Cluster-based Innovation Policies: A Critical Approach

Abstract

Following the shift to a knowledge-based economy, designing and implementing the right institutions relevant to knowledge production has become the main concern of national industrial policies. Regional clustering appears as a commonly adopted policy tool to promote innovation in developed countries as well as in developing countries. In this regard, this paper examines innovation process in detail and explores the instruments that cluster-based innovation policies must support for promoting innovation. Innovation process may require particular coordination mechanisms at cognitive, institutional and social levels. I first draw a conceptual framework to define the essential aspects that need to be favored by innovation policies. This framework is then used to propose instruments of cluster-based innovation policies. While the idea of regional innovation clusters is mainly based on the geographical dimension of successful innovative activities, the success of clusters depends essentially on coordination mechanisms among the actors involved in the innovation process. Putting forward mostly financial incentives for companies isn't enough for clusters to sustain innovation. These clusters may only continue to promote transient innovation activities and not become the focal of a “learning region”, unless they get embedded into a more complex relational setup.