Economic Capabilities and Strategic Clusters: New Perspectives for National and Regional Economic Policy

Abstract

Since the early Nineties, national economic policy in the Netherlands has been limited to market liberalisation and safeguarding adequate market conditions and adequate collective factor conditions, including physical and knowledge infrastructures. Because of past policy failures and EU regulation, micro- and meso level industrial policy has become marginal. Some years ago, national policy makers were inspired by Michael Porter’s diamond framework for the explanation of industrial competitiveness (Porter, 1990; Jacobs, Boekholt & Zegveld, 1990). Porter’s concept of economic cluster formation became for some time a buzzword, but this did not lead to actual policy change. At the moment of writing, there is a growing awareness in national policy circles of the limits of liberalisation, particularly in the case of the network provision of products and services such as railroads and electricity and telecommunication networks. In this chapter, a new case is made for meso level industrial and spatialeconomic policy, not as a substitute but as a complement of policy aimed at general market and factor conditions. There are various reasons for a renewed meso level policy, some of which are rather pressing. First of all, the competitive strength of nations and regions depends not only on market efficiency and other general conditions but also on industry-specific and cluster-specific conditions at a deeper level which have been forged by long term investment and which are hard to copy. Such conditions, among which specific knowledge infrastructures, networks of synergetic and pre-competitive collective entrepreneurship and shared regional and national pools of experience and specialised labour, will gain importance in liberalised international markets. These specific conditions do not evolve through the market mechanism and self-organisation alone. Some collective action is needed, both by entrepreneurs and by government agencies. Adam Smith’s invisible hand of the market needs the visible hand of