title: The evolution and future of the Irish MedTech cluster
Creators: name: McKernan, David
Publisher: name: University of Galway
Year: 2024
Subjects: subject: Clusters
subject: Galway
subject: MedTech
subject: Ireland
subject: Medical device

description: This research examines how high-cost locations can maintain a competitive advantage in a global world where multinationals can move location seeking lower cost labour. The Medical device cluster in Galway is used as the case study. The research supports the academic theory that competitive advantage is a highly localised. Firms cluster in geographic locations areas often as small as 5 to 10km square. Maintaining a competitive advantage is difficult; new techniques and methods can be copied by others – hence, best practice is rapidly diffused, and rivals imitate one another’s improvements (Porter, 1996). A clustering effect can provide a competitive advantage that is difficult for other firms outside the region to copy. The effect is highly dependant on people and social interactions and the presence of key stakeholders. The cluster evolves around key stake holders that are essential for the cluster’s health. Competitive strategies depend on maintaining the health of the cluster. Clusters provide a competitive advantage to nations and regions. Although many discussions highlight the national competitive advantages of clusters, this research shows clusters are contained in a small geographic region (Evans, 2023). Distance and gravity matter. Having similar industries close together generates benefits that decline as the distance increases (Ferretti et al., 2022). In the case of the Galway cluster, most firms fit in a square with 5km sides (McKernan &amp; McDermott, 2024b). The research supports the Rosenthal and Strange (2003) findings that the advantages of a cluster attenuate with distance and are measurable in the real world with distances as little as two to five miles. The example of Galway is not unusual; even Silicon Valley is concentrated in a few hot spots with collaboration firms that are often in the same street or building (Guzman &amp; Stern, 2015). Porter (1990) states the nation provides an environment that enables firms to improve and innovate, and focuses on the nation as the key differentiator for providing a competitive advantage. The research shows that the nation does provide the overall environment, but to understand why clusters are established and successful or what interventions are required, a much smaller geographic space must be considered. The research supports Porter’s assertion that the competitive advantage is defined in narrow industrial segments (Porter, 1990). Many pivotal researchers have highlighted the importance of location, factor conditions, investment, transport and education systems (Etzkowitz and Leydesdorff, 1995; Krugman, 1991; Porter, 1990; PRED, 1966; Sinclair, 1967). This research agrees with these findings but has highlighted the importance of individual entrepreneurs, culture, and a region’s ability to attract people to create and sustain the success of the cluster. This research shows how firms in the Galway cluster have a common lineage encouraging an open and collaborative culture (McKernan and McDermott, 2024a). It agrees with Stephens et al. (2019) findings that social and institutional connectiveness is essential to supporting and maintaining the cluster. Soft infrastructure is critical to attracting and maintaining human capital (Gertler, 2004). Cities with a rich and vibrant arts and culture scene help in creating a highly innovative cluster (Florida, 2014).