The cluster controversy – a Finnish point of view…

…provided at lightning speed by our friend Jorma Nieminen:

Regarding the emergence of industry clusters, in my understanding clusters have been around way before governments tried to do anything intentional about them. If we read classical cluster researchers like Michael Porter or Allen Scott, for instance, they describe mechanisms affecting cluster emergence, and governments are not part of those stories. Neither are they in e.g. Pouder & St. John, proposing a natural life cycle for clusters, that often self-destruct due to endogenic reasons. In extant cluster research, entrepreneurs are at the centre just like Brad Feld argues. The trick is to get entrepreneurs do their entrepreneuring, because (most?) often they do not do it. In that, there may be a general role for governments in creating a favourable societal and business climate to attract entrepreneurs, especially experienced ones. The extant research agrees with Brad Feld in that artificial too-late-me-too attempts to jump-start clusters around the latest technology or business fad are as a rule doomed.

 But what governments can do, as one definite example, is to proactively initiate and invest in a novel macro-level societally useful service with global demand potential. That may, under certain boundary conditions, attract entrepreneurs and investments, and, in the best case, kick-start a national industry cluster with international growth potential. This is precisely what happened in Finland from the late 1960s onwards about mobile telephony. The governmental agency doing the trick was PLH, the local PTT organisation, and initially it was very much non-intentional in regard of cluster-creation. PLH just wanted to create a novel useful service for Finland, and the industry cluster emerged around it by entrepreneurial action. The cluster activity soon spread around, encompassing next the Nordic NMT service, and then the GSM, initially a European but soon a global service.

So, in sum, neither clusters nor governments are something to shun and be afraid of. Both are needed, and sometimes the latter can do things conducing to the former. 

Jorma Nieminen, 15.7.13

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I run an advanced Masters programme on project management and innovation at ESIEE
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