Growing Innovation Clusters for American Prosperity Summary of a Symposium (2011) / Chapter Skim
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GROWING CLUSTERS FOR AMERICAN PROSPERITY: OVERVIEW
GROWING CLUSTERS FOR AMERICAN PROSPERITY: OVERVIEW
Pages 3-28
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Cortright, Making Sense of Clusters: Regional Competitiveness and Economic Development, Washington, DC: The Brookings Institution, 2006.
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innovation clusters has led to widespread interest in creating and encouraging the development of new clusters as a means of creating jobs and spurring competitiveness. To this end, local, regional and national governments around the world are implementing programs and policies to create, develop, and strengthen locally focused networks among businesses, universities, research and development organizations, and philanthropic foundations.7 A recent study by the Brookings Institution documents national cluster 4 See National Research Council, Understanding Research, Science and Technology Research Parks: Global Best Practices, Charles W
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Reynolds, and Andrew Reamer, "Clusters and Competitiveness: A New Federal Role for Stimulating Regional Economies," Washington, DC: Brookings Institution, April 2008. 9 China's research parks vary in size and mission, but many are very large in scale.
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To address this apparent gap and to adjust to the changing international competitive environment, some advocates have called for the federal government to play a more active role in supporting the development of local innovation clusters.12 Speaking at the National Academies symposium on "Growing Innovation Clusters for American Prosperity," Susan Crawford, then of the White House Office of Science and Technology Policy, said that the Obama Administration is "committed to the idea of regional economic clusters and their role in economic growth and innovation." She noted that innovation "cannot happen top-down alone, or bottom-up alone," suggesting instead that the federal government's role may be to provide a "kind of trellis" that supports the growth of entrepreneurial offshoots in the nation's states and localities.13 This volume is based on the National Academies symposium on innovation clusters. The symposium included discussions on the nature of clusters, descriptions of the experiences of several states in cluster development, and views on the role of the federal government in supporting clusters.
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15 As Tödtling and Trippl note, "innovation should be seen as an evolutionary, non-linear, and interactive process, requiring intensive communication and collaboration between different actors, both within companies as well as between firms and other organizations such as universities, innovation centers, educational institutions, financing institutions, standard setting bodies, industry associations, and government agencies." See Franz Tödtling and Michaela Trippl, "One size fits all? Towards a differentiated regional innovation policy approach," Research Policy 34, 2005.
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It means that firms have deep roots and deep social connections."17 In this light, she said, it is logical that cluster formation reflects the local qualities of the place where it forms. Given that clusters are based on interactions rooted in the language and culture of a particular time and place, it also follows that replicating a successful cluster model elsewhere can be highly elusive.
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(See Box A.) Drawing on presentations at the June 2009 symposium on innovation clusters, this overview illustratively contrasts the circumstances associated with the formation of the regenerative medicine cluster in California and the nano-technology cluster New York -- two large states with diversified economies -- with steps taken by Kansas and South Carolina -- two smaller and traditionally rural states -- to encourage cluster development.
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Liebmann, 1932 Clustering in California Home to Silicon Valley and Hollywood as well as agricultural clusters, California's innovation economy benefits from a strong system of state-supported universities, major research centers, and leading national laboratories. The state is also home to a large pool of talented people and a vibrant entrepreneurial culture.
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This story began, he said, when California voters approved Proposition 71 in 2004 to establish the California Institute of Regenerative Medicine to regulate and fund stem cell research. This proposition was passed at a time when the federal government did not support stem cell research.
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Haldar, of the New York Energy and Environmental Technology Applications Center, described the rapid evolution of a high-technology cluster near Albany that is reversing the economic fortunes of the region. The effort began in the 1990s, when much of upstate New York was in an "economic shambles." Manufacturing jobs were disappearing from every region: steel mills from Buffalo, high-tech Xerox and Kodak jobs from Rochester, the gas turbine division of General Electric from the capital.
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The Kansas Experience States like Kansas have also adopted focused strategies, albeit drawing on more limited budgets but leveraging existing capacities and strengths to develop industries deemed to have the highest potential for growth. Richard Bendis, a former president and chief executive officer of the Kansas Technology Enterprise Corporation (KTEC)
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. While the goals of TBED tended to focus on natural resources and brick-and-mortar projects, the goals of IBED focus on clusters, networks, innovation, and technology products "intervening at the margins of the private sector." projections of industry data and the state of the Kansas economy, KTEC judged that the state's aviation sector did not offer sufficient growth potential.21 Recognizing that "each state, country, or region must adjust and prioritize policies according to its individual context," KTEC decided not to compete with emerging nanotechnology clusters like Albany, New York, because the state did not have the means to build new, large-scale infrastructure.
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Technology Focus. The 2005 Innovation Centers Act created SC Launch, a state program focused on developing technology sectors that have good commercialization potential and some strength in the state -- primarily advanced materials and fibers, alternative energy, automotive technology, energy and chemicals, life sciences/biotechnology, and related information technology and software.
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In his presentation, Pradeep Haldar noted that in the 1990s, then-Governor Pataki gathered a diverse group of stakeholders to develop a strategy to revive the economic fortunes of Upstate New York. David McNamara of the South Carolina Research Authority noted that the legislature and state leaders have been active in passing legislation and funding SC Launch to stimulate innovation based economic development in the state.
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• Build synergies with federal funding. Richard Bendis noted that the Kansas Technology Enterprise Corporation leveraged its portfolio heavily with federal SBIR and business assistance programs.
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Federal policy should also link, leverage, and align existing federal programs that support regional economic development. Box E Making Cluster Support a Federal Priority "Who's going to create the good-paying jobs here in America?
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Because the EDA is in the Department of Commerce, he observed, it is well positioned to complement other relevant Commerce programs, including the Technology Innovation Program, Manufacturing Extension Partnership, export assistance from the International Trade Administration, and infrastructure funding from National Telecommunications and Information Administration and NOAA. He suggested that a federal program to support clusters should have three key features: competitive grants, a program of information exchange, and coordinated delivery of expert assistance.
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Participants at the National Academies symposium discussed the role of federal innovation awards and S&T research parks -- two important types of partnerships -- in the development of innovation clusters and the role universities and foundations play in encouraging the development of clusters. The Role of Innovation Awards -- The Technology Innovation Program "Imperfections in capital markets can sometimes pose major challenges to small firms seeking to bring their innovations to market."28 Programs like the Technology Innovation Program (TIP)
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Today, countries as diverse as China, Singapore, Mexico, and France are among those undertaking substantial national efforts to develop research parks of significant scale and scientific and innovative potential. In many cases, these research parks are expected to generate benefits that go beyond regional development and job creation.
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See also Federal Reserve of Chicago, "Can Higher Education Foster Economic Growth? -- A Conference Summary," Chicago Fed Letter March 2007.
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57-66. Others note that universities generally do not do not have the financial resources to provide early-stage capital, specialized support services to the inventors, entrepreneurs, and start ups, and a physical infrastructure and organization that allows their research faculty and students to network with corporate partners, investors, service providers and other entrepreneurs to help build and grow cluster capabilities.
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They agreed, and it was catalyzed by another grant from the Knight Foundation. This initiative is dedicated to making Akron the #1 biomaterials and orthopedic research program in the world." The Catalytic Role of Foundations Private foundations can play a catalytic role in the development of local innovation clusters.
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Christina Gabriel described how Heinz and other foundations have joined with community development organizations and the state to integrate the city's dilapidated Hill District with more prosperous adjacent zones into a new Pittsburgh Central Keystone Innovation Zone.
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Lastly, as George Bo-Linn of the Moore Foundation and Christina Gabriel of the Heinz Endowments noted, private foundations can often leverage the strong personal interest and extensive business experience of their benefactors to provide the leadership, resources, flexibility, and stability needed to address missing gaps and connect firms and universities to neighborhoods. As Professor Feldman noted in her presentation, this institutional diversity -- partnerships, research parks, universities, and foundations, together with state, regional, and national governments -- helps create the localized networks of trust and collaboration we call innovation clusters.
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This STEP symposium addressed this policy interest. The deliberations, summarized in the next chapter, brought together senior officials from the White House and other federal agencies, representatives of leading state and university programs, congressional staff and other policymakers to explore current knowledge on the role of clusters in promoting economic growth, the state and federal governments' role in stimulating clusters, and the contributions of universities and foundations to their development.
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