rhineland and the Rhine-Neckar area cept into a whole new family of programmes called Entre-
emerged as winners, with a special vote awarded to Jena preneurial Regions (Unternehmen Region) to support
in the new federal state of Thuringia. The three winners innovative networks in the new Länder.
received around 25 million € each over five years, plus
preferential access to R&D funding from the federal Bio- The Spitzencluster competition
technology 2000 programme. In September 2006, Germany’s federal government for
the first time announced an inter-ministerial high-tech-
However, it is worth pointing out that not only these strategy (BMBF 2006). Of 14.6 billion € earmarked for
winners benefitted from the competition. The contest mo- 2006–2009, 11.94 billion € are designated for a set of 17
bilised actors in most other regions, too, with the effect industries and technologies, while the remaining 2.66
that by the mid-2000s, there were 25 regional networks billion € are reserved for generic measures of innovation
and cluster initiatives and five state-level associations in policy. Of the latter, 600 million € are earmarked for
charge of regional biotech promotion (BMBF 2005: 5). measures to join the forces of science and industry, of
Some of them received support from subsequent pro- which the leading-edge cluster competition (Spitzencluster-
grammes like BioFuture, BioChance and BioProfile wettbewerb) is the key thrust. The aim is to promote up to
(Dohse 2007: 77 f.), but it remains questionable if the 15 already well-developed clusters irrespective of technol-
almost ubiquitous promotion of biotech networks is the ogy or industry in three rounds over a period of five years.
most efficient way of growing internationally competitive Essentially, this means an extension of the BioRegio con-
clusters. However, the BioRegio contest is now regarded cept beyond the narrow confines of the industry. Conse-
as an important vehicle to jumpstart the biotech industry quently, the aims are the same: to identify and strategically
in Germany which scored spectacular growth in the sec- promote clusters to achieve leading positions in interna-
ond half of the 1990s, although this was helped by legis- tional competition, to accelerate the commercialisation of
lative changes, a favourable business cycle and ample new knowledge, to stabilise and create growth and employ-
supply of venture capital. Following the burst of the New ment, and to make Germany a more attractive business
Economy bubble in 2000/2001, the industry consolidated location. Following the first call for applications in August
at around 400 companies with about 10,000 employees 2007, 38 regional projects applied by the closing date in
(Ernst & Young 2008). December. A dozen of those projects qualified for the final,
before the winners of the first round were disclosed in
The InnoRegio contest September 2008:
In the mid-1990s, the initial convergence of the new
Länder vis-à-vis West Germany had come to a halt, and • Cool Silicon – Energy Efficiency Innovations from
significant disparities in innovative capabilities and eco- Silicon Saxony
nomic wealth threatened to become very persistent. The • Solarvalley Mitteldeutschland
federal Ministry of Education and Research thus adapted • Aviation Cluster in the Metropolitan Region of Hamburg
its acclaimed BioRegio model to the specific needs of the • Forum Organic Electronics in the Rhine-Neckar
new Länder: While BioRegio strove for the mobilisation Metropolitan Region
of regional assets for the benefit of national competitive- • Biotech-cluster “cell-based and molecular medicine”
ness, the InnoRegio contest was designed to narrow the in the Rhine-Neckar Metropolitan Region.
gap between the eastern and the western states. In contrast
to BioRegio, the new contest was not only confined to the These five winners qualify for a total funding of up to
new Länder, but also open to all industries and technolo- 200 million € over a five-year period. While the first two
gies. In 1999, the initial call triggered 444 applications winners are from the new Länder, the bottom project was
from diverse consortia of individuals and organisations filed by one of the BioRegio winners, regional network
such as businesses, research, education, politics, public BioRN. Soon after the first round of selection was com-
administration and associations at the sub-state level pleted, the call for the second round was issued in January
(Dohse 2007: 75 f.). Out of these applications, 25 projects 2009, with the application period closing in April.
40

5. Structural Change in Europe – Innovative City and Business Regions
Contest 0 100 km
Cartography: Stephan Pohl
BioRegio (1996)
InnoRegio (1999)
BioProfile (2001)
Kiel
Spitzencluster (2008) Schleswig- Rostock 18
Holstein Greifswald 11
Metropolregion Mecklenburg-
Hamburg Wismar 22 Western Pomerania
Aviation Schwerin
Hamburg
Parchim 17
Lower Bremen
Brandenburg
Saxony Braunschweig / Göttingen / Hennigsdorf 12
Hannover Gardelegen 9
Buch 2
Funktionelle Genomanalyse
Hannover Potsdam Berlin
Braun- Barleben 1 18 Wildau 21
schweig Magdeburg
13, 14 Potsdam / Berlin
Gatersleben 10 Genomforschung &
Pflanzenbiologie
North Rhine- Saxony-
Westphalia Göttingen
Anhalt
Dresden
Düsseldorf Solar Valley Mitteldeutschland Cool Silicon
Energy
BioRiver Saxony Efficiency
Erfurt 5 6 Innovations
Köln 7 Jena
Ohrdruf 16
Freiberg 8 Dresden
Aachen Bonn Zwickau
Chemnitz
Schmalkalden 20 BioInstrumente Jena 3, 4
23
Hesse Thuringia Markneukirchen
15
Rhineland- Wiesbaden
Palatinate Mainz
BioRegion Metropolregion Rhein-Neckar
Rhein- - Forum Organic Electronics
Neckar-
Dreieck - Bio RN Cell-based & Molecular Medicine
Saarland
Ludwigshafen Mannheim
Saarbrücken Heidelberg
Bavaria 11 Diabetes Informations- und
Service-Center DISCO
1 MAHREG Innovationsnetzwerk Stuttgart Esslingen 12 RIO - Regionales
AUTOMOTIVE Tübingen Reutlingen Innovationsbündnis Oberhavel
2 Gesundheitsregion Berlin-Buch 13 Innovationspotential Börde
Region Stuttgart /
3 Innosachs Innovationsregion (REPHYNA)
Mittelsachsen
Neckar- Neckar-Alb 14 INNOMED Innovative
4 INNTex Textilregion
Alb Bioregion STERN Medizintechnologien
Mittelsachsen Regenerations- München 15 Musicon-Valley
5 BioMeT - Innovationsnetzwerk Baden- biologie 16 Barrierefreie Modellregion für
Dresden Württemberg BioRegio Integrativen Tourismus
6 KONUS - Kooperative Nutzung München 17 NUKLEUS - Netzwerk
von Datennetzen Präzisionsmaschinenbau
7 Bautronic 18 BioHyTec
8 RIST: Mit neuen Netzen zur 19 Maritime Allianz
Wissensregion 20 inprosys
9 NinA Naturstoff- 21 FIRM
Innovationsnetzwerk Altmark 22 Kunststoffzentrum
10 InnoPlanta Westmecklenburg
Pflanzenbiotechnologie 23 IAW 2010 - Industrie- und
Nordharz/Börde Automobilregion Westsachsen
The winners of Federal Government cluster contests in Germany, 1996–2008
41

6. Structural Change in Europe – Innovative City and Business Regions
0 100 200 km global clusters
Boulogne-sur-Mer 66
Arques 62 Lille 19 / 17, 24, 54 national clusters
Le Havre 61
Rouen 23 Laon 18
Lannion 15 Caen 37
Mondeville 13
Brest 30
Paris Metz 50
6, 14, 34, 48 / 4, 39
Rennes 38, 42
Chartres 8 Strasbourg 3
Orléans 10 Epinal 45
Nantes 12, 41, 59 Angers 55
Cholet 65 Mulhouse 56
Tours 70
1 Aerospace Valley
Dijon 58, 67
Besançon 49
2 Agrimip Innovation
3 Alsace Biovalley
4 Astech Paris Région Poitiers 63
5 Axelera
6 Cap Digital Paris Région Limoges 11, 29 Oyonnax 28
7 Capénergies
8 Cosmetic Valley Chappes 44
9 Derbi
Annecy 40
10 Elastopôle Clermont-Ferrand 60
11 Elopsys Lyon 5, 21 / 16, 20, 35
12 EMC2
13 Filière équine Bordeaux 32, 47, 68 Saint-Étienne 57, 71
14 Finance innovation Grenoble 22, 36
15 Images et réseaux
16 Imaginove
17 Industries du commerce
18 Industries et agro-ressources Pont-Saint-Esprit 53
19 i-Trans Vocation
20 Lyon Urban Truck&Bus Avignon 51 Sophia Antipolis-
21 Lyonbiopôle Toulouse St-Paul-lez-
22 Minalogic 2, 43 / 1 Durance 7 Rousset 33
23 MOV‘EO
24 Nutrition Santé Longévité Montpellier
69 Marseille Aix-en- Grasse 64
25 Optitec Provence 46
26 Orpheme 25, 26, 27
Perpignan 9 Toulon 31
French Guiana Guadeloupe
Reunion
St-Denis 52
0 200 km 0 50 km 0 50 km
Source: DGE/DIACT, quoted in Longhi 2008, p. 33
Cartography: Stephan Pohl
27 Pégase 42 Automobile haut de gamme 57 Viaméca
28 Plastipolis 43 Cancer-Bio-Santé 58 Vitagora
29 Pôle européen de la céramique 44 Céréales Vallée 59 Génie civil Ouest
30 Pôle Mer Bretagne 45 Fibres Grand‘Est 60 InnoViandes
31 Pôle Mer PACA 46 Gestion des risques 61 Logistique Seine Normandie (Nov@log)
32 Route des lasers 47 Industries et pin maritime du futur 62 Matériaux à usage domestique (MAUD)
33 Solutions communicantes sécurisées (SCS) 48 Medicen Paris Région 63 Mobilité et transports avancés
34 System@tic Paris Région 49 Microtechniques 64 Parfums, arômes, senteurs, saveurs (PASS)
35 Techtera 50 Matériaux innovants produits intelligents (MIPI) 65 Pôle Enfant
36 Tenerrdis 51 Pôle européen d‘innovation fruits et légumes 66 Pôle filière produits aquatiques
37 Transactions électroniques sécurisées (TES) 52 Qualitropic 67 Pôle Nucléaire Bourgogne
38 Valorial 53 Trimatec 68 Prod‘Innov
39 Ville et mobilité durables 54 Up-Tex 69 Q@LI-MEDéditerranée
40 Arve Industries 55 Végépolys 70 Sciences et systèmes de l’énergie électrique (S2E2)
41 Atlantic Biotherapies 56 Véhicule du futur 71 Sporaltec
France’s Pôles de Compétitivité, 2008
42

7. Structural Change in Europe – Innovative City and Business Regions
Policy learning – yet conflicting aims The Systèmes Productifs Locaux
Federal innovation policy in Germany has firmly em- The Systèmes Productifs Locaux (SPL) programme
braced the notion that national competitiveness depends was launched as part of French regional policy in 1998 to
on localised assets. To unleash the hitherto underutilised promote clusters of small and medium-sized enterprises
potential of competitive federalism, the federal govern- (SMEs) in low-technology sectors and in peripheral areas
ment employs contests as a device for discovery and mo- (OECD 2007). Such industrial districts were required to
bilisation, and shows signs of cumulative policy learning exhibit a concentration of activities in a specific industry,
when differentiating initial concepts like BioRegio and a high level of inter-firm linkages, supporting infrastruc-
InnoRegio into entire programme families. Owing to the ture and operators qualified to stimulate interaction. Out
power of the Länder in Germany’s federal set-up, federal of 180 business plans submitted by co-ordination bodies,
government acts as a facilitator by organising competi- 96 were initially selected, with two more specific calls to
tions and selecting regions, but does not intervene in state follow in 2001 and 2003, respectively. A typical SPL con-
policies, nor is it actively involved in programme man- sists of around 100 SMEs, of which between 30 and 40
agement which is left to the federal states or to independ- actually participate in collaborative projects. Co-operation
ent agencies. However, it may be criticised that the pre- with a university or research institute is encouraged but
vailing approach promotes intraregional networks at the no funding requirement. Central government funds up to
expense of interregional and international networking, 3.6 million € per SPL for collective management expenses
and that the InnoRegio family to promote innovation net- to engage local actors, but SPL receive most of their fund-
works in the new Länder is intrinsically trapped between ing from other sources. Many of them are networked in
the conflicting aims of growth and competitiveness on the the Club des Districts Industriels Français (CDIF), a vol-
one hand, and spatial equity on the other. untary association of French industrial districts.
––––––––– Country Case Studies: France ––––––––– The Genopole programme
Akin to Germany’s BioRegio initiative, the French
In sharp contrast to Germany’s federal system and poly- government embarked on its Genopole programme in
centric spatial structure, France has a long history of cen- 1999 to spur the commercialisation of life sciences. The
tralism and dominance of its capital region Île de France. support of innovation networks was expected to boost
This is still evident today despite the decentralisation France’s competitive position in life sciences through scien-
thrust initiated in 1982. While industrial policy tradition- tific advances and improved science-industry relationships
ally promoted large firms as national champions, technol- (Quéré 2008). Following a call for applications in 1999,
ogy policy used to follow the linear model of innovation eight Genopoles were selected in 2000, and a further two
through Grandes Programmes or the open science model in 2001. The government spent around 75 million € on the
(Brette & Chappoz 2007). In regional policy, France pio- establishment of technological platforms for co-operation
neered the promotion of growth poles in a tradition linked over the first three years and promoted a nationwide divi-
to the works of Francois Perroux in the 1950s, but that sion of labour between the ten specialised Genopoles.
approach fell into disgrace with the demise of industrial Three main assessments carried out between 2001 and
policy in the 1980s (Longhi & Rainelli 2007: 2 f.). More 2003 found that the initiative did have some impact on the
recently, the government responds to perceived weakness- science infrastructure and improved the networking of
es in high-tech industries as highlighted by Beffa (2005), scientists. However, the programme’s economic impact
a lack of collective processes involving firms, universities appeared unsatisfactory since networks were dominated
and research, and to the Lisbon agenda by e.g. adding a by academic actors and raised output mainly in the form
competitiveness dimension to its regional policy from of academic publications. Most Genopoles outside the
1999 and 2002 onwards. Central government in France Île de France region still lack a critical mass of firms and
first embraced the cluster approach with a programme to hence failed to mobilise public funding.
support local production systems in 1998 and responded
to the German BioRegio example with a Genopole initia- The Pôles de Compétitivité
tive to spur the commercialisation of life sciences in 1999, First outlined by the French regional planning Author-
before embarking on its massive Pôles de Compétivité ity DATAR (2004, now DIACT = Interministerial Delega-
programme in the mid-2000s. tion for Territorial Competitiveness and Attractiveness),
43

8. Structural Change in Europe – Innovative City and Business Regions
the Pôles de Compétitivité programme was originally maining 18.3% of Pôles were found not to have met their
designed to improve the international competitiveness of targets, they were thus recommended for a reconfigura-
10–15 clusters. However, a call for proposals in September tion. While Pôle status will expire for the latter group af-
2004 stimulated 105 project applications, of which 67 ter one grace year at the end of 2009, the first two groups
clusters were ultimately selected. This figure was further will remain eligible for funding under the Pôles 2.0 pro-
increased to 71 in a second round in 2007. The expansion gramme that is endowed with another 1.5 billion € from
of the original programme design meant that the orienta- 2009 to 2011.
tion towards international competitiveness had to be com- Academics are more critical about the Pôles pro-
promised. As a result, only six clusters were classified as gramme than the official evaluation commissioned by the
international, with ‘international orientation’ attributed to French government. Longhi & Rainelli (2007) acknowl-
a further nine, adding up to the number originally targeted. edge a positive mobilisation effect since most Pôles did
The remainder consists of 15 inter-regional and 37 regional not have formal co-operation structures prior to their ap-
clusters. Spatially, the programme was expanded from the plication. Furthermore, the programme has improved poli-
most competitive clusters nation-wide to include applicants cy co-ordination within and across the various level of
from almost all regions across the country, which means a government, including a diffusion of knowledge on clus-
shift from national to regional objectives. Sectorally, this ter promotion. Their main critique, however, surrounds
inflation led to the inclusion of industries like meat the inflation of clusters supported by the programme. A
processing and construction (OECD 2007: 191). It is no committee staffed mainly by civil servants rather than
surprise that the most advanced “global competitiveness business representatives selected many former low-tech
poles” can be found in those regions commonly known SPL which have thus been relabelled Pôles, while other
for their outstanding technological capabilities, i.e. Île de Pôles would rather suit the definition of SPLs rather than
France (Medicin Paris Region, System@tic, Finance), the original understanding of Pôles. As a result of their
Rhône-Alpes (Lyonbiopole, Minalogic), Midi-Pyrénées heterogeneous economic and innovative capabilities, the
(Aerospace Valley) and the Provence-Alpes-Côte d’Azur 71 clusters scored very differently on the generation of
(Secured Communication Solutions). R&D projects. Further critique include the tight time-
A Pôle typically includes up to a handful of very large frame of the application process, the dominance of large
firms, up to hundreds of SMEs, and three to four institu- firms in many clusters, different expectations especially
tions of higher education and research institutions, respec- between large firms and SMEs, governance structures
tively. Responding to the expansion of the programme, complicated by a multiplicity of oversight bodies, as well
central government doubled its funding from 750 million as a lack of inter-cluster networking. To improve their
€ originally earmarked for 10–15 international clusters to chance for selection, applicants moved towards the forma-
1.5 billion € for 67 Pôles over three years, which may be tion of larger areas, leading to a gradual shift from region-
topped up by EU, regional and local government funds. al towards national clusters. In sum, the Pôles de Com-
80% of this funding is reserved for the 15 clusters with at pétitivité programme integrates top-down elements
least international orientation, while only 11 million € go (initiation, selection of Pôles) with a bottom-up approach,
into the cluster management of the Pôles, averaging around but the decision on R&D funding remains a centralised
55,000 € per cluster and year. The bulk of the money is and very demanding multi-step process: “The label pole is
used as competitive funding for projects accessible for not a guarantee of financing, it is only a prerequisite to
consortia of at least two firms and one research institute compete for subsidies” (Longhi/Rainelli 2007, S. 11).
from a territory designated as Pôle, the demarcation of Despite a quarter-century of decentralisation effort, the
which was part of the Pôle’s initial application (Longhi & French government’s recent cluster policy is still marked
Rainelli 2007: 10). by a considerable degree of centralism.
Evaluation of the Pôles programme ––––– Country Case Studies: United Kingdom –––––
Between November 2007 and June 2008, the Pôles
programme has been subject to an official evaluation Within the EU, the United Kingdom is the most promi-
(BCG & CM International 2008). It was found that 54.9% nent case of a liberal market economy. While centralism
of the Pôles achieved their policy targets fully, while a reached its latest climax under the Thatcher administra-
further 26.8% achieved them partially at least. The re- tion, New Labour engaged in a major devolution effort
44

9. Structural Change in Europe – Innovative City and Business Regions
from 1997 by decentralising powers to the Devolved sport Development UK which pulls together the four
Administrations (DAs) in Scotland, Wales and Northern RDAs covering England’s Motorsport Valley (cf. Aston
Ireland, as well as to the Regional Development Agencies 1998). Cluster initiatives supported by RDAs include
(RDAs) in England. In general, UK policy has a strong high-tech and more traditional industries alike and com-
focus on improving labour productivity by removing ob- bine a range of activities from regional mapping studies
stacles to innovation, skills and infrastructure. As part of via the identification and forging of links with important
this overarching thrust, regional policy focuses on improve- regional clusters to employing clusters as vehicles for wider
ments in lagging regions which are seen as a drag on economic development initiatives (OECD 2007: 318).
national productivity and income levels in the light of an
ever-deepening North-South divide. Flexibility at the expense of strategic coherence
Mirroring the French situation, the UK way of cluster
DTI – top-down mapping and best practice manual promotion retains a significant degree of central control
While Scottish Enterprise has been a European pioneer despite noticeable devolution. It is through their funding
of cluster policies in the early 1990s (cf. Brown 2000), that regional institutions such as DAs and RDAs remain
Whitehall did not open its doors for clusters until the De- “closely linked to and strongly associated with central
partment of Trade and Industry’s 1998 Competitiveness government” (ibid: 315). However, there are significant
White Paper included an enquiry into the UK’s biotech differences to France: In line with the UK’s classification
clusters. From 1999 to 2003, a High-level Cluster Policy as a liberal market economy, cluster policy does not in-
Steering Group looked at barriers to cluster development volve top-down prescriptions but rather provides a flexible
and recommended appropriate policy measures. This was framework for cluster promotion through the regional
accompanied by a top-down cluster mapping exercise that agencies. The cluster concept is used intensively for map-
identified a total of 154 ‘clusters’, amounting to between ping and localisation of industrial dynamics, but less for
eight and 18 per UK region. These clusters accounted for specific policy action. Although the UK pioneered the use
43 per cent of regional employment in London, but only of the cluster idea through Scottish Enterprise in the early
15 per cent in the North West (DTI 2001: 8 f.). The DTI’s 1990s, cluster policy remains “a peripheral isolated area
2001 White Paper “Opportunity for all in a World of of piecemeal policy development” (Borrás & Tasgdis
Change” encourages the newly-formed RDAs to develop 2008: 89). RDAs are the lead agencies in charge of cluster
existing and embryonic clusters in their regions. The DTI promotion, but since they are fraught with a wide range of
stresses that the focus should be on creating favourable tasks, cluster policy has to compete with issues like lifelong
conditions for the formation and growth of clusters, but learning or the ageing workforce for attention. Under a
not on attempting to create clusters artificially. It promotes liberal framework, the greater flexibility in cluster promo-
clusters to RDAs as a key instrument to support business tion obviously comes at the expense of strategic coherence.
excellence and to promote innovation. Initially, the DTI
tied its funding of RDA cluster initiatives to the results of –––––– National Styles of Cluster Promotion ––––––
its 2001 mapping exercise. However, following two years
of consultation the RDAs decides to pursue cluster poli- What scope for cross-border policy learning?
cies autonomously of the DTI to better suit their regional Cluster promotion represents a textbook case of multi-
needs (Borrás & Tsagdis 2008: 90). To provide guidance, level governance involving supra-national, national, re-
the DTI (2004) issued a best practice manual on cluster gional and local actors and hence the interaction of top-
development which highlights functioning networks and down and bottom-up policies. This is evidenced by all
partnerships, a strong innovation base with supporting country cases studied in this paper, irrespective of their
R&D activities and a strong skills base as the most critical variety in terms of capitalism and federalism. Despite
success factors. decentralisation efforts in the UK and France, top-down
elements in the cluster policies of both countries remain
RDAs – a range of different cluster initiatives stronger than in an originally federal country like Germany.
The flexibility of the DTI-RDA framework has encour- Varieties of capitalism help explaining why the UK ap-
aged a rather diverse set of regional initiatives ranging proach provides a flexible framework for cluster promo-
from single RDA projects to collective cluster initiatives tion, but lacks strategic coherence. However, this does not
involving the joint effort of several RDAs such as Motor- necessary imply that the more co-ordinated efforts of
45

10. Structural Change in Europe – Innovative City and Business Regions
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