Articulating the development strategy for the innovation and industrial cluster by the compound option method

Abstract

Subject. The article focuses on the development strategy for the innovation and industrial cluster by the compound option method. Objectives. We articulate the development strategy for the innovation and industrial cluster by the compound option method, which would allow for flexible administrative decisions on the cluster evolution. Methods. The proposed method is based on the use of the compound option method, which includes constituents as follows: 1) the option for the reduction in the cluster strategy and withdrawal from it; 2) the option for the development and dissemination of experience across the cluster; 3) the option for the rearrangement and temporary suspension of the cluster strategy. Results. To illustrate the proposed method, we formulated the development strategy for the pilot innovation and industrial cluster of power engineering in the Nizhny Novgorod Oblast, which is represented with the backbone company PAO TNS Energo NN. The real option method helped increase the value of the cluster’s strategy. Combining the compound real option just as we suggest, it will be possible to avoid unreasonable administrative decisions on the withdrawal from the current strategy, which would provide for multiple, already existing tactical opportunities for the cluster’s development. The value of the current strategy, first of all, absorbs a put option. This is an option to reduce the cluster’s strategy or withdraw from it. Afterwards if the current strategy is continued, three call options are added to it. Conclusions and Relevance. The findings can be useful for governmental authorities in planning the development of innovation and industrial clusters and the harmonious advancement of the country.