White Spaces in Building Innovation Clusters

Abstract

Clusters are groups of firms, related actors, and institutions that are located near one another and that draw productive advantage from their mutual proximity and connections. Clusters arise and grow because the firms within them profit materially from the presence of powerful “externalities” and “spillovers” that bring them important competitive advantages, ranging from the presence of a specialized workforce to supplier specialization and the exchange of leading edge knowledge. Today, the US economic maps show scores of local agglomerations: biotech in Boston, information technology in Silicon Valley, entertainment in Hollywood, horse trailer manufacturing in north Texas, marine technologies in eastern North Carolina and wine in southern Washington. Clusters are prominent in Europe too. On average, every fourth company (employing at least 20 persons) in the European Union (24%) work in a cluster-like environment characterized by close cooperation with other local businesses and strong ties to local business infrastructure. Based on US and European success a new movement started all across the globe to promote regional innovation clusters. The paradox is that while all agree that no where governments succeeded in creating an innovation cluster out of nothings, all nations are working to promote clusters and to make them more innovative. The search is for identifying a cluster that already exist but not passed the market test as hot spot though potential exists. Some factors are considered more important than others to determine the potential, like University linkages, Social Capital of cluster, Access to heterogeneous knowledge, Intervention by public authorities. In India, Innovation Cluster project was initiated at three places, Hyderabad, Ahmedabad and NCR region and in this paper we present our learning on managing white spaces to make a cluster innovative.