Policy Brief: Competitive Regional Clusters: National Policy Approaches

Nations and regions are struggling to remain competitive and adapt in the context of globalisation. The regional specialisations built up over decades are transforming rapidly. Many regions that were historically production centres are losing out to lower-cost locations and are reorienting their activities to higher value-added non-manufacturing industries or R&D-intensive manufacturing niches. Yet, given that even some of these upstream activities have begun to be off-shored to lower-cost OECD and non-OECD countries, the question for policy is how durable are the competitive strengths on which regional economies are based.

The public sector response has been an increased attention to the importance of linking firms, people and knowledge at a regional level as a way of making regions more innovative and competitive. This new approach is visible across a number of different policy fields. Evolutions in regional policy, science and technology policy and industrial/enterprise policy are converging on the objective of supporting these linkages at the regional level. One of the vehicles commonly used to achieve these goals is to support “clusters” (concentrations of firms and supporting actors) in a particular region. Examples of such programmes include the Pôles de Compétitivité in France, the Centres of Expertise in Finland or Japan’s Industrial Clusters.

While national governments are seeking to support competitive regional clusters, they are faced with a series of important choices. Should the public sector support specific clusters or simply focus on framework conditions and the innovation environment more generally? Should resources be spread across a large number of clusters or be concentrated on only a few of the nation’s leading regions?

Is the ultimate goal to preserve employment in industries that are delocalising or to cultivate sectors of strategic importance in terms of technology?