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Clusters in RIS3

Michael Porter introduced in the early 1990s the concept of cluster as a geographic concentration of firms and organisations working in related activities.

Written by Guillermo Aleixandre

Reviewed by David Walburn


The concept and its origin

Why clusters are interesting?

A wide range of experiences

The cluster policy

Cluster initiatives

Clusters in RIS3

References and websites

Experts' comments


The concept and its origin

Michael Porter introduced in the early 1990s the concept of cluster as a geographic concentration of firms and organisations working in related activities. A cluster can comprise a wide range of participants that goes from SMEs and large firms, playing distinct roles (specialised suppliers, services providers, customers, manufactures of complementary products and other related firms), to governmental bodies or other institutions (universities, research centres, trade associations, standards agencies,…) [1]. All these participants are linked through stable relations in one or several layers of the supply chain, in some cases competing and in other co-operating.

The globalisation and the spread of ICT technologies do not make clusters and their geographical proximity approach less important, but impose them the need of rethinking their position in a worldwide value chain, and, Why not to aspire to become a world-class cluster?


Why clusters are interesting?

The researchers’ and policymakers’ interest in clusters is based on their capacity to generate positive externalities that enhance the level of competitiveness of their participants. Mainly, positive externalities that means benefits without any cost for the cluster participants. Besides, these externalities can indirectly affect the territory where the cluster is located.

These benefits come from different factors: numerous and skilled labour force, a greater variety of specialised intermediate goods and services, tacit knowledge spillovers due to inter-firm interactions, a higher social capital (i.e. trust) that facilitate the transactions, an increasing supply of complementary products, a reduced cost of transport, a reputation of excellence of the whole entity, the opportunity for inter-firm projects. There are, however, some potential risks such as congestion costs, if the cluster grows excessively, or vulnerability, if the cluster becomes too inward looking or rigid [2].


A wide range of experiences

The different kind of participants and their relations allow identifying various types of clusters what, in hence, means diverse internal logic [3]:

  • Network industrial districts (Marshallian cluster) made up of locally-owned, SMEs concentrated on crafted based, high technology, or producer services industries. (e.g. Tech City in east London or Emilia-Romagna region).
  • Hub-and-spoke clusters characterised by one or few dominant firms surrounded by smaller suppliers and other related activities (e.g. the aircraft cluster supported by Boeing in Seattle).
  • Satellite clusters that consist of a congregation of branch facilities of externally-base multi-plant firms (e.g. the Research Triangle Park in North Carolina that concentrates several R&D centres of high-tech multinationals).
  • Institutional or state centred cluster located in a region where the local business structure is dominated by a public or non-profit entity (university, research centre, military base…) (e.g. Oxford Biotech Cluster around the Oxford University).

Besides, clusters have to be considered as evolving realities with a multiple stage lifecycle: creation, expansion/growth and consolidation/maturity. The latter phase leads to two potential scenarios: The renaissance of the cluster, if its participants are able to tackle the changing environment (new technologies, emerging competitors, shifting demand…); or a lock-in situation if cluster actors are not able to avoid stagnation.


The cluster policy

The recognition of the positive impact of clusters on regional economies and the identification of market and systemic failures that hinder their activity had justified the implementation of public measures to ease the cluster creation and to speed up its consolidation and up-dating (the different stages of a cluster development require individually tailored actions).

Policies that support clusters come from three different policy trends and frequently link multiples objectives [4]:

  • Regional policies trying to build competitive regions, including lagging regions.
  • S&T and innovation policies trying to foster public-private collaborative research and to improve the research commercialization.
  • Industrial and enterprise policies trying to support common needs of firms and to increase the technology absorption of firms, especially SMEs.


Cluster initiatives

In order to make the most of the dynamism of clusters, their participants can join in an organised effort, i.e. in a cluster initiative. These initiatives have become a keystone to ensure the growth and competitiveness of clusters and pursue to organise and guide the actions of its member to take full advantage of their local resources and relationships [5]. The analysis and the management of cluster initiatives are an emerging and fruitful field of work. The analysis has allowed improving the set of indicators to measure the performance of cluster initiatives and, also, to carry out benchmarking processes between initiatives. Based on the previous information and, in many cases, through mutual learning activities, it has been possible to establish guidelines for the development and management of cluster initiatives [6] and to pursue standards for excellent cluster management. Besides, this pool of knowledge and relationships paves the way for collaborative initiatives among clusters (cross-border projects, inter-cluster projects, cross-sector projects).


Clusters in RIS3

Clusters and clusters initiatives are in the heart of the Regional Innovation Strategy for Smart Specialization (RIS3). Existing cluster initiatives can be an outstanding stakeholder in the different phases of a RIS3 (definition, implementation, monitoring and evaluation) and, also, existing or new clusters can be a suitable instrument to implement RIS3, as they are able to mobilise key regional resources [7]. Examples of how clusters can be embedded in RIS3 are the following:

  • The identification of regional specialisation on through cluster mapping analysis.
  • The identification of relative regional position through cluster benchmarking.
  • The gathering of quantitative and qualitative data of clusters allows monitoring the regional performance. Besides, cluster participants can be a valuable source of information in foresight processes or in the identification of key enabling technologies.
  • Cluster initiatives can be a good tool to align the efforts of different actors of the regional innovation system towards a shared vision of the regional future.
  • Cluster initiatives are a good way to channel public support to regional players, being able to reach regional SMEs and to put in contact different players of the regional innovation system. The cluster companies with a better relative position in the global value chain can guide other companies, especially SMEs.
  • The trans-national cooperation of clusters can foster internationalisation of regional activity.
  • Cluster initiatives facilitate connectivity and hybridisation between actors from different institutional spheres: University, Industry and Government, that enhance creativity and diversification processes. Also, inter-cluster activities can facilitate diversification of regional specialisation.
  • Some of the cluster actors can lead the development of key enabling technologies at the regional level and, also, promote these technologies among other participants. 


References and websites


Mr Guillermo Aleixandre


Guillermo Aleixandre Mendizábal holds a Ph.D. in Economics and has a 5 year Business Administration Degree and a 3 year Computing Science degree. His current position is Lecturer in the Department of Applied Economics of the University of Valladolid (Spain). His main research fields are: Evaluation of social impact of R&D and innovation projects; regional R&D and innovation policies. This research has been possible through his participation in: 4 European competitive projects (VAN, COGNAC, NORRIS and KNOWBRIDGE), 8 national or regional competitive projects and several contracts with private organisations. As a result he is author of 4 books, 6 book chapters and 9 articles. Besides, he has participated in international scientific conferences (as ERSA, IASP or Research Management) and several national scientific conferences.



Experts' comments

This paper gives an excellent and comprehensive outline of cluster analysis and its importance for policy makers in economic development. The great value of Michael Porter’s work is that the concepts are easy to understand. What he has called “clusters” are familiar and recognisable to non-specialists and specialists alike. They have existed in many economic systems for centuries and have played a vital role in the development of western capitalism since the start of the Industrial Revolution. The great value of Porter’s contribution has been to explain the dynamics of industry clusters and to present economic developers with models which indicate opportunities for public policy interventions to boost economic growth.

Taking the discussion beyond the ground covered in the main paper, it might be helpful to consider the practicalities of intervening in development. There needs to be confidence that public policy can intervene effectively and really add value. Some industry clusters are well established and can get along well without any outside support. This can also be true for newer clusters in innovative industries, with Silicon Valley in California perhaps being one of the best examples. However, there are many less robust, developing clusters in innovative sectors, where the judgement of policy makers is that public policy interventions might be helpful, especially where the firms making up the cluster have neither the finance nor the human resource to do anything more than manage their own affairs. As with most economic development interventions, effectiveness is likely to be more achievable through programmes which are limited in scope and also go with the grain of existing commercial dynamics. For example, the provision of finance to provide a qualified person to facilitate the development of a cluster alongside existing stakeholders may be all that is required to effect valuable improvement.

Fortunately, the popularity of clusters as a focus of economic development policy over the last twenty years means that there is a great deal of recorded experience for practitioners to draw on when devising programmes. Although it was published ten years ago, the Cluster Initiatives Green Book by Christian Kettels and others, which is cited in the reference section of the main paper, contains much research material which is still relevant about the effectiveness of differing public policy interventions. It is time that this work was updated.

It is also worth mentioning that the very accessibility and wide knowledge of cluster policy in both political and practitioner communities carries with it certain dangers. There is sometimes a desire to see cluster encouragement as a component of a regional development strategy, even when the prior existence of a cluster is in doubt. The view may be that for it to be successful, a region has to have some sort of high tech, or another type of innovative cluster, so that the objective of public policy becomes to either create one or to build one on very flimsy grounds. Such initiatives – and sadly there have been many of them – invariably end in tears. Another danger arises from policy makers recognising the existence of a cluster, and then, armed with the insights of cluster policy, attempting to interfere and impose its supposed better judgement about future development on a reluctant group of stakeholders.


Mr David Walburn

After a career in business David Walburn joined Greater London Enterprise in 1986 where he was responsible for venture capital and other small business support, before becoming Chief Executive of the organisation. He was the Chair of the London Business Angels Network and played a key role in the setting up of the European Business Angels Network. He has worked with the UK government and the European Commission on developing public policy initiatives to improve the financing of small and medium-sized enterprises. He was the Chair of Capital Enterprise, the umbrella body for organisations supporting micro business development in London, until 2012.

For the last ten years he has been a Visiting Professor at London South Bank University where he headed the Local Economy Policy Unit and was the managing editor of the journal Local Economy.

He has served as President of EURADA, and been a member of a number of advisory bodies of the European Commission.  He has been an active member of the International Economic Development Council in Washington DC and has a wide range of international contacts with economic development organisations.

He continues to write and lecture on small business finance and regional economic development.



[1] OECD, Clusters, innovation and entrepreneurship, OECD, Paris, 2009.

[2] OECD, Regions and innovation policy, OECD, Paris, 2001.

[3] A. Markusen, Sticky places in slippery places: A typology of industrial districts, Economic geography, 72 (3) (1996) 293-313.

[4] OECD, Competitive regional clusters. National policy approaches, OECD, Paris, 2007.

[5] O. Solvell,  G. Lindqvist, C. Ketels, The cluster initiative greenbook, Ivory tower AB, Stockholm, 2003.

[6] CLOE project: Cluster Management Guide – Guidelines for the Development and Management of Cluster Initiatives. http://www.clusterforum.org/en/cluster_management_guide.html

[7] D. Foray, J. Goddard, J. Goenaga Beldarrain, M. Landabaso, P. McCann, K. Morgan,  C. Nauwelaers, R. Ortega-Arguiles, Guide to research and innovation strategies for smart specialisation (RIS3), European Commission, Brussels, 2012.