OECD Reviews of Regional Innovation: Regions and Innovation Policy

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In some cases, the policy interventions are explicitly called cluster policies. In many others, the main features of the cluster concept are present but the term cluster is not used. These programmes have the objective of reinforcing regional specialisation by supporting linked industries in a geographical location and by emphasising stronger interactions among different public and private actors. To better understand why there is renewed interest in clusters, this chapter reviews:.

Chapter 2. Where Do the Programmes Originate? Policies that support regional specialisation and clusters are at the intersection of several different policy families, which helps explain the increased policy interest. The goals, programmes and instruments used in these policy areas may serve to support regional specialisation by favouring greater linkages among firms and research institutions.

The orientation of the policy family behind the cluster policy serves to frame the objectives, targets and scope of the policy see Table 2. In some cases, the policy may be clearly flowing from only one policy source within the country, but in most cases it is integral to one policy strand but clearly related to others. Chapter 3. How do programmes pick participants? The economic rationale for government intervention underlies the different choices regarding programme targets. Those targets may be places, sectors or specific actors or groups of actors see Figure 3.

They could also be a combination of these different target categories. The targets then need to be clearly identified to ensure that the resources available for the programme are adequate and that goals are achievable. The choice of selection mechanisms is a key first step and needs to be consistent with the objectives. This chapter will discuss the following themes:.

Chapter 4. The instruments to implement policies and programmes supporting regional specialisation and clusters seek to capitalise on the theoretical benefits described in Chapter 1. This chapter discusses:. The level of government best suited to initiate, implement or fund a policy depends on the governance frameworks as well as the nature of the policy.

In the case of regional specialisation and clusters, there are economic rationale for all levels of government local, regional, national and in some cases supra-national to support such policies. Furthermore, different levels of government have available different sets of competencies and tools and in turn reap different degrees of benefit. There is a long list of challenges to evaluating the effectiveness of policies to promote clusters and regional specialisation. There is a lack of agreement on how to define a cluster.

The public financial resources allocated to most programmes are often modest, especially relative to the ambitious goals. Classic problems of causality in evaluation are exacerbated in the context of clusters and their ultimate impact on regional development.

Nevertheless, based on some programme evaluations and a review of these OECD programmes there are definitely lessons to be learned. This chapter focuses on:. Part II. Part II of this publication is a series of case studies for 14 countries that cover 26 programmes or policy approaches that have a cluster-based focus. A summary of these programmes is found in the Table below.

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Related Documents. To better understand why there is renewed interest in clusters, this chapter reviews: Clusters and related concepts: moving beyond definitions. The origins of the cluster concept are not new, but there are many variations on the definition of what constitutes a cluster, a regional innovation system and other related concepts.

Theoretical cluster benefits and risks. Clusters offer a number of potential benefits, beyond lower production costs, that lead to innovation and productivity growth. Nevertheless, there are risks to consider regarding public support of clusters. Globalisation and the nature of clusters.

OECD Reviews Of Regional Innovation

Intermediating institutions, often with funding from both public and private sources, have often provided the way forward. What sets the United States apart from most other industrial nations is that there is no overarching national innovation strategy to support, much less coordinate, disparate initiatives to build commercially oriented industries. Vest concludes that the U. It is not designed or planned very explicitly.

5 Conceptual Basis for Regional Development Theories (Examrace - Dr. Manishika)

Vest notes, it has worked remarkably well at producing commercial products, processes, and services. Paradoxically, this complexity with its many opportunities for entrepreneurship may be a major strength of the U. Indeed, Nobel laureate economist Elinor Ostrom has extensively documented the adaptive advantages of open, institutionally diverse systems over linearly designed systems. The front end of any innovation system is research and development.

As noted in Box 1. Given the complex and multifaceted nature of innovation, policies to encourage innovation need to reflect this reality. This includes business regulations that are simple and transparent as possible, consonant with public policy objectives such as health and environmental safety. Support for innovation also requires our attention to common barriers that can forestall the cooperation needed to bring new ideas to the marketplace.

OECD Reviews of Regional Innovation: Regions and Innovation Policy - OECD

For example, cultural barriers often separate those in industry from academia, where the focus is more on understanding basic phenomenon than on achieving concrete results. Cooperation can also stall when there are information asymmetries—situations where some have better or worse information than others in a potential transaction. Indeed, the economics literature has identified a variety of contexts where the wrong incentives lead to a failure of cooperation. Pro-innovation policies need to strengthen the framework conditions but also address these barriers to innovation. Successful American innovation policies do just that.

The Bayh-Dole Act, for example, encourages innovation by changing the incentives faced by university faculty and administrators. Stiglitz, Leonid Hurwicz, Eric S. Maskin, Roger B. Myerson and Elinor Ostrom, among others. And the competitive evaluations of the Small Business Innovation Research program SBIR create new information for use by market participants about the technological and commercial potential of new ideas. This overwhelming advantage is starting to slip, however.

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America once was the most research-intensive nation on earth. See also Battelle, op. Battelle estimated U. The Chinese government reports somewhat different estimates of 1. The composition of the U. FY data are preliminary. The reasons for this are multiple and typically revolve around the role that governments around the world play to protect and nurture their domestic industries. The first has to do with markets and market access—with related government subsidies and inducements—for commercializing new technologies.

A second major aspect of this relates to favorable access and terms for investment capital. The third factor is infrastructure provision and support, where some high tech industries— notably the semiconductor industry—require billions to set up new plants. A fourth reason relates to taxes and other financial incentives provided by some governments. Leonard found.

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