The surrogate model of cluster creation: The case of Mubadala in Abu Dhabi

Abstract

The extant literature on cluster development focuses largely on 'clusters' where businesses are co-located along a supply chain to facilitate territorial concentration of a certain economic activity. This paper presents an inverse model of 'cluster development' strategy pioneered by the Emirate of Abu Dhabi. This model is coined as the 'surrogate mother' whereby the seeds for a new industry are initially planned in more 'fertile' offshore locations, with the intention of transferring knowledge and 'spill-back' home at a later phase. The paper introduces the case of Abu Dhabi as an experiment in cluster development and provides an early examination of experience to date in the light of the cluster life-cycle framework. We find that while this model remains an experimentin- progress, it serves as a good source of learning for other resource-abundant economies seeking industrial renewal and/or greater economic diversification.