Economic performance of Economic performance of the major european the major european

metropolises : the Role of metropolises : the Role of ClustersClusters

Dr Vincent GOLLAIN, IAURIF, Paris

Dr Brendan WILLIAMS, DIT, Dublin

• Cluster and Regional CompetitivenessCluster and Regional Competitiveness

• Emergence and Development ConditionsEmergence and Development Conditions

• Study MethodologyStudy Methodology

• Synthesis of Case StudiesSynthesis of Case Studies

• RecommendationsRecommendations

SUMMARY

CLUSTER CLUSTER AND AND

REGIONAL REGIONAL COMPETITIVENESSCOMPETITIVENESS

1

• This idea can be traced back to Alfred Marshall (1890).

• A cluster is a geographically proximate group of interconnected companies and associated institutions in a particular field, linked by commonalities and complementarities (M. Porter).

• A cluster can contain :

- a small or a large number of enterprises,

- small and large firms in different proportions.

- Firms with local or foreign origin. • Different clusters involve varied degrees of interaction

among the firms involved, ranging from loose network of association to multifaceted forms of co-operation and competition

• Clusters can vary considerably in spatial extent.

What is a Cluster ?What is a Cluster ?

EMERGENCE AND EMERGENCE AND DEVELOPMENT DEVELOPMENT

CONDITIONS CONDITIONS

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Elements that influence the growth Elements that influence the growth of clustersof clusters

We find that every large European Region has not the same chance to develop a certain cluster.

Key factors :• Technology transfer,• Knowledge transfer,• Skilled labour force in related industries,• agglomeration economies• social infrastructure.

Cluster development is more appropriate in areas where there is already an existing diverse economic base

Two Types of ClustersTwo Types of Clusters1. The « natural » Cluster (most of cases studies ) :1. The « natural » Cluster (most of cases studies ) :• Cluster development is attributable to several key factors,

including technology transfer, knowledge transfer, development of a skilled labour force in related industries, the benefits of agglomeration economies, and social infrastructure.

• Researchers differ on how these factors promote cluster growth.

2. The « Public sector created » Cluster :2. The « Public sector created » Cluster :• Some clusters have been created or developed by policy makers

(Regional development agencies, planners, …).• These Cluster policies focus on developing a strategy that will

encourage an efficient allocation of limited resources available for urban and regional economic development.

STUDY STUDY METHODOLOGYMETHODOLOGY

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1. Identification of 5 target activities :1. Identification of 5 target activities :• 3 common sectors / clusters : I.C.T, Pharmacy

- biotechnology, Creative industries.• 2 own sectors / clusters such as banking and

insurance or logistics.

2. Methodology :2. Methodology :• Cluster / sector analysis• Policy toward clusters• Interregional comparisons

General PrinciplesGeneral Principles

- ICT- Biotech- Creative- Finance serv.- Tourism

- ICT- Biotech- Creative- Logistics- Serv. to elderly- Environment ind.

- ICT- Biotech- Creative- Media- Tourism

- ICT- Biotech- Creative- Banking - insu.- R & D

SYNTHESIS OF CASES SYNTHESIS OF CASES STUDIES : EXAMPLESSTUDIES : EXAMPLES

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Strengths :

• Dublin : Low corporation tax ; leader in software

• London : European leader ; strong demand ; proximity to clients

• Paris : (inter)national leaders companies , proximity to clients

• RhineRuhr : national leaders, multimedia

ICTICTNumber of employees of ICT companies

0

50000

100000

150000

200000

250000

300000

350000

400000

Dublin London Paris RhineRuhr

• Dublin : International Finance Services Centre

• London : One of the worlds leading financial centres

• Paris Ile-de-France : european and international financial centre

• RhineRuhr : national leaders

FinanceFinanceThe finance industry in European regions

1,5%

5,4%

0,8%

2,2%

3,6%2,7%

8,3%

0,0%1,0%2,0%

3,0%4,0%5,0%6,0%

7,0%8,0%9,0%

Brussels Ile-de-France

Dublin Frankfurt RhinRuhr Randstad London

Share of European employment

CLUSTERS POLICIESCLUSTERS POLICIES

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• State investment.

• Public services.

• Entrepreneurship.

• Subsidies / Incentives.

Direct Intervention MeasuresDirect Intervention Measures

• Creation of a favourable business environment.

• Urban planning.

• Education and training.

• Soft and hard infrastructure provision.

• Streamlining regulation.

• Public office / safety / crime reduction.

• Access to capital.

Indirect Intervention MeasuresIndirect Intervention Measures

• International.

• Regional.

• Local.

• Customers and clients.

• Suppliers and associated businesses.

Linkage and networksLinkage and networks

Public Infrastructure and Public Infrastructure and InvestmentInvestment

• Hard infrastructure.

• Communications.

• Soft infrastructures.

• Environmental Issues.

RECOMMENDATIONSRECOMMENDATIONS

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Recommendations from cases Recommendations from cases studiesstudies

• Initial identification of sectors.

• Support and development.

• Role of state agencies.

• Future development.