EN    EN EN 
EN    EN  COMMISSION OF THE E UROPEAN COMMUNITIES 
Brussels, 17.10.2008 
SEC(2008)2637 
COMMISSION STAFF WORKING DOCUMENT  
ANNEX to the 
COMMUNICATION FROM THE COMMISSI ON TO THE COUNCIL, THE 
EUROPEAN PARLIAMENT, THE EU ROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMI TTEE OF THE REGIONS 
The concept of clusters and cluster policie s and their role for competitiveness and 
innovation: Main statistical results and lessons learned 
{COM(2008) 652 final}
EN 2   EN TABLE OF CONTENTS 
Introduction ................................................................................................................... ............. 3 
1. The concept of clusters and main definitions............................................................... 5 
1.1. The definition and concept of clusters ......................................................................... 5 1.2. The concept and economic rationale of clusters .......................................................... 7 
1.3. The emergence of clusters............................................................................................ 8 
1.4. Identification and measurement of clusters................................................................ 11 2. The economic impact of clusters on competitiveness and innovation....................... 19 
2.1. Clusters and innovation perfor mance of firms and regions ....................................... 19 
2.2. Clusters and specialisation ......................................................................................... 24 2.3. Clusters and economic performance .......................................................................... 28 3. Cluster policies in Europe: Con cepts and main characteristics ................................. 30 
3.1. Concept and rational of cluster policies in Europe .................................................... 30 
3.2. The role of trans-national cooperatio n at policy and programme level for 
strengthening clusters................................................................................................. 36 
3.3. Community support for transnational clus ter cooperation at policy and programme 
level: First results and future challenges.................................................................... 37 
4. Cluster initiatives and cluste r organisations in Europe.............................................. 42 
4.1. Concept and role of cluster organisations .................................................................. 42 
4.2. The role of trans-national cooperation between cluster ini tiatives and cluster 
organisations for strengthening clusters..................................................................... 47 
4.3. Community support for transnational cluste r cooperation between cluster initiatives 
and cluster organisations: First re sults and future challenges.................................... 52 
5. Towards better complementarities between regional, national and European efforts in 
support of clusters: The main challenges ahead......................................................... 59 
5.1. The needs and scope for better coordination between the different Community 
instruments in support of clusters .............................................................................. 59 
5.2. New challenges in support of clusters to be addressed at European level................. 63 
Challenge Nº 1: To better prioritise Member State’s cluster policies towards the needs of 
world-class clusters in the EU.................................................................................... 63 
Challenge Nº 2: To better pr ovide Member States and region s with neutral and reliable 
information about clusters.......................................................................................... 63 
Challenge Nº 3: More and better practical c ooperation at policy level between Member States
............................................................................................................................... ..... 64 
Challenge Nº 4: To better integrate innovativ e SMEs into clusters and the Lead Market 
Initiative ..................................................................................................................... 65 
Challenge Nº 5: To raise the quality of  cluster management all over Europe ......................... 66 
References ..................................................................................................................... ........... 67 
Glossary....................................................................................................................... ............. 72
 
EN 3   EN INTRODUCTION  
The main objective  of this Working Paper of the Comm ission Services is to present and 
further analyse the concept of clusters and to inform about main policy approaches in support 
of clusters. It accompanies and provides the rationale for the Communication on “Towards 
world-class clusters in the European Un ion: Implementing the broad-based innovation 
strategy”.1  
Clusters are becoming an increasingly popul ar concept which is reflected in a growing 
number of policies and initiatives in support of clusters . This paper describes the potential 
role of clusters, cluster policies and cluster initiatives for competitiveness and innovation and 
the available statistical evidence on this. The pur pose of this paper is neither to evaluate the 
impact of specific individual cl uster policies and initiatives in  Europe nor to provide an 
impact assessment of the actions implemented or planned at European level in support of 
clusters. Instead, it provides factual information on the concep t of clusters and its economic 
impact as well as on current polic y approaches in their support. 
The statistical findings presented in this pape r are mainly based upon results from the cluster 
mapping project of the European Cluster Observatory2 launched under the European 
Commission’s Europe INNOVA initiative. It further builds on the work performed by the European Cluster Alliance
3 and the INNO-Policy TrendChart4 under the PRO INNO Europe 
initiative, the 2006 Innobarometer survey on the role of clusters5, the Global Cluster Initiative 
Survey of the Cluster Initiative Greenbook6, several other publications by the European 
Commission, OECD publications (1999; 2001; 2005; 2007; 2008), and a great number of 
academic studies on clusters as well as on case studies. 
Furthermore, this document reflects broad feedback from stakeholders  on clusters and 
cluster policies, such as from the High Level Advisory Group of experts on clusters7 that 
presented in November 2007 the European Cluster Memorandum8, which was sent to regional 
governments and innovation agencies across Europe and discussed at the European 
Presidency Conference on Innovation and Clusters9 in Stockholm on 22-23 January 2008. In 
                                                 
1 COM (2008) 652 of 17.10.2008 
2 Information from the European Cl uster Observatory is available at http://www.clusterobservatory.eu/ 
See also the Europe INNOVA / PRO INNO Europe paper N° 5 on “ Innovation Clusters in Europe: A 
statistical analysis and overview of current policy support”  by the Directorate-General Enterprise and 
Industry is available at http://www.europe-in nova.org/ index.jsp?type=page&cid=8702&lg=en 
3 More information on the European Cluster Alliance, and how to join it, is available at 
http://www.proin no-europe.eu/index.cfm?fuseaction=pa ge.display&topicID=223&parentID=0 
4 More information on the INNO-Policy TrendChart  is available at http://www.proinno-europe.eu/ 
index.cfm?fuseaction=page.display&topicID=52&parentID=52 
5 The “2006 Innobarometer on cluster’s role in facilitating innovation in Europe”  is available at 
http://www.proinno-europe.eu/admin/uploade d_documents/FL187_Innobarometer_2006.pdf 
6 The Cluster Initiative Greenbook by Sölvell, Lindqvist & Ketels (2003) is available at 
http://www.cluster-resear ch.org/greenbook.htm 
7 More information on the High Level Advisory on cl usters is available at the Europe INNNOVA website 
at http://www.europe-innova.org 
8 The European Cluster Memorandum is available at http://www.proinno-europe.eu/ 
NWEV/uploaded_documents/European_Cluster_Memorandum.pdf 
9 More information on the conference which was organised jointly by the Swedish government under the 
Slovenian presidency, with support of the PR O INNO Europe initiative, is available at 
http://www.VINNOV A.se/innovationandclusters  
EN 4   EN addition, experience from the PRO INNO Europe and Europe INNOVA initiatives are taking 
into account.10  
Chapter 1  provides some basic definitions related to  clusters and a further analysis of the 
concept of clusters. In the broade st sense, clusters can be define d as regional concentrations of 
specialised companies and institutions connect ed through multiple linkages. However, other 
definitions are used as well, depending on th e context and purpose of the discussion. In 
particular, it seems to be important  to clearly dis tinguish between clusters, cluster policies 
and cluster initiatives . Whereas clusters are a real economic phenomenon that can be 
economically measured, cluster policies are mo re an expression of pol itical commitment to 
support existing clusters or the emergence of new clusters. Clus ter initiatives are practical 
actions to strengthen cluster development, whic h can, but must not necessarily be, based on a 
formulated cluster policy. 
Chapter 2 investigates the role of clusters for the success of firms, especially SMEs, as well 
as for regional and national growth and innovati on. It presents an in-depth analysis of the 
available statistical findings on the economic impact  that clusters can have on 
competitiveness, economic growth, productiv ity, innovation and employment and thus 
explains why clusters matter in economic terms.  
Chapter 3  provides an overview of cluster policies  implemented in the regions and Member 
States in Europe. Cluster polic ies may take different forms and follow different objectives 
which make it difficult to clearly categorise th em. A full assessment of their impact is not 
possible at this stage, taking into account the lack of comparable da ta and the methodological 
difficulties to measure multiple and long-term effects of hor izontal polices. Under this 
chapter, different approaches towards trans- national cluster cooperatio n at policy level are 
presented, together with their first results. 
Chapter 4 looks at the role that  specific cluster initi atives may play to support the functioning 
of clusters. The analysis  suggests that efficient cluster organisations  are a key element of 
successful clusters. This chapter pays particular attention to the rationale for trans-national cooperation between clusters and presents the main results from  European initiatives in its 
support. 
Chapter 5 presents the main policy challenges to be addressed at European level , taking 
into account the findings of this  document. It describes a numb er of policy options and their 
expected impact in view of better coherence be tween the different policies used in support of 
clusters in Europe. 
                                                
 
10 More information on the PRO INNO Europe initia tive is available at http://www.proinno-europe.eu/ 
and on the Europe INNOVA at http://www.europe-innova.org 
EN 5   EN 1. THE CONCEPT OF CLUSTERS AND MAIN DEFINITIONS  
Clusters are seen as an important factor for the explanation of the empirical  phenomenon of 
geographical concentration of eco nomic and innovation activities . More than one 
definition of clusters exists, depending on its purpose and the specific context of its use. In many discussions no clear distinction is dr awn between clusters as a real economic 
phenomenon and cluster policies and initiative s which are more of a normative function. The 
purpose of this chapter is to introduce some basic definitions linked to clusters and to provide an explanation of its underlying concept. Furt hermore, it describes different approaches to 
measure clusters. In this respect, this chapte r outlines in particular the methodology used by 
the European Cluster Observatory, which provi ded for the first time a comparable cluster 
mapping across Europe.  
1.1. The definition and concept of clusters  
Many definitions of clusters exist . Definitions are, by default, context-related and driven by 
purpose. Whereas from an economic point of vi ew the main purpose is to better understand 
the drivers of competitiveness and growth, othe r definitions may follow different objectives, 
such as providing a legal framework for f unding or a reference model for statistical 
measurement. Whereas definitions aiming at conceptualising clusters are either descriptive 
or abstract  in order to capture the broad range of  elements characterising clusters, legal 
definitions are necessarily defined in stricter a nd more technical terms in order to provide the 
framework for the applica tion of State Aid rules
11 and other forms of financial support.  
In more general terms, clusters can 
be defined as a group of firms, related economic actors, and institutions that are located near each other and have reached a sufficient scale to develop specialised expertise, servic es, resources, 
suppliers and skills.
12 A common 
element of most cluster definitions is 
the aspect of a concentration  of one 
or more sectors within a given region as well as the emphasis on 
networking and cooperation betwee n companies and institutions.
13  
                                                 
11 The definition of the State Aid rules (as presented in the box) is added by the comment that 
“[p]referably, the Member State should intend to create a proper balance of SMEs and large 
undertakings in the cluster, to achieve a certain cr itical mass, notably through specialisation in a certain 
area of R&D&I and taking into account existing cluste rs in the Member State and at Community-level.” 
It can be found in section 2.2 on page 10 of the text of the Community Framework for State Aid for 
Research and Development and Innovation , which is published in the Official Journal of the European 
Union (2006/C 323/01) of 30.12.2006 and available at http://eur-lex.europa.eu/LexUriServ/site/en/oj/ 
2006/c_323/c_32320061230en00010026.pdf  
12 See the report of the US Council on Competitiveness (2007) Innovation America - Cluster-Based 
Strategies for Growing State Economies , which is available at 
http://www.nga.org/Files/pdf/ 0702INNOVATIONCLUSTERS.PDF 
13 The aspect of the regional dimension is itself again subject to definition. The “ Community Framework for State Aid for 
Research and Development and Innovation”11 defines 
innovation clusters as “ groupings of independent 
undertakings — innovative start-ups, small, medium 
and large undertakings as well as research organisations — operating in a particular sector and 
region and designed to stimulate innovative activity by 
promoting intensive interac tions, sharing of facilities 
and exchange of knowledge and expertise and by contributing effectively to technology transfer, 
networking and information dissemination among the 
undertakin
gs in the cluste r.” 
EN 6   EN Clusters are defined by rela tionships, not memberships a nd their spatial boundaries are 
variable and not necessarily co rresponding with political border s. Cluster geography may be 
defined by the distance and time that people are willing to travel for employment and that 
employees and owners of companies consid er reasonable for meeting and networking. 
Geography is therefore not a stable concept but influenced by factors such as travel 
conditions, cultural identity, and personal pr eferences. New forms of transport and 
communication, such as the Internet, are also ch anging the spatial dimensions of a cluster. 
An important difference exists between the empirica l phenomenon of clusters, and cluster 
policies and initiatives aiming at their creation or further development . In discussions 
often both terms are used synonymously which may create some confusion. When present, 
active clusters leave traces that can be statistically captured, e.g. in terms of specialisation or 
concentration of employment with in a particular sector. In c ontrast, cluster policy is about 
expressing a focused strategy, se tting political priorities and allocating funding in order to 
promote innovation, regional development or other policy goals. In reality, all combinations 
between clusters and cluster policies can be found: Clusters spontaneo usly created without 
any political support, cluster policies sooner or later resulting in clus ters but also cluster 
policies without a statistically sign ificant impact on cluster formation. 
Cluster policies can be defined as specifi c governmental efforts to support clusters . Such 
cluster policies may take different forms and follow different objectives , such as industrial 
and SME policy or research and innovation po licy. Cluster policies are in most cases 
supported and implemented by specific cluster programmes of governments or initiatives. In 
consequence, cluster initiatives can be und erstood as “organised efforts  to increase growth 
and competitiveness of clusters within a regi on, involving cluster firms, government and/or 
the research community”.14 As part of this, cluster organisations of ten play an important 
role as service providers for the support of clusters.  Cluster organisations can be defined as 
the legal entity engineering, steering and ma naging the clusters, including usually the 
participation and access to the cluster’ s premises, facilities and activities.15  
The set-up of cluster organisations  or networks is often suppor ted by a clear mandate and 
public funding from authorities at  regional level or more spontan eously initiated within the 
triangle of universities, incubato rs and finance, in view to ov ercome obstacles to cooperation 
and allow trust building between partners. When  mature and successful, cluster organisations 
tend to raise the majority of their operating co sts themselves by membership and service fees, 
participation fees for training a nd conferences, sponsoring etc.  
                                                 
14 See Sölvell, Lindqvist & Ketels ( 2003). Alternatively, Andersson et al . (2004) define cluster initiatives 
as “conscious actions taken by various actors to create or strengthen clusters”. 
15 This definition follows the description concerning aid for innovation clusters that features in the 
“Community Framework for State Aid for Research and Development and Innovation”. See section 5.8 
on ‘Aid for innovation clusters’ of the text of the Community Framework that was published in the 
Official Journal of the European Union in December 2006 (2006/C 323/01) and that is available at 
http://eur-lex.europa.eu/LexUriServ/site/e n/oj/ 2006/c_323/c_32320061230en00010026.pdf 
EN 7   EN 1.2. The concept and economic rationale of clusters  
The concept of clusters is a modern de scription of the long observed phenomenon of 
geographical concentrati on of economic activities,  which is widely believed to be an 
important factor for economic development. Marshall (1890)  described already in the 19th 
century the advantages of agglom eration of economic activities in  terms of availability of a 
qualified workforce and sp ecialisation. Similarly, Schumpeter (1939)  referred to the 
“swarming” or clustering of industry. The conc ept of clusters is ve ry broad and comprises 
different perspectives and aspects covered by ot her concepts that have been around for a long 
time. It builds upon traditional location and a gglomeration theory and integrated other 
concepts, such as the concept of “industrial di stricts”, growth poles (“ poles de croissance”), 
new industrial spaces, systems of productio n, innovative milieux, national or regional 
innovation systems , learning or creative regions, to name a few.  
Becattini (1979) , an Italian researcher, introduced in 1979 the seminal concep t of “industrial 
districts” for regional policy and territorial development in his article “From i ndustrial sectors 
to industrial districts”. Based on Alfred Marshall’s concepts, Becattini raised the issue of the 
importance of place-based  economic development with the notions of external economies that 
changed the approach to industria l policy. He also stressed th e importance of social capital 
geography, sociology, politics and history in the delineation of innovation policies.  
More recently, the concept of clusters has been popularised and implemented by Porter 
(1990)  based upon his so-called “diamond model” of competitive advantage.16 The 
concentration of economic activities in cluste rs is viewed as the result of “competitive 
advantages” of firms in finding new and better ways to compete in an industry and to bring 
innovation faster to the market.  
While different schools of t hought stress different factors  that determine the growth and 
working of clusters, the concept of clusters generally comprises of three important 
dimensions:  
• First and widely undisputed, clusters are seen as  geographical concentrations of 
specialised firms, advanced skills and comp etences in the labour forces, and supporting 
institutions which increase knowledge flows an d spill-overs as a resu lt of their proximity. 
This bundling of different strengths of is often referred to as a promising strategy to remain 
globally competitive. Due to co-location, firm s can benefit from general and technology-
related agglomeration effects in  form of economies of scale and scope that improve their 
efficiency.17 Regions compete with each other worl dwide in providing the best framework 
conditions in order to facilita te business growth and to attr act investment and a talented 
workforce.  
• Secondly, clusters serve a functional purpose to provide a range of specialised and 
customised services to a specific group of firms, such as the provision of advanced and 
specialised infrastructure, specific business su pport services or training and coaching of 
                                                 
16 Porter’s (1990) “diamond model”  model highlights the following cornerstones of a system of mutually 
interdependent determinants that influence the competitive advantage: (production) factor conditions; firm strategy, structure, and rivalry; demand conditio ns; related and supporting industries; together with 
government and chance as additional determinants.  
17 See Audretsch & Feldman (1996) and Jaffe, Trajtenberg & Hendersen (1993). 
EN 8   EN staff. Cluster organisations help to channel, facilitate or provide access to facilities and 
services, which may include specialised resear ch and test centres, consultancy, training, 
and so on. In this sense, clusters are a form of “self-organisation” that offers competitive 
advantages. Clusters facilitate both intens e competition and close cooperation, sometimes 
described as “co-opetiton” . Geographical proximity is belie ved to facilitate the flows of 
tacit knowledge and the unplanned interactions  that are critical parts of the innovation 
process. This flow relies upon the willingness of firms to  inform others about their 
knowledge, which depends upon the tr ust established between actor s. This in turn can be 
facilitated through continuous f ace-to-face contacts, to which e fficient cluster organisations 
contribute by encouraging networking and cooperation.  
• Clusters are, thirdly, characterised by a cert ain dynamic social and organisational element, 
the so-called “institutional fix” or social glue  that holds the different interlinked 
innovation actors – such as universities, busin esses and public authorities – together and 
facilitates intense in teraction and cooperation amongst them . Over time, clusters tend to 
develop a set of idiosyncratic norms, institutions, personal networks, and trust. Dynamic and effective interaction and c ooperation in the knowledge triang le of educati on, research 
and innovation are crucial for realising compe titive advantages in times of increasing 
complexity of new technologies, products and se rvices as well as of changing requirements 
for skills and competences.  
• The – often unplanned – intense formal and informal contacts and exchange of 
business information, know-h ow, and technical expertise  within clusters can lead to 
technological spill-overs
18 and the development of new and often unexpected ideas and 
new creative designs, products, services and business concepts19 that improve the 
innovation performance of businesses. Wh ile the above mentioned dimension of 
geographical proximity is seen to facilitate trust and close cooperation between innovation 
actors within clusters, the access to new knowl edge and input from other clusters also 
needs to be ensured through gl obal pipelines and networks.20  
1.3. The emergence of clusters  
Agglomerations of economic activity in general, and clusters in particular, are  general 
economic phenomena, both in earlier times a nd in the modern economy. Some prominent 
examples of clusters with a global reach  are easily identifiable throughout a range of 
industries, including financia l services (London C ity, New York), film (Hollywood and 
“Bollywood”), cars (Detroit, Modena, Toyota C ity, Wolfsburg, Stuttgart, etc.), watches 
(Switzerland and Japan), op tical equipment (Tokyo), flowers (The Netherlands and 
Colombia), computer software (Silicon Valle y, Bangalore), marine technology (Southwest 
Norway), mobile telecommunications (Stockholm a nd Helsinki), wine (Barossa Valley, Rioja, 
Bordeaux, Southern Chile and parts of Californi a), or biotech, life sciences and medical 
instruments (Boston’s Route 128, BioValley21, Medicon Valley22). Therefore, clusters can be 
found in many economies around the world, each fo llowing its own trajectory and history.  
                                                 
18 See Audretsch & Feldman (1996) and Jaffe, Trajtenberg & Hendersen (1993). 
19 See Florida (2002) and Johannison (1987). 
20 See Bathelt, Malmberg & Maskell (2002). 
21 The trinational BioValley combines the French-German-Swiss border regions of Alsace, South Baden 
and northwest Switzerland with iis cities of Strasbourg, Freiburg and Basel. See 
http://www.biovalley.com 
EN 9   EN The emergence of a cluster in a particular locati on can be explained diffe rently. A first type of 
explanation relates to given  factor advantages , such as a particular cl imate, soil, ore deposits, 
forest resources, transportation ro utes or ports. The location of wine clusters, forest, pulp and 
paper clusters and other clusters based on na tural resources can ofte n be explained by the 
geography of production factors. A second  type of explanation refers to historical 
“accidents” , such as the location where several su ccessful entrepreneurs start a business 
and/or a large pool of talent and research activ ities gather. For clusters  to grow and prosper 
many ingredients are needed, including de mand sophistication, factor upgrading and 
specialisation , emerging strategies of competition a nd cooperation, institutional conditions 
favouring innovation and change  or political actions.23 
Successful clusters encapsulate all the activities needed to de liver a particular value to 
customers and they cross the tr aditional definitions of industries and of manufacturing versus 
services. They can emerge even where comp anies’ locations are not determined by the 
location of markets or natura l resources. Their specific nature, including their spatial 
coverage, differs according to technology, market  conditions, and other fa ctors that influence 
the geographic extent and rela tive strength of linkages.  
Clusters are not stable over time but change continuously . One example for such 
evolutionary process is the Humber seafood cl uster in the UK, which transformed from a 
commodity producer within an increasingly co mpetitive global frozen seafood industry to a 
leading value-added fresh/chi lled fish hub serving Europe.24 While it remained a maritime 
cluster, the competitive advantage and R&D fo cus moved away from a focus on fishing and 
processing technology to global lo gistics as well as from be ing centred ar ound the port to 
being linked to the airport. Another example is the Marche Music Cluster in Italy, which 
transformed from traditional accordion pr oduction to the production of electronic home 
appliances.25 Key actors with a non-local horizon and non-local networking are highlighted as 
two important factors for the successful upgradi ng of this cluster. There are many more 
examples of this type suggesting that succe ssful clusters have to  continuously reinvent 
themselves. 
Given the emphasis on networking, some countries may be in a more advantageous position 
due to their tendency to engage more inte nsively in networking. The 2006 Innobarometer on 
clusters26 finds for instance that networking is mo st popular in the Nordic region comprising 
Finland, Sweden, Denmark and Norway, from which the majority of cluster companies 
actively participate at least in two business netw orks and around 90% take part in at least one 
such network. In contrast, many cluster firms from the Czech Republic, Italy, Hungary, Slovakia, Belgium, Portugal and Slovenia – ranging from 51% down to 39% – stayed away from active participation in networks.  
                                                                                                                                                        
 
22 The Medicon Valley includes the regions of Greater Copenhagen and Zealand in Denmark and the 
Øresund region in Sweeden with the cities of Lund and Malmö. See http://www.mva.org 
23 See Porter (1990). 
24 See case study Nr. 27 of the summary  report on “Case studies of clustering efforts in Europe: Analysis 
of their potential for promoting innovation and competitiveness” drafted by the consultancy 
Competitiveness.com (2008) under the Europe INNOVA Cluster Mapping Project, available at the 
website of the European Cluster Observatory at  http://www.clusterobserv atory.eu/index.php?id=68 
25 See Tappi (2005). 
26 See European Commission (2006e). The ‘2006 Innobarometer on cluster’s role in facilitating 
innovation in Europe’  is available at http://www.proinno-
europe.eu/admin/uploaded_documents/FL187_Innobarometer_2006.pdf 
EN 10   EN The continuous success of clusters depends on their capability to change and to adapt . 
The high degree of specialisatio n associated with clusters bears the risk of greater 
vulnerability to market shocks if a region’s po rtfolio of clusters is too concentrated, which 
makes it difficult for a region to adjust timely to market changes. Openness and international cooperation work against these risks. Beside s that, a higher agglomeration of economic 
activities is likely to cause over time agglom eration disadvantages in terms of increasing 
factor costs (labour, real estate ) or traffic congestions, which may at some point outweigh the 
advantages of clusters. Finally, the potential benefits of clusters may lead to the pitfall of 
regions aiming to create clusters  from scratch especially in pr omising growth sectors, without 
consideration of regional strength or a necessary critical mass in a global context, however 
defined.  
For these reasons, clusters are not stable and cluster policies not always successful. Numerous 
case studies have been carried out to better understand the success factors of clusters . For 
example, a study of Brenner & Mühlig (2007) analyses 159 local  industrial clusters with 
respect to 35 different local conditions and processes that may lead to the emergence of 
clusters.
27 The study distinguishes three types of succe ss factors for the emergence of clusters, 
namely  the “prerequisites” for the development of clusters, the “triggering events” and actions 
that launch the process of making use of th e cluster development potential and “self-
augmenting processes” such as so-called Marshallian externalities or localisation economies 
which cause the activity in an industry and a region to increase further once a critical mass has 
been reached.  
The results of this study suggest that the most important  “prerequisites” for the emergence 
of clusters  are qualified labour (as mentioned to be important in 105 out of the 159 cases) and 
strong networks between actors. With respect to networks, great differences of importance 
can be observed, representing for many clusters an “important” factor (in a total of 78 case 
studies) but for others a less important one (as mentioned being unimportant in 37 cases). The 
existence of renowned universities and public research centres is another prerequisite 
frequently mentioned as being of importance (70) . Thereafter follow tr adition and historical 
preconditions (66), industrial struct ure (61) and local policies, latt er of which is mentioned in 
over a third (56) of the case  studies as being important. 
Concerning the  “triggering events”, the founding of a leading fi rm (62), special policy 
measures (53) and historical events such as wa rs (52) are the three mo st frequently mentioned 
important factors which represent a mi x of chance and good policies. Among the “self-
augmenting processes” , the accumulation of human capit al (116), the cooperation among 
firms (87) and the choice of co-location with other firms (83) are th e three most important 
factors identified as important by the majority of the case studies. It should be pointed out that 
intra-industrial and in ter-industrial spill-overs  as well as buyer-supp lier relations partly 
overlap with the cooperation factor which theref ore seems to be important as well. Another 
interesting result of this study is that policy measures are considered to be of high 
importance  and that its importance even increased over time.  
                                                 
27 Brenner & Mühlig’s (2007) meta-study analyses 159 local industrial clusters classified under 183 
publication according to whether each  of the 35 different local conditio ns and processes is mentioned as 
an important factor causing the emergence of the clus ter in the respective case studies. Each case study 
is classified as either mentioning the individual factor as “important”, “unimportant” or as giving “no 
information”.  
EN 11   EN 1.4. Identification and measurement of clusters 
Clusters are complex constructs of different dimensions that make it difficult to analyse and 
statistically capture them adequately. There are basically two different approaches  on how 
to identify clusters, each with its particular advantages and disadvantages. The first and most 
popular approach are case studies  that provide in-depth qualita tive information made available 
through desk research and interviews with local  experts. The second main approach concerns 
the various quantitative techniques that rely  on more sophisticated economic modelling and 
are based on statistical methods that aim to identify clusters indire ctly by measuring the 
revealed effects assumed to be obser vable when a cluster is present. 
Hundreds of case studies  exist and they are well-documenti ng the history, activities and 
impact of clusters on regional development,  employment and innovation. For instance, the 
European Cluster Observatory has published 25 case studies of cluste r across Europe (see 
Figure 1), together with a summa ry report and policy conclusions.28 Further case studies were 
prepared and co-financed under the European Union’s Cohesion Policy to facilitate policy 
learning at regional level.29 For instance, a study “Analysi ng ERDF co-financed innovative 
projects” presents a comparative analysis of si x case studies of cluster-related project. This 
study also finds that 12 of the 60 ERDF projects analysed (representing 7%) address “clusters 
and business networks” as a key objective.30 Further seven case studies of special types of 
clusters are included in a report on “regional re search intensive clusters and science parks” 
published under the “Regions  of Knowledge” initiative31. Moreover, a number of OECD 
publications on clusters (1999, 2001, 2005, 2007, 2008)  published detailed case-studies of 
clusters. The Competitiveness Institute (TCI) also provides a Cluster Initiative Database32 that 
lists details of more than  170 cluster initiatives. 
Most case studies provide qualitative informat ion about the emergence and strengths and 
weaknesses of a particular cluster. This ma y allow identifying its main success factors and 
fields of activity. However, each case study tells its own story  and results are hardly 
comparable. The main lessons to be learned from  the large number of available case studies 
are those presented in the previous chapter. Qu ite often, no clear distin ction is drawn between 
clusters as empirical factors and cluster initia tives aiming at creating or fostering clusters. 
This can be explained by the fact that case studies often serve the purpose to prepare for or to follow-up policy actions. In this sense, they represent an interesting source for mutual policy learning. 
The holistic case study approach can provide in -depth qualitative information that allows 
describing in some detail the essence of crucia l cluster linkages, processes and interactions 
                                                
 
28 The case studies compiled by the European  Cluster Observatory are available at 
http://www.clusterobservatory.eu/index.php?id=68, toge ther with the summary report on “Case studies 
of clustering efforts in Europe: Analysis of their potential for promoting innovation and 
competitiveness” drafted by the cons ultancy Competitiveness.com (2008). 
29 Several case studies of cluster initiatives that were launched under the regional programmes of 
innovative actions are available at 
http://ec.europa.eu/regional_policy/cooperation/interregional/ecochange/studies_en.cfm?nmenu=5 
30 See Technopolis (2008). The study is available at 
http://ec.europa.eu/regional_policy/sources/docgener/evaluation/pdf/innovative_projects_fin.pdf 
31 See Saublens et al. (2008) 
32 The Cluster Initiatives Database of The Competitiveness Institute (TCI) is available at 
http://www.competitiveness.org/cid 
EN 12   EN between innovation actors as well as other im portant factors for the emergence and working 
of a particular cluster. The drawback is th at this methodology is based on interviews with 
local experts that are very time-intensive to undertake and to analys e. As dynamics change 
over time, the results of such methodology may become quickly outdated. Individual 
anecdotal evidence is always case-specific, whic h makes it difficult to co mpare different case 
studies of clusters and which does not allow drawing general conclusions easily. Therefore, 
the case study approach is often used to complement statistical analysis.  
Figure 1: Overview of case studies of clus ters by the European Cluster Observatory 
 
Source : Competitiveness.com (2008), Europe INNOVA  Cluster Mapping Project draft report.28  
The second main approach of identif ying clusters concerns the various quantitative 
techniques  that rely on more sophis ticated economic modelling and are based on statistical 
methods. The approach followed by the European Cluster Observatory  is based on measuring 
indirectly the revealed effects of  co-locations of businesses that are assumed to be observable 
when a cluster is present, such  as concentrated employment ra tes or higher productivity. Other 
quantitative cluster mapping techniques exist but  are not providing continuously updated data 
covering all Member States. In this respect a choice had to be made for the European Cluster Observatory on the methodology to be followed. 
EN 13   EN Cluster mapping is a potentially powerful  tool that can help identify, on a statistical basis, the 
existing, growing, declining and emerging industry clusters in a given geographical area. It 
therefore offers the possibility to build cluster policies based on well-identified industrial strengths and weaknesses in a region. A cluster mapping study by Sforzi (1990) identified, for 
instance, 61 industrial dist ricts in Italy represen ting 5.4 % of all jobs in Italy, and 8.6 % of all 
manufacturing jobs.
33 Comprehensive cluster mapping  has also been applied by the US 
Cluster Mapping Project using a methodology developed by the Institute for Strategy and 
Competitiveness of the Harvard Business School.34 The European Cluster Observatory, which 
was established in September 2006 under Europe INNOVA, customised and further developed this methodology according to the European codification system and to suit 
European data availability and quality. It de livered the first results in June 2007, which 
provided a first insight of regional clusters  in 38 sectors, located in 32 countries.
35 
The European Cluster Observatory  provides, for the first time, a quantitative analysis of 
European clusters based on a fully comparab le and consistent methodology across all EU 
countries. It identifies clusters  based on regional employment da ta that are collected mainly 
from EUROSTAT and national or  regional statistical sources. The approach to cluster 
mapping used is deliberately based on the measurement of the revealed effects  that 
linkages and spill-overs have on the location decisions of companies , not on a direct 
measurement of such dynamic interactions between  the driving forces of a cluster. This has 
raised some misunderstandings as the statistical results are not always easy to interpret, in 
particular as they do not necessarily correspond with cluster initiatives aiming at creating or 
further developing clusters.  
The amount and quality of knowledge circulating and spilling over between firms located in a 
cluster is dependent upon the cluster's size, the degree to which it is specialised and the extent 
to which the locality (the region) is gear ed towards and focused upon production in the 
relevant industries comprising the cluster. These three factors, size, specialisation and 
focus , can be chosen to analyse whether the cluste r has reached ‘specialis ed critical mass’ to 
develop positive spill-overs and linkages. The European Cluster Observatory defines the 
extent to which clusters have achieved this specialised critical mass, by employing measures 
of these three factors as described below, a nd assigning each cluster 0, 1, 2 or 3 “stars” 
depending on how many of the below criteria are met.36 
                                                 
33 See also OECD (2007) and Isaksen & Hauge (2002). 
34 For more on information see http://data.isc.hbs.edu/isc/index.jsp and Porter (2003).  
35 The 38 traded cluster sectors are Aerospace, Instruments, Apparel, Automotive, Building Fixtures, 
Business Services, Chemical, Communications, Food, Agricultural, Distribution, Education, Entertainment, 
Heavy Machinery, Finance, Fishing, Fo otwear, Forest, Furniture, Construction, 
Hospitality, IT, Jewellery, Leather, Lighting, Cons tr. Materials, Medical, Metal, Oil and Gas, 
Biopharma, Plastics, Power, Production Tech.,  Publishing, Sporting, Textiles, Tobacco, and 
Transportation. Local sectors – such as local retail and other local services – that mainly serve local 
markets are not considered because  they are neither viewed as be ing exposed to direct competition 
across regions nor as tending to “cluster together”. They account for nearly 57%  of total employment in 
Europe. The 32 countries  in the analysis comprise the EU-27 and the five countries of  Iceland, Israel, 
Norway, Switzerland and Turkey. A description of the different cluster concepts and the statistical methodology applied can be found at http://www.clusterobservatory.eu 
36 If the number of employees in a cluster is less than 1,000 persons, the cluster is not given any stars to 
prevent the appearance of very small insignificant clusters. 
EN 14   EN • Size: if employment reaches a sufficient share of total European employment, notably if a 
cluster is in the top 10% of all regions in Eu rope within the same cluster category in terms 
of the number of employees; 
• Specialisation : if a region is more specialised in a specific cluster category than the overall 
economy across all regions, notably if a cluste r category in a region has a specialisation 
quotient of 2 or more;37  
• Focus : if a cluster accounts for a larger share of  a region's overall employment, notably if a 
cluster is in the top 10% of clusters within the same cate gory which account for the largest 
proportion of their region’s total employment  
The statistical mapping of regional clusters ba sed on an analysis of employment data by the 
European Cluster Observatory identified  more than 2000 regional clusters in Europe. On 
the basis of assigning one star for each of the following criteria size, specialisation and focus 
of employment within a region, 155 regional clusters register three stars (8%), 524 regional 
clusters two stars (26%), and 1338 one star (66%). Figur e 2 provides an overview.38 
Figure 2: Cluster presence in Europe – Resu lts from the European Cluster Observatory 
 Number of  
regional cluster Percentage of total 
of regional clusters Percentage of total 
of potential areas 
3 star clusters 155 7.68 % 1.58% 
2 star clusters 524 25.98% 5.34% 
1 star clusters 1338 66.34% 13.65% 
Total number of regional 
clusters (1-3 stars) 2017 100% 20.57% 
Total number of potential 39 
areas of cluster development  9804 n.a. 100% 
                                                 
37 The localisation quotient is calculated as the industry’s share of total employment in a given region to 
the industry’s share of total employment in all co untries considered in the analysis. A localisation 
quotient equal to 1 means that the given region is not specialized in the given industry. A localisation quotient equal to 2 means that the given industry is represented by a 100% bigger share of employment 
in the given region than the industry’s share of em ployment on the level of all regions. This indicates 
that the region is specialized in the industry. Further informa tion can be found for instance at: 
http://www.nordicinnovation.net/_img/cluste r_benchmarking_project_final_report.pdf 
38 The cluster portfolio strengths of each of the 32 analysed countries are summarised in the Annex of the 
European Commission’s (2007b) Europe INNOVA / PRO INNO Europe paper N° 5 on “Innovation 
Clusters in Europe”  available at http://www.europe-innova.o rg/ index.jsp?type=page&cid=8702&lg=en 
39 The total number of potential areas of cluster deve lopment is calculated by  multiplying the 258 regions 
analysed at NUTS 2 level (within the EU-27 coun tries, Iceland, Israel, Norway, Switzerland and 
Turkey) by the number of 38 cluste r categories applied, which excludes  sectors that mainly serve local 
markets.  
EN 15   EN It is important to stress that the identified clusters represent regional agglomeration effects  
based on employment data . If other indicators (which are currently not available) would be 
applied, a different picture may emerge. Furthermore, it is wort hwhile noting that the number 
and weight of the measured clusters is not stable over time. For example, between 2001 and 
2004 a “three star” cluster in Poland newly emer ged whereas such a to p cluster in Hungary 
disappeared. Even greater change s could be observed for “one star” and “two star” clusters, 
which may be either the effect of changing ma rket conditions or succe ssful cluster policies.40 
This quantitative approach has the clear advantage that it allows comparability between 
different countries and over time . Furthermore, the statistical data obtained by such an 
approach can be related to ot her statistical indicators, t hus offering new insights into 
economic realities and dynamics by further correlat ion analysis. Even if such results need to 
be interpreted with caution as they do not rev eal causalities they may nevertheless contribute 
to a better understanding of the economic importance of clus ters. Although statistical cluster 
mapping should not be confused with an impact assessment of cluster policies, the impact of 
such policies should ultimately result in eff ects that can be identified and measured by 
statistical cluster mapping, in part icular if (in future) more and better statistical indicators are 
made available for further analysis.  
The key advantage of an approach that is deliberately based on the measurement of the  
revealed effects of clusters  – and not on a direct measurement of dynamic interactions 
between the driving forces of a cluster – is that  of simplicity. It is not  necessary for such an 
approach to measure all different types of interactions, such as input-output relations, 
knowledge spill-overs, etc., quantify them and then  compare their absolute  weight relative to 
other factors that influence lo cations decisions, lik e wages and transpor tation costs. This 
approach is based on the assumpti on that if the intera ctions are meaningful, they should reveal 
themselves in the actual geogra phical patterns of economic activity. However, this remains an 
assumption and there is no proof that su ch linkages may also exist in reality. 
The main weakness of the quantitative approach of statistical cluster mapping is that it does 
not allow attributing the observed cluster perfor mance to its underlying factors. Furthermore, 
such an approach builds on an implicit  definition of clusters based on the concept of co-
location of industries , as well as on conventions for the categ orisation of data, such as for the 
thresholds used for the definition of the relative st rengths of clusters. In this context, a slightly 
different methodology has recently been followed fo r the identifica tion of clusters located in 
the Baltic Sea Region, with the view to better re flect the specific market realities in this 
region.41 It remains a challenge to verify the needs for such modifications at larger European 
scale. 
It has to be noted that the above described 3-star cluster classification system measures the  
relative but not the absolute strength of clusters . It only allows for an identification of the  
relative strength  of industrial agglomerations and is not  measuring the absolute strength of 
clusters in Europe. A comparison between the allocation of stars an d employment for the 
                                                 
40 See Ketels & Sölvell (2006). The report of the Cluster Mapping project of Europe INNOVA on 
“Innovation Clusters in the 10 New Member Stat es of the European Union” is available at 
http://www.europe-innova.org/servlet/Doc?cid=7752&lg=EN 
41 See Copenhagen Economics (2007) Internal Summary Report WP4 , BSR InnoNet, Draft Version, 
October 2007. More information about the Baltic S ea Region Innovation Netw ork (BSR INNO-Net) at 
http://www.proin no-europe.eu/index.cfm?fuseaction=pa ge.display&topicID=65&parentID=65. 
EN 16   EN automotive sector shows, for example, that a nu mber of important regional clusters in terms 
of employment are not amongst the 3-star regions (see highlighted area in Figure 3).42 This 
may be explained by the sector mix in the specific region. The existence of many strong 
sectors in a given region, for instance, necessari ly limits the score for specialisation and focus 
following the current methodology of the 3-star system. 
Figure 3: Comparison of the e valuation of automotive clus ter strength by the European 
Cluster Observatory between stars and employment  
Evaluation of automotive cluster strength:  3-
stars Evaluation of automotive cluster strength:  
Employment 
Regional Cluster Employment Regional Cluster Employment 
Stuttgart, DE 136 353 Stuttgart, DE 136 353 
Piemonte (Turin), IT 85 915 Piemonte (Turin), IT 85 915 
Oberbayern (München), DE  82 339 Oberbayern (München), DE  82 339 
Braunschweig, DE 79 997 Braunschweig, DE 79 997 
Dogu Marmara (Bursa), TR 44 901 Cataluña (Barcelona), ES 74 086 
Västverige (Gothenburg), SE 42 832 Île de France (Paris), FR 61 351 
Karlsruhe, DE 40 694 Lombardia (Milan), IT 51 631 
Niederbayern (Landshut), DE 37 960 Vlaams Gewest (Antwerp), BE 46 084 
West Midlands (Birmingham), 
UK 37 913 Dogu Marmara (Bursa), TR 44 901 
Sud – Muntenia (Ploiesti), RO 32 9 35 Västverige (Gothenburg), SE 42 832 
Severovychod (Hradec 
Králové), CZ 31 578 Karlsruhe, DE 40 694 
Stredni Cechy (Prague Surr), CZ 29 5 11 Niederbayern (Landshut), DE 37 960 
Castilla y León (Valladolid), ES 27 136 West Midlands (Birmingham), 
UK 37 913 
Source : European Cluster Observatory 
Another problem is the limited availability of statistical data  which often prevents to define 
and measure clusters in a suitable manner. Fi rst, the regional level – NUTS 2 – at which 
European data is available, is based on ad ministrative boundaries that may not reflect 
                                                 
42 These four highlighted regional clusters (Catal uña, Île de France, Lombardia and Vlaams Gewest) are 
all evaluated as 1-star.regional clusters by the European Cluster Observatory.  
EN 17   EN economic interactions.43 NUTS 2 regions differ significan tly in geographic and population 
size.44 Second, the industry level st atistical classification of economic activities – 4-digit 
NACE – at which European data is available,  is not granular enough to go beyond traditional 
sectors and reflect the full rich ness of clusters as groupings of economic activities from 
different sectors.45 Third, the only indicator that is avai lable in Europe ac ross all regions and 
industries is employment.46 This problem of data quality a nd availability obliges to reach a 
second-best compromise on which selected i ndicators to choose at European level. 
Another constraint is that th e current industrial classificatio n systems, whether NAICS (US) 
or NACE (Europe) do not sufficiently reflect the emergence of new industries , such as 
biotechnology. If the basic statisti cal data is not available, more  refined cluster sectors cannot 
be defined neither. One challenge in this respec t is to match and link the different statistical 
registers as well as to identify the different NACE activities (4-digit level) that should be 
comprised under specific  cluster activities.47 The boundaries between different sectors are 
constantly changing and this is not always reflected by the available statistical data. For example, it may be that some clusters do not reach the overall threshold applied for a 3-star 
cluster even though they are well known as strong clusters in thei r sector. This is for instance 
the case of the regions of Toulouse and Hamb urg in which strong aerospace clusters (both 
have a location quotient of about 13 in their cluster category) exist but the number of 
employees in this cluster sector is relatively small and therefore their share in the relevant 
regional economy falls short of the th reshold applied for a 3-star cluster.
48 
For these reasons, the approach used by the European Cluster Observatory needs to be 
continuously further developed and refined . The most important challenge is to verify  
whether the assumed  patterns of co-location  across individual industries sufficiently reflect 
European realities, taking into account r ecent technological developments and new cross-
sectoral patterns. To this e nd, the analysis needs to be further improved, by considering 
further statistical indicators a nd qualitative information. It seem s to be a reasonable approach 
to cross-check the results from the European  Cluster Observatory with other available 
statistical analysis, such as fr om the Regional Innovation Scoreboard49 or on European R&D 
                                                 
43 More information on the Nomenclature of Territo rial Units for Statistics (NUTS) is available at 
http://ec.europa.eu/eurostat/ramon/nuts/home_regions_en.html 
44 Some NUTS 2 regions, e.g. Denmar k, represent nations with national policy authorities while others, 
e.g. the German region around Stuttgart (“Regierungsbezirk Stuttgart”), represent sub-national regions 
with local authorities. Data at higher granularity – NUTS 3 and higher – is not generally available. In 
the US, economic areas have been defined by the government based on economic linkages, in particular commuting patterns.  
45 At this level, even the best allocation of industrie s to clusters results in cluster categories that are 
relatively similar to traditional industrial groupings and largely fail to capture to mix of service and manufacturing functions typical for clusters. In the US, data on the 5- and 6-digit NAICS level is 
available, which allows a more soph isticated analysis of cluster rela tions between different industries. 
46 In the US, additional indicators like wages and patents are available, allowing a more in-depths 
economic analysis of the impact of clusters on innovation and competitiveness. 
47 See Nielsen (2007).  
48 Such cases could be better identified in the future by combining employment data with value added 
variables, and this work that could be carried out by the European Cluster Observatory. 
49 The 2006 Regional Innovation Scoreboard (RIS) is part of the 2006 European Innovation Scoreboard 
(EIS), available at http://www.proinno-europe.eu/index.cfm?fuseaction=page.display&topicID= 
248&parentID=51 . The thematic report on the 2006 RIS is available at http://www.proinno-europe.eu/ 
ScoreBoards/Scoreboard2006/pdf/eis_2006_regional_innovation_scoreboard.pdf 
EN 18   EN and technological specialisations50 in the global economy. This would certainly enrich the 
results and test their robustness. The met hodology of the European  Cluster Observatory 
should also have the potential to be further a pplied to specific sectors by adding additional 
indicators and using a refined methodology. The fi rst case of this type will be provided under 
a study mapping maritime clusters, which app lies the star methodology of the European 
Cluster Observatory51. As this study will assess maritime clusters beyond their relative 
strength in regions, it will suggest additional assessment criteria to get a more complete 
picture of their economic value.  This approach should be app lied wherever possible in the 
future with the view to further enriching the cluster mapping database while ensuring the overall consistency of the methodology. The next  chapter provides a starting point for this 
analysis.  
                                                
 
50 Information on data on R&D are ava ilable at the ERAWATCH website at 
http://cordis.europa.eu/erawatch/index.cf m?fuseaction=intService.rdSpecialisation 
51 See the Commission Staff Working Document on Ma ritime Clusters, SEC(2007)1406 from 17.10.2007, 
available on application at http://ec.europa .eu/transparency/regdoc/recherche.cfm?CL=en 
EN 19   EN 2. THE ECONOMIC IMPACT OF CLUSTERS ON COMPETITIVENESS AND INNOVATION  
Clusters are seen as important drivers of comp etitiveness and innovation . This chapter 
presents the main statistical fi ndings currently availa ble on the economic im pact that clusters 
can have on competitiveness, economic grow th and prosperity, productivity, innovation and 
employment and thus explains w hy clusters may matter. The anal ysis of the potential impact 
of clusters is a field of great academic and po litical interest and numerous studies have been 
published in this field. This chapter is mainly  based on results of the cluster mapping project 
of the European Cluster Observatory52, the 2006 Innobarometer survey on the role of clusters 
(European Commission, 2006e)53 and the European Innovation Scoreboard54.  
It has to be admitted that the economic impact of clusters cannot be easily demonstrated in 
strict statistical terms . The problem already starts with a proper identification and 
measurement of clusters, as discussed in the previous chapter. Case  studies may tell more 
sophisticated stories but do not allow for furthe r analysis based on correlations with other key 
economic key indicators. The available data pr ovided by the above mentioned sources is only 
limited but still the best  available. Any conclusions on the economic impact of clusters must 
therefore be treated with great care. Further analysis is still needed to draw stronger 
conclusions, for example on the question of the relative strengths of clusters in Europe. 
2.1. Clusters and innovation performance of firms and regions 
From the concept of clusters it may be expected  that clusters provide a particularly fertile 
ground for firms to raise their innovation capacity. Clusters are well aligned with the 
modern approach of “open innovation”55 that suggests that innova tion is not created by 
isolated organisations but mostly in dynamic environments where competent organisations 
and skilled labour interact in a constructive and complementary way to assimilate existing 
knowledge and generate new ideas and products. Th e concept of clusters is very similar to 
this concept of “open innovation” which is nowadays broadly accepted. Similarities also exist 
with the concept of “triple helix”  that emphasises that innovation depends on the interaction 
between strong academic research (universiti es), dynamic entrepreneurship and the 
availability of risk cap ital (private s ector) as well as on a supportiv e policy framework (public 
administrations).56 
As described in more detail in Chapter 1, cluster firms benefit from the geographic 
proximity of other drivers of innovation  which facilitates the fl ows of tacit knowledge, the 
presence of a skilled labour as well as unplanne d interactions that are critical parts of the 
innovation process. Cluster firms interact more fr equently with research  institutions which are 
located in proximity than other firms and have an easier access to international networks and 
capital. Furthermore, within dynamic clusters, levels of personal exchanges between firms 
                                                 
52 More information on the European Cluster Observatory is available at 
http://www.clusterobservatory.eu/ 
53 The “ 2006 Innobarometer on cluster’s role  in facilitating innovation in Europe ” is available at 
http://www.proinno-europe.eu/admin/uploade d_documents/FL187_Innobarometer_2006.pdf 
54 The European Innovation Scoreboard is available at http://www.proinno-europe.eu/ 
index.cfm?fuseaction=page.display&topicID=5&parentID=51 
55 See Chesbrough (2003).  
56 See Etzkowitz & Leydesdorff (2000). 
EN 20   EN appear to be higher than in non-clustered locations.57 This type of “cross-pollination” of 
ideas  and innovation has been recogni sed as one of the main driv ers of the success of the 
Silicon Valley model.58 Another example is the successf ul Stockholm ICT cluster which 
exhibits higher rates of inter-firm labour mobility than the rest of the labour market and higher 
rates of intra-firm mobility than other comparable private-sector enterprises.59 Many more 
case studies suggest that clusters provide comp etitive advantages for those firms participating 
in them. The participation of firms in cluste rs may also be driven by the sheer need to 
cooperate due to the increasing co mplexity of innovation nowadays. 
The results from the Innobarometer 2004 su rvey which only interviewed “innovative 
companies” and of the Innobarometer 2006 which interviewed innovative “companies working in a cluster-like environm ent” provide further evidence that cluster firms are more 
innovative than non-cluster firms  (see Figure 4).
60 78% of the innovative companies 
working in a cluster introduced new or significa ntly improved products compared to the 74% 
of the 2004 Innobarometer. Similarly, 63% of  the innovative cluster companies introduced 
innovative production technology, compared to the 56% that the Innobarometer found 
amongst innovative European Unio n enterprises two years ago. These results suggest that 
innovation is indeed spurred by clusters. 
Figure 4: Comparison between cl ustered and non-clustered firms 
 
Source : European Commision (2006d) 2006  Innobarometer on cluster’s role in facilitating innovation in Europe  
Innovative companies in clusters  are also much more likely to  conduct market research than 
innovative companies generally (53% versus 33%). The greatest difference is, however, a 
direct derivative of operating in a cluster: innovative cluster companies are more than 
twice more likely to source out research to other firms, universities or public labs than 
                                                 
57 See OECD study (2007). 
58 See Saxenian (1994). 
59 See Power and Lundmark (2004). 
60 To allow comparability between the results of the 2004 Innobarometer and the 2006 Innobarometer 
(IB), only those companies from 2006 cluster-company sample were considered that also at least 
responded yes to one of the seven activities listed in figure 2 that possibly indicate innovation. Both reports, the “Innobarometer 2004 and the “2006 Innobarometer on cluster’s role in facilitating 
innovation in Europe”, are available at http://www.proinno-europe.eu/ 
index.cfm?fuseaction=page.display&topicID=250&parentID=51 
EN 21   EN were the average European innovative firms in 2004. This supports the view that clusters are 
encouraging knowledge sharing whic h may further stimulate innovation. 
Moreover, cluster firms patent and tradem ark their innovations more often  than other 
innovative companies. While 12% of the innov ative companies applied for a patent in 2004, 
the proportion among innovative companies operati ng in clusters in 2 006 is 29%. The same 
pattern applies to trademarks where the Innobarometer found 14% of innovative firms 
registering international trademarks in 2004, whereas 29% of the innovative cluster 
companies registered at least such tr ademark in the previous two years. 
The 2006 Innobarometer survey also shows that between 66 and 71% of companies active in 
cluster-like environments in the EU-25 report th at they see advantages of being part of a 
cluster.61 Moreover, when asked whether they added new services to their customers over the 
last 5 years, 53% of cluster companies agree that be longing to a cluster facilitated the 
extension of the scope of their activities , while 25% disagreed and 20% did not added any 
new services. 
Altogether, there are quite strong indications that  clusters foster innovatio n activities of firms. 
The link between clusters and innovation at re gional level is more  difficult to prove , due 
to the statistical problems di scussed in the previous chapte r which prevent sound correlation 
analysis. As a first approximation, it has been ca lculated how the number of patents produced 
within a specific region are correlated with th e strengths of regional cl usters as defined by the 
European Cluster Observatory. It seems that there is a positive relationship between cluster 
strengths and regional strengths in patenting , which is a strong indication for the positive 
relations between cluster strengths  and innovation in general, as  patents are a very good proxy 
for measuring innovation performance. 
                                                 
61 The score range between 66 and 71% depends on the relevant department in question. As these 
affirmative scores barely differ between different departments (Marketing, Sales, 
Procurement/acquisition/supply, R&D, Production and Human resources), the advantages appear to be 
viewed in a “more holistic way”.  
EN 22   EN Figure 5 Cluster strength and patenting level in European regions 
R2 = 0.357
345678
00 . 511 . 522 . 533 . 54
Region's cluster strengthRegion's 
patenting 
level
 
Source: European Cluster Observatory. ISC/CSC cluster codes 1.0, dataset 20070613 
From Figure 5 it can be conclude d that all EU regions without cl usters (i.e. evenly spread out 
employment across all sectors) are also characterised by a lo w level of patent activity. 
Reversely, all regions with many strong clusters  are among top performe rs with respect to 
patents.62 In the group of EU regions with a few ranked clusters, some are performing well 
and other less well which suggest s that the innovation performa nce of a region can not only 
be explained by the degree of specialisation, but also involves other aspects of the broader 
microeconomic business environment, such as labour quality, entrepreneurship, research and 
education or access to venture capi tal and advanced infrastructure. 
Further evidence suggesting a positive relationship between cluster strength and regional 
innovation strength is provided by a comparison  between cluster performance (as measured 
by the number of stars for their clusters) and the best performing innovation regions in 
Europe  (as measured by the 2006 Regional Innovation Scoreboard63). This comparison 
shows that 7 out of 19 regions having a strong cluster portfolio  (i.e. the highest total number 
of stars, equalling 25 stars or more as liste d in Figure 6) are among the top third most 
                                                 
62 Many regions with strong clusters that consist of large firms may implicitly produce more patents 
overall as large firms are generally more likely to produce more patents than SMEs. 
63 The 2006 Regional Innovation Scoreboard (RIS) benchmarks 208 European regions on the basis of 7 
indicators, including human resources in science and technology, patent applications and employment 
in medium-high and high-tech manufacturing. The 2006 RIS is part of the 2006 European Innovation 
Scoreboard (MERIT & JRC, 2007) available at http://www.proinno-europe.eu/ index.cfm?fuseaction=page.display&topicID =5&parentID=51 . The thematic report on the 2006 RIS is 
available at http://www.proinno-europe.eu/ScoreBoards/Scoreboard2006/pdf/ 
eis_2006_regional_innovation_scoreboard.pdf 
EN 23   EN innovative regions (i.e. among the top 33 most innovative regions out of 203 for which data 
were available). This result suggests that a pos itive correlation may exis t between the strength 
of regional cluster portfolios and regional innovation performance.  
Figure 6: European Regions by Cluster Portfolio Strength 
0 1 02 03 04 05 0Lombardia (IT) – med
Veneto (IT) – med
Istanbul (TR) – n/a
Cataluña (ES) – med
Emilia-Romagna (IT) – med
Stuttgart (DE) – high
Danmark (DK) – high
Île de France (FR) – high
Piemonte (IT) – med
Vlaams Gewest (BE) – high
Oberbayern (DE) – high
Centru (RO) – n/a
Karlsruhe (DE) – high
Düsseldorf (DE) – med
Rhône-Alpes (FR) – high
Sud - Muntenia (RO) – n/a
Ege (TR) – n/a
Valencia (ES) – low
West-Nederland (NL) – n/a
Total number of stars1 star 2 stars 3 starsRegion –RIS performance
 
Source : European Cluster Observatory. ISC/CSC cluster codes 1.0, dataset 20070606 
However, a more systematic link between cluste rs and innovation performance is difficult to 
establish as the “Regional Innovation Scoreboard” does not yet deliver information of 
sufficient detail and reliabilit y, due to missing up-to-date data from many regions. To improve 
this unsatisfactory situation is still a challenge to be addressed, with the view to better combining the statistical information from different sources. 
The results presented so far ar e also supported by a study of US clusters by Porter (2003), 
which shows that US regions that have a high proportion of their total workforce located in 
‘strong’ clusters produce a rela tively high number of patents.
64 
                                                 
64 Porter (2003) applies a slightly different methodology than the European Cluster Observatory in that he 
uses a broad cluster definition where employment in industries can be double-counted, yet used a 0.8 
location quotient (LQ) cut off to counteract the double counting. 
EN 24   EN Several academic studies have discussed the relationship between clusters and increased 
innovation .65 For example, Moreno et al. (2006)  investigate the presence of innovation 
clusters in 175 regions of 17 c ountries in Europe and show th at the organisation of innovation 
is spatially concentrated across regions for a ll of the 23 investigated  manufacturing sectors 
and that its extent and st rength increases over time.66 This study also suggests that 
institutional and geographical proximity are tw o reinforcing features conditioning innovative 
activity, which provides evidence for the presence of positive effects of the existence of homogenous clusters on innovation.  
The report on “Regional Clusters in Europe”  published by the European Commission 
(Isaksen & Hauge, 2002)
67 refers to studies for selected sectors that confirm these findings. A 
study on the European biotechnolo gy industry (Allansdottir et al., 2001), for example, shows 
that a relatively small number of local cl usters have a large majority of European 
biotechnology firms, public resear ch organisations, and patenti ng. The top 20 regions that are 
mainly located in a few countries account fo r nearly 70% of the biotechnology patents 
invented in Europe between 1987 and 1996. 
2.2. Clusters and specialisation 
The cluster mapping analysis of European cl usters by the European  Cluster Observatory 
shows that clusters are an important part of  the European economic reality. Based on this 
analysis it can be assumed that roughly 38% of all European employees work in 
enterprises that are part of a cluster . In some regions, this share goes up to over 50% while 
in others it is only about 25%, thus suggestin g different specialisation patterns in Europe. 
About one fifth (21%) of these employees are empl oyed in regions that are more than twice as 
specialised in a particular cluste r category as the average region.  
There is an even bigger divergence in the ge ographic concentration of  employment between 
the different cluster categories across Europe . While on average 32% of employment in a 
cluster category is more than twice as sp ecialised in a particular cluster category , individual 
cluster categories differ significantly in  the level of employment concentration , ranging 
from a share of below 10% to over 70%.68 Employment in cluster categories with a relatively 
small overall number of employees, like footwear  and aerospace, is concentrated in a few 
clusters that account for far more than 50% of all European employment in their category. On 
the other hand, employment in construction or edu cation as sectors with much larger absolute 
employment numbers are much mo re dispersed across Europe.  
                                                 
65 For an overview, see for instance Moreno et al. (2006), pp. 1236-1238. 
66 The analysis by Moreno et al. (2006) is based on a databank set up by CRENoS on regional patenting at 
the European Patent Office classified by ISIC s ectors (23 manufacturing sectors), which considers 175 
regions of 17 countries in Europe over two periods, 1994-1996 and 199-2001.  
67 The report (Isaksen & Hauge, 2002) published under the Observatory of European SMEs framework 
(Report 2002 / No. 3) is available at  http://ec.europa.eu/enterprise/library/lib-
entrepreneurship/series_observatory.htm 
68 See Figure 3 on page 11 of the Europe INNOVA / PRO INNO Europe paper N° 5 on ‘Innovation 
Clusters in Europe: A statistical analysis and overview of current policy support’  by the Directorate-
General Enterprise and Industry, which is available at http://www.europe-innova.org/ 
index.jsp?type=page&cid=8702&lg=en 
EN 25   EN Figure 7: Leading European Automotive Clusters 
 
Source : European Cluster Observatory. ISC/CSC cluster codes 1.0, dataset 20070606 
Automotive is an example of a cluster cate gory in which Europe shows clear regional 
specialisation. Automotive clusters – including cars, buses and tr uck assembly, engines and 
other components – are an area where Europe is among the strongest regions in the world. 
This success builds on a network of  39 statistically identified regional clusters (see Figure 7) 
that meet two or three of the cut-off values (i.e. stars)69 as discussed above and account for 
more than 50% of all European employment in the category. These regional clusters are 
interlinked by international valu e chain strategies of manufact urers and suppliers, which can 
capitalise on the differentiation of local cluster conditions.  
                                                 
69 According to the earlier described methodology (see chapter 1), 16 regional cluster were assigned 3 
stars and 23 regional clusters were attributed 2 st ars, while there an additional 8 regional clusters 
assigned 1 star out of a total of 259 regions. 
EN 26   EN A comparison made by the European Cluster Observatory on the differences of cluster 
strength between Europe and the US  using a comparable clus ter mapping methodology and 
data suggests that the average region in Europe is less concentrated than the average 
region in the U.S.  (see Figure 8). Out of the 38 cluste r categories analysed, 32 are more 
geographically concentrated in th e U.S. compared to Europe. Th is suggests that the degree of 
specialisation in Europe is less strong than in the US. 
Figure 8: Regional concentration of Eu ropean clusters compared to the US 
Aerospace
Business 
ServicesFinancial 
ServicesFootwear
ForestFurniture
Heavy 
ConstructionLeatherOil & GasTobacco
Transportation 
& Logistics
0.010.1110
0.01 0.1 1 10
EU concentrationUS 
concen-
tration
 
Source : European Cluster Observatory. ISC/CSC cluster codes 1.0, dataset 20070613 70 
Overall, the data analysed by the Eu ropean Cluster Observatory shows that  Europe lags on 
average behind the United States in terms of cluster strength  (as defined in terms of 
industrial agglomeration),  both from a regional a nd industry perspective.71 European regions 
tend to have a smaller sh are of employment in strong clusters , i.e. regional clus ters in which a 
region is more than twice as specialised as th e average region (see Figure 9). For the average 
region, Europe’s share of employment in strong clusters is a quarter lower than in the 
                                                 
70 The measurement of concentration uses a standard measures to asses disproportionality in distributions 
that takes into account how employment is distributed within every region. 
71 For this comparison, the same methodology and cut-off points that the European Cluster Observatory 
uses for the European data is also used for US data. 
EN 27   EN United States . For the median region, the gap is even larger and about a third. While the most 
specialised European regions even have a slig htly higher employment share than their U.S. 
peers, the differences get larg er among the less specialised regi ons where Europe lags behind.  
Figure 9: Employment share of strong  clusters (LQ>2) across regions 
European Regions U.S. Regions
Most specialised region: 74%
Average region: 21%
Median region: 18%Least specialised region: 0%Most specialised region: 70%
Average region: 28%
Median region: 27%Least specialised region: 0%European Regions U.S. Regions
Most specialised region: 74%
Average region: 21%
Median region: 18%Least specialised region: 0%Most specialised region: 70%
Average region: 28%
Median region: 27%Least specialised region: 0%
 
Source : European Cluster Observatory (2007). 
This leads to the question of why these differen ces across cluster categories exist. A possible 
explanation could be that market integration is still relatively weak in Europe . In this 
sense, differences in regional specialisation be tween Europe and the US may be explained by 
Europe’s legacy of national borders,  which remain an important physical, legal and mental 
barrier reducing the relative importance of clus ter effects as a driver of location choices. 
Observed patterns of geographic ac tivity in Europe are thus likely to provide a mix of cluster 
and legacy effects, providi ng less accurate information on in teractions between specific 
industries. 
The differences between co-location patterns in Europe and the US  are therefore likely to 
reflect the remaining barriers to cross-regional co mpetition in Europe as there is little reason 
to believe that the underlying technical and economic drivers of interactions should be 
systematically different. The revealed effects of  clusters should be st rongest, if the location 
choices of companies are not biased by barrier s to trade and investment across regions. An 
integrated large economy with the lowest level of  such barriers, such as the US, may thus be 
an environment which displays cluster effect s more clearly. A better understanding of the 
specific co-location pattern in Europe and their evolution over time remains a challenge to be 
further addressed. 
Another explanation may be that new industries emerge faster in  the US than in Europe . 
This could be caused by the observed different entrepreneurial cultures that exist in the two 
regions. The 2007 Eurobarometer Entrepreneur ship Survey (European Commission, 2007c) 
showed that the average American appears to  be far more inclined to set up their own 
business than Europeans. While 61% of Ameri cans would like to become their own boss, only 
45% of the Europeans have this wish. Europe’s pr oblem in terms of entrepreneurial attitude is 
mainly attributed to the fear of business failu re, bankruptcy and the uncer tainty of income are 
the top fears in the EU, while lack of finance remains to be the main problem.72  
                                                 
72 The results of the Entrepreneurship Survey of th e EU (25 Member States), United States, Iceland and 
Norway of the European Commission’ s Eurobarometer is available at 
http://ec.europa.eu/enterprise/enterprise_policy/survey/eurobarometer_intro.htm 
EN 28   EN 2.3. Clusters and economic performance 
It can be reasonably assumed that clusters are among the most relevant microeconomic 
factors  that influence the le vels of prosperity of a region. Cl usters and regional specialisation 
are empirically associated with higher levels of  prosperity. The European Cluster Observatory 
and other cluster mapping efforts – such as th e profiling of specialis ation patterns across 
cluster categories (groups of i ndustries that empirically co-lo cate) in regional economies in 
Europe, North America, and a few other countr ies – have provided systematic evidence on 
these links. Economic prosperity among the regions of Europe is linked to the degree of 
cluster strength . Regions with a higher share of empl oyment in industrie s that belong to 
strong clusters73 are generally more prosperous (see  Figure 10). While many factors other 
than clustering can have an impact on prosperity, the data provides clear evidence that clusters 
are significantly related to prosperity.  
Figure 10: Cluster Strength  and Prosperity (EU15) 
 
The role of clusters in explaining economic  performance of regions has been largely 
confirmed by other studies, although many are case  specific and large sc ale empirical reviews 
are extremely rare. Porter‘s (2003 ) study of US clusters , for instance, show s that US regions 
that have a high proporti on of their total workforce located in “strong” cluste rs enjoy a higher 
                                                 
73 Strong clusters are defined by a share of employees in  clusters with a location quotient larger than 2.  y = 83342x2 - 16467x + 22886
R2 = 0.3941
10,000 €20,000 €30,000 €40,000 €50,000 €60,000 €70,000 €
0% 10% 20% 30% 40% 50% 60% 70% 80%GDP per Capita (PPP adjusted), 2004 
 
Share of Employees in Strong Clusters, 2005 
Source : European Cluster Observatory. ISC/CSC cluster codes 1.0, dataset 20070510 
Note : Strong clusters defined by a Localisation Quotient (LQ)>2; NUTS Regions excluding Portugal and 
Greece. The localisation quotient for a given industry measures the exte nt to which a region is more 
specialised in an industry compared to the geographical area in question. 
EN 29   EN level of economic development in the form  of average wages and employment growth  in 
addition to the earlier me ntioned higher patenting.74 A study of Danish biopharmaceutical 
clusters  has confirmed these results, suggesting that  an increase of the location quotient (i.e. 
agglomeration) of one percent would lead to  a three percent increase in cluster average 
wages.75 With other words, the more specialised a re gion is the greater th e potential for higher 
wages. 
A new study by Wennberg & Lind qvist (2008) covering 4,000 new entrepreneurial firms in 
knowledge intensive industry sectors in Sweden shows that at the firm level clustered firms 
created more jobs, higher tax payments, and higher wages to employees .76 In addition to 
the effect on performance, the study also f ound strong empirical eviden ce that being located 
within a cluster has positive eff ects on the survival of new firms.77 The comparative survey of 
34 clusters in 17 countries summarised in the report on “Regional Clusters in Europe”78 also 
reveals that most of the surveyed clusters are growing in both the number of firms and 
employees, yet with a bias towards science- based and young clusters . The survey further 
suggests that regional clusters performing in general better than th e national average.  
While it can be assumed that clusters come w ith higher innovativeness, more employment and 
economic growth especially in th e first years of a local cluster’s  existence, a study by Brenner 
& Gildner (2006) points out that the positive relation between local clusters and economic 
performance may wear off with time , even though it is still visi ble, on average, in local 
clusters that exist for more th an 50 years. Importantly, the study highlights that over time 
“old” clusters seem to still have a positiv e long-term economic impact on unemployment, 
income and the local start-up rate only, while  a negative impact over time seem to emerge 
with regards to the involvement of a region in new technologies. This seems to confirm that clusters need to change and adapt to new co ntexts and challenges. Altogether, there is 
nevertheless strong evidence that a cluster-bas ed regional economy ge nerates better economic 
results.  
                                                
 
74 Porter (2003) applies a slightly different methodology than the European Cluster Observatory in that he 
uses a broad cluster definition where employment in industries can be double-counted, yet used a 0.8 
location quotient (LQ) cut off to counteract the double counting. 
75 See Copenhagen Economics (2007). .An increase in location quotient of, say, from 1.7 to 1.8 would 
bring about an increase in average wages for all empl oyees in the specific cluster of three percent on 
average. 
76 The study by Wennberg & Lindqvist (2008) is based on a combined employee-employer database by 
Statistics Sweden of 4,397 firms started in Sweden between 1993 and 2002, in 23 industries (5-digit 
SIC-equivalent industry codes) representing the following five sectors: telecom and consumer electronics, financial services, information techno logies, medical equipment,  and pharmaceuticals and 
biotech industries. The study is available at http:swoba.hhs.se/hastba/abs/hastba2008_003.htm  
77 Based on these results, they recommend that policies for entrepreneurship or cluster initiatives should 
take into account these differences in development between new firms located in clustered and non-
clustered regions. As new firms located in clusters were found to have a larger impact on local economic viability, they support entrepreneurship po licy (promoting firm formation through spin –offs 
or incubators) with a focus on clusters. 
78 See Isaksen & Hauge (2002). 
EN 30   EN 3. CLUSTER POLICIES IN EUROPE : CONCEPTS AND MAIN CHARACTERISTICS  
In recent years a large number of policy initiativ es were launched and implemented in Europe 
aiming at fostering existing clusters or crea ting favourable conditions for the formation of 
new ones. Such efforts may be labe lled as cluster policies. Currently, more than 130 specific 
national measures in support of clusters  in have been identified in 31 European countries 
and registered by the INNO-Policy TrendChart79 in cooperation w ith the ERAWATCH80 tool. 
Almost all EU Member States have now clus ter-specific measures or cluster programmes 
developed at national and/or regi onal level, suggesting that they are a key element of national 
and regional strategies  in support of innovation. 
This chapter describes the concept of cluster policie s and provides an overview about the 
typology and specific features of cluster policies in Europe  which are developed and 
applied at national and regional level. It also  presents the relevant policy initiatives and 
instruments that are develope d at Community level to comp lement national and regional 
efforts in this field, notably with the view to supporting mutual policy learning. Whereas these 
policy activities will be described in some de tail, it is not the purpose of this chapter to 
evaluate them or to present and assess policy options for bette r cluster policies. 
3.1. Concept and rational of cluster policies in Europe 
As explained in Chapter 1, cluster policy ca n be understood as a wider set of specific 
government policy interventions aiming at strengt hening existing clusters  or facilitating the 
emergence of new ones. Cluster polices may take different forms and follow different 
ambitions, ranging from framework policies setti ng general political objectives to specific 
cluster programmes defining specific meas ures, allocating funding and organisational 
responsibilities, and setti ng specific rules for partic ipation in the programme. 
Cluster policies are motivated by different considerations . Examples of successful clusters 
such as Silicon Valley have raised  the political interest in cluste rs and fuelled the desire to 
replicate them in other regions . For policy makers, the cluster approach responds to the need 
to follow a modern, multi-actor and cooperativ e approach (“triple helix”) which favours 
innovation and helps enterprises to  better face global competition.81 Cluster policies are often 
driven by the objective to stim ulate growth and innovation by addressing proven or assumed 
market failures82 that may prevent knowledge and tec hnology spill-overs to take place , such 
as coordination failures83, information asymmetries84 and path dependency85.  
                                                 
79 More information about the INNO-Policy TrendCha rt is available at http://www.proinno-europe.eu/ 
index.cfm?fuseaction=page.display&topicID=52&parentID=52 
80 More information about ERAWATCH is ava ilable at http://cordis.europa.eu/erawatch 
81 See Etzkowitz & Leydesdorff (2000). 
82 See Oxera (2006). 
83 Coordination failures  may arise because individual actors in th e cluster do not consider the spillovers 
they create for others (such as public returns), which can cause an under-provision of activities or 
investments. 
84 Information asymmetries  may exist concerning necessary information about what steps should be taken 
to derive maximum overall value. Such information is often is dispersed across many different actors, 
especially if there is no interactiv e dialogue and communication between them. 
EN 31   EN The cluster approach offers policy makers the opportunity to bette r streamline different 
policies towards the objectiv e of stimulating growth a nd innovation, by using synergies 
between them and engaging in a dialogue with other stakeholders on how to best remove 
obstacles and barriers for better eco nomic development. It this sense, cluster policies are a 
vital element of building strong innovation systems  which are seen as a pre-requisite for 
growth and jobs. As supported by evidence from the European Innovation Scoreboard there is 
a strong relation between the overall strength  of a national innovation system and the 
innovation performance. Only if supported by generally favourable framework conditions, 
innovation can flourish in the best manner. This  “horizontal approach” may find its best 
expression in cluster policies that aim at br inging different policies together and using 
synergies between them.  
While there are certainly examples of good practi ce in cluster policy, it should be noted that 
there cannot be a blue print for successful clus ter policies or a one-size-fits-all model as the 
specific industrial and systemic economic stre ngths and weaknesses in a region need to be 
taken into account. Cluster policies reflect where a country or region wishes to position 
itself in global competition with a mid-term perspective , building upon ex isting strengths 
and mobilising the necessary commitment from all innovation stakeholders to move into the 
right direction. The main risk re lated to this approach  is that these stra tegies may not take 
sufficiently into account the comp arative advantage of their regi on and country in relation to 
the competitive conditions of other areas. In othe r words, there remains a risk that strategies 
are too inward looking a nd not outward looking. 
Cluster policies may be divided into three different categories , reflecting the different 
motivations and policy objectives behind them . The first and most horizontal category 
concerns “facilitating policie s” directed towards creating a favourable microeconomic 
business environment for growth and innovation th at indirectly also stimulate the emergence 
and dynamics of clusters. A second category comprises “traditional framework policies”, such as industry and SMEs policies, research and inno vation policies, and regi onal policy that often 
use the cluster approach to increase th e efficiency of a specific instrument.
86 A third category 
consists of “development policies” aiming at cr eating, mobilising or strengthening a particular 
cluster category resulting specifi c sectoral cluster initiatives.  Strictly speaking, only this 
policies falling into this category should be labelled as “cluster policies”. 
According to a survey by the European Cl uster Observatory (Oxford Research, 2008)87, the 
number of countries adopting cluster policy in the time periods from 1990-1994, 1995-1999, 
2000-2004 and since 2005 is  fairly equal. Most countries started to use the concept in the 
period from 1990-1994 and in the period from 2000-2004. Considering the fact that around 
half of the countries used cluster policy for the first time in the period from 2000 until today, 
the policy area is still at an early stage in ma ny countries while maturing slowly in others.88 
                                                                                                                                                         
85 Path dependency  concerns intertemporal spillovers, which means that past actions have an influence on 
the current profitability of the actor. Actors in a cluster may ignore future (intertemporal) spillovers because of the time lag in reaping the benefits. 
86 See OECD (2007). 
87 The report of Oxford Research (2008) entitled “ Cluster policy in Europe – A brief summary of cluster 
policy in 31 European countries”  is part of the Europe INNOVA Cluster Mapping project and available 
at the European Cluster Observatory’s website at http://www.clusterobservatory.eu/upload/Synthesis_report_cluster_mapping.pdf 
88 A forthcoming article by Landabaso & Rosenfeld on “Public Policies for Industrial Districts and 
Clusters” also concludes that the development of clus ter initiatives is still quite recent in the majority of 
EN 32   EN As it may take 10-15 years before the full imp act of cluster policies and programmes may be 
seen it is therefore still too early to expect a serious asse ssment of their economic impact. 
This survey of the European Cluster Ob servatory also gives an overview of the main 
characteristics of the national and regional cluster programmes . Concerning the national 
level, the survey studied a to tal 69 national cluster programmes within 26 of the 31 countries 
investigated. As for policy focus, almost half of the national cluster pr ogrammes are classified 
as related to either industrial and enterprise policy and almost half are related to the science 
and technology. Almost every na tional cluster programme define s private business as their 
target group, followed by research and develo pment institutions. A particular focus on SMEs 
has been identified in 31 out of the 69 na tional cluster programmes. National cluster 
programmes that focus on particular lifecycles  of clusters tend to  focus on emerging and 
embryonic clusters. However, 36 of the 69 clus ter national programmes have no particular 
focus on clusters in a certain development stage. 
The Basque Country Competitiveness Programme: a positive example89 
The Basque Country Competitiveness programme to  support clusters aimed at responding to the 
general industrial decline in the region (back in the early 1990s) by promoting active co-operation 
among firms and associated regional innovation ins titutions. The strategic orientations of the 
programme were based on the results of a cl uster mapping and a governme nt sponsored dialogue 
among different regional stakeholde rs. Following this public/private dialogue, the government selected 
12 cluster initiatives with an overall annual spendi ng ranging from EUR 2 to 2.4 million per year over 
the last few years. The selected areas include tr aditional and high-tech sectors such as automotive, 
telecommunications, eco-industry, and energy. The cluster initiatives benefited from cooperation with 
the Basque Technology Network that involved di fferent innovation centres such as ten technology 
centres, four universities, four sectoral research centres and 14 intermediary innovation organisations. 
One evaluation, using a European Foundation for Quality Management (EFQM) model, noted positive 
results especially in terms of increasing co-operation between different innovation actors in the region. 
At regional level, the survey also identified a total of 88 regional cl uster programmes within 
17 out of the 31 European countries under investigation. Among the 84 out of these regional 
cluster programmes for which an overall policy focu s was stated, 52 have a regional 
development focus, 40 an industry and enterprise focus and 30 programmes target the area of science and technology. The dominating target  group of regional cluster programmes is 
businesses. 81 of the 84 programmes fall into  this category. Among the remaining groups, 
there is a fairly equal distribution among res earch institutions (52 programmes), educational 
institutions (45 programmes) and public auth orities (43 programmes) . Based on a holistic 
perspective, this proves that it is common to have several ta rget groups per programme. The 
average number of target groups per programme is  three. In terms of su pport, 29 out of the 88 
regional cluster programmes offer only finance, 31 only knowledge/network and 25 
programmes offer both. 
The survey further analyses the sources of financing for national cluster programmes in 
Europe and estimates that national budgets are the main source of funding for 63% of cluster 
                                                                                                                                                        
 
European regions. Nevertheless, they also state that  these initiatives have in several forms inspired new 
policy tools that are based on more efficient public-private partnerships and business networking. They advise that these experiments proceed as long as le ssons learned (successes and failures) are effectively 
shared among regions. 
89 See OECD (2007) . 
EN 33   EN programmes, while EU Cohesion Policy is support ing 19% of national cluster 
programmes in Europe . Under the Regional Operational Programmes for innovation in the 
period 2000-2006, community funds have co-financed in particular scien tific infrastructures 
such as science parks and incubators as well as  networking activities needed to create links 
between regional authorities, businesses and universities.  
The new European Regional Developmen t Fund Regulation for the period 2007-2013 
includes explicit support to bus iness networks, public-private partnerships and clusters.90 
Moreover, the Community Strategy Guidelines on Cohesion91, in line with the Lisbon 
Strategy, recommends several explicit cluster-re lated actions under the pr iority of improving 
knowledge and innovation for growth.92 In this context, appr oximately 86 billion € of 
Cohesion Policy funds are allocated to innova tion in the EU-27, for the period 2007-2013 of 
which considerable amounts will support clus ter initiatives and their infrastructures. 
Three examples of Community support to regional cluster initiatives: 
Oulu ICT cluster: successful networking  
With the stimulation of funding from Cohesion policy, a major effort has been carried out to integrate 
separate initiatives, actions and programmes in the Ou lu region within the framework of the so-called 
Oulu Growth Agreement. The agreement focuses on five clusters, ICT being one of them. Industry 
forums that bring together some 150 enterprises are the core feature of the cluster development 
programmes of the agreement. The Mobile Foru m is supporting R&D and business development for 
mobile products and services and the exploitation of the spearhead initiative “Octopus network”, 
which is an open innovation and testing environm ent for mobile technologies. Octopus also provides 
education in mobile technology re lated fields. Funded by the Structural Funds in 2002–2004, Octopus 
has partnered with Nokia and some 60 other comp anies, the City of Oulu and Higher Education 
Institutions of the region. 
In 2005, the volume of R&D expenditure in the Ou lu region was € 688 million (i.e. some €3.400 per 
capita, which presumably is one of the highest figures in the EU). Enterprises account for the majority 
of these expenditures. The volume of public sector’s (i ncl. VTT) expenditure in R&D is approximately 
between €30–40 million. Moreover, in 2005, 117 Finnish private equity companies made investments 
worth of some €35 million to both new and establis hed companies located in Northern Finland. 
                                                 
90 See in particular Articles 4 and 5 of the “Regulation (EC) No 1080/2006 of the European Parliament 
and of the Council of 5 July 2006 on the European Regional Development Fund” published in the 
Official Journal of the European Union on 31.07.2006 (OJ L 210, page 1). 
91 See “Council Decision of 6 October 2006 on Community strategic guidelines on cohesion 
(2006/702/EC)” published in the Official Journal of the European Union on 21.11.2006 (OJ L 291, page 
11). The text is available at http://ec.europa.eu/regional_policy/sources/docoffic/2007/osc/index_en.htm 
92 This includes the guidelines of “strengthening cooperation among businesses and between businesses 
and public research / tertiary education institutions, for example, by supporting the creation of regional 
and trans-regional clusters of excellence”; “mak ing regional RTD innovati on and education supply 
more efficient and accessible to firms, in particul ar SMEs, for example by establishing poles of 
excellence, bringing together high technology SMEs around research and technological institutions, or 
by developing and creating regional clusters around large companies”; and “providing business support 
services to enable enterprises, and in partic ular SMEs, to increase competitiveness and to 
internationalise, in particular by seizing the opport unities created by the internal market” adding that 
“[b]usiness services should prior itise the exploitation of synergies (f or example, technology transfer, 
science parks, ICT communication centres, incubators  and related services, cooperation with clusters) 
and give more traditional support in the areas of management, marketing, technical support, 
recruitment, and other professi onal and commercial services”. 
EN 34   EN The OMNIPACK cluster: A pioneer regional cluster 
The Czech OMNIPACK cluster was initiated by a key industrial holding, the PolyPlast company, 
which also provided co-financing. More than 300 fi rms and other organisations  (such as universities) 
were contacted during the launch phase of this initia tive of which 21 organisations agreed to become 
part of the new cluster and to participate in the ERDF co-funded project. The impetus for 
establishment of the cluster came from the associati on of packaging companies operating mainly in the 
Královehradecký region, which is the centre of th e packaging industry in the Czech Republic. The 
ERDF co-financed Clusters Measure was seen as  an opportunity to sp eed up and broaden co-
operation, and the OMNIPACK cluster project was am ongst the first to seek support for this process.  
Cambridge high-tech Cluster: Cohesion Polic y support is far more than just subsidies93 
The Cambridge Cluster is one of the world's lead ing high-technology clusters, home of around 1500 
high technology ventures and 40 000 jobs. It emerged in the 1980s around the university and the wide 
research talent located in the area, under the push of an informal network fac ilitated by Barclays Bank. 
Financial support of Cohesion Policy or public  national sources would make no difference. 
The St John’s Innovation Centre played a relevant ro le in the management of the cluster since the 
1990s, which is an important activity for cluster grow th. Accredited quality standards in the provision 
of business support services can strengthen support to  clusters. The accreditation of the St.John’s 
Innovation Centre as a Business Innovation Centre (BIC) and its membership in the European 
Business and Innovation Centres (BIC) Network 94 may have helped in the Ce ntre’s contribution to the 
emergence of the cluster. These regional Centres are,  in poor regions, supported by regional Cohesion 
Policy funds. Their European umbrella organisa tion, the European Business Network (EBN) was 
launched with the financial and conceptual support of Cohesion's policy initiative Innovative Actions. 
Nowadays it is independent from public subsidies. 
Currently, EBN manages the “European Community Business and Innovation Centre Trademark” on 
behalf of the European Commission. This confer s on EBN the responsibility for granting, renewing 
and withdrawing licences under the co-ordination of  the European Commission’s Directorate-General 
for Enterprise and Industry. 
Although many clusters have emerged spontaneous ly without a specific policy support, the 
role of the public sector in supportin g specific cluster- related activities  is considered by 
many cluster firms as important, as pointed out by the Innobarometer 2006.95 Over 68% of 
company managers working in a cluster-like en vironment agree that publ ic authorities have a 
fundamental or important role to play to suppor t the cluster, while 13% see a limited role and 
only 15% say that public authorities  have no role to play in supporting their cluster. It is 
worthwhile noting that some remarkable nati onal differences exist with respect to the 
perceived role of the public sector in support of  clusters which is most strongly welcomed in 
the South European countries such as Portugal, Spain and Italy, whereas it  is less supported in 
many new Member States.  
This survey also juxtaposes the current rec ognised provision of support instruments with 
companies’ expectations for improveme nt in support activities  (see Figure 11). Cluster 
companies report that they are currently provid ed most assistance from public authorities in 
form of traditional support instruments such as by channelling and publishing information as 
                                                 
93 See the report on “'Regional Research Intensive Cl usters and Science Parks” (Saublens et al., 2008) 
published by the European Commission in the framework of the Regions of Knowledge initiative. 
94 For more information about St. John’s Innovation Centre see http://www.stjohns.co.uk 
95 The 2006 Innobarometer on Clusters (European Commission, 2006e) is available at 
http://www.proinno-europe.eu/admin/uploade d_documents/FL187_Innobarometer_2006.pdf 
EN 35   EN well as through actions intended to enhance the reputation of the cluster or region. On the 
other side, the most important  areas where cluster firms de sire improvement are support 
activities for facilitating administrative procedur es (reported by 74% of the firms), facilitating 
information flow, getting more finance for carrying out specific projects, and in improving the branding of their region. The biggest percei ved gaps between the current provision and 
desired better support ac tivities concern tax reductions, the facilitation of administrative 
procedures and support for trans-national coop eration. Concerning th e latter, 65% of the 
interviewed cluster firms responded that public  authorities should improve the support to 
increase their trans-national relation with othe r clusters or geographi cal areas; while only one 
third of them reported that they are curre ntly receiving support in this domain. 
Figure 11: Support activities of public authorities:  
Assessment of current levels and desire for improvement 
 
Source : European Commission (2006e) Innobarometer 2006 on clusters.  
Although the topic of evaluation of cluster policies and programmes  is important for policy 
makers in order to assess results and identify improvements, this area is still largely undeveloped. Usually, the indicators for measur ing cluster policy impact  involve the creation 
of new firms, growth in output, profits and e xports, the number of in novations produced in 
cooperation, etc. However, su ch detailed statistical regi onal and cross-border data is 
notoriously difficult to collect. 
It is difficult to measure the impact of cluster policies and programmes as most of their effects 
are only indirect and affected by many other factors. This makes it very difficult to establish 
clear causal links between cluster policie s and programmes and their potential impact . 
Moreover, the time horizon renders difficulties since some economic and social benefits 
materialise only in the long term. As the topic of  impact assessment is considered mainly as 
technical problem, it seldom receives full attenti on at the highest levels of decision-making. 
To better address this issue, for example as part of the Lisbon process, still remains a 
challenge. Besides that, cluster policies an d programmes should also be assessed more 
frequently against the expectations of the stakeh olders as there seem to be some gaps between 
their expectations and the support mechanisms  offered by cluster policies and programmes. 
EN 36   EN 3.2. The role of trans-national cooperati on at policy and programme level for 
strengthening clusters 
Cluster policies are rightly seen as an instrument to improve national and regional 
competitiveness , which explains why only few of the cluster programmes have an 
international dimension. This perception of national and regional-centric approaches has 
recently started to change. Taking into account the effects of globalisation, which strengthens the competition between different locations but offers also new scope for business cooperation along the different va lue chains, trans-national clus ter cooperation appears in a 
different light. Increasing ly, it is recognised that a country cannot be excellent across the 
board  and that more specialisation is needed in order to stay competitive. 
At the lowest level, mutual policy learning  is a motive for closer cooperation among those 
responsible for cluster policies and programmes. Learning from the experience of others, 
adopting successful practices, avoiding mistak es, and being aware of new challenges and 
policy trends in this area, helps to advance fa ster and readjust cluster policies towards new 
emerging needs and challenges. However, a pre- condition for this type of cluster policy 
cooperation is that the participan ts share the same interests. W ithout further incentives there 
seems little interest to share experience with  those who still have to climb-up the ladder 
before reaching the same maturity as those who started with cluster policies already many 
years ago. 
A second motivation is the interest to jointly develop practi cal tools and solutions  for 
pertinent problems related to cluster policies an d programmes, such as the search for better 
methodologies to map clusters, to identify emer ging new markets, to better measure cluster 
performance or to assess the impact of cluster initiatives in order to better monitor evolution of clusters and the efficiency of their cluster initiatives in their territory. The development of such tools can often be done more easily togeth er with other policy makers, taking advantage 
of the experience that some partners may have  on particular areas. Su ch activities may be 
developed independently if the involved regions share the same boarders or not. 
Thirdly, different countries may have a joint  interest in bundling effo rts to build strong 
clusters or cluster cooperation  in their region, by sharing speci alised research infrastructures 
and testing facilities an d facilitate knowledge transfer fo r cross-border cooperation. This 
requires developing a long term joint strategy in order to facilitate the development of strong 
clusters “born global”. This most ambitious type of cluster coopera tion may be limited to 
cross-border cooperation in regi ons with a strong common cultura l identity, such as the Baltic 
Sea Region or Central Europe. 
Although upstream policy cooperation for cluster de velopment is a powerful tool, it seems to 
be a rather difficult task  for many policy authorities due th e presence of different types of 
market and cultural barriers. The difference acro ss cross-regions in understanding the benefits 
of cooperation at policy level is  a clear barrier that has an impact on the level of regional 
commitment for cooperation. In some counties or regions policy makers are sufficiently aware 
of such benefits, in others not. Bridging this  gap would require openness and trust between 
public authorities and/or privat e actors which is often missing. 
In addition, developing and sust aining trans-national c ooperation at policy le vel requires that 
governments devote human and financial resources to international project s, whereas there are 
strong political pressure s keeping them for implementing own priorities and plans. Matching 
EN 37   EN between different expectations and  finding practical ways to implement joint initiatives is 
in most cases difficult, if not impossible . Specific reasons which may discourage trans-
national cluster cooperation at policy level are related to how cluste r policy programmes are 
designed and implemented in ea ch country and at which leve l. In many cases, managing 
cluster programmes may involve in the same c ountry different ministries. Moreover, cluster 
programmes can be developed in some countries at regional level while in other countries at 
national level only.  
For these reasons, it may be reasonable to c onclude that although tr ans-national cluster 
cooperation would be highly beneficial it is unlik ely to appear spontaneously very often. Most 
often, such cooperation remains limited to partne rs of the same region even if the common 
policy problems at stake could be better solved by wider coope ration. This suggests that 
Community instruments facilitating trans-na tional cluster policy cooperation would 
offer strong benefits . Whereas they exist to  support mutual policy le arning and, to a lesser 
degree, knowledge sharing in the design of better cluster policie s, the strategic dimension of 
trans-national cluster cooperation still needs to be addressed. 
3.3. Community support for transnational cluster cooperation at policy and 
programme level: First resul ts and future challenges  
European initiatives in support of clus ters should be, as much as possible, 
complementary to national and regional efforts , in order to better e xploit synergies and to 
support country-specific priorities. On the othe r hand, regions and Member States should take 
maximum advantage of the financial instrument s available at Community level to strengthen 
their clusters and to open them to trans-national cooperation.  
The provision of neutral and comparable information  on clusters and cluster policies 
developed in the Member States  by the European Cluster Obse rvation is a major contribution 
for promoting mutual policy learning at EU leve l and to promote a fact -based policy approach 
towards cluster support. Even if  the current methodology to map clusters in Europe does not 
allow to clearly attribute the st rengths of clusters to the under lying factors, cluster mapping 
helps identifying regional strengths and provi des a better overview of who is doing how on 
what. This may reduce the risk of duplication of efforts, by encouraging regions to invest in 
cluster areas which are not already overcrowded. 
Moreover, the provision of policy learning platforms  which allow Member States and 
regions to learn from others in  the design of cluster policies is  another example of Community 
support for trans-national cluster policy co operation. Examples include the Regional 
Innovation Strategies (RIS)96 scheme that, since 1994, have helped many catching-up EU 
regions to upgrade their innovation strate gies, the Innovative Actions Programme 2000-
200697 co-financed by the European Regional Deve lopment Fund (ERDF) as well as the new 
Regions for Economic Change98 initiative. This new initiative launched under Cohesion 
                                                 
96 More information on the RIS scheme is available at http://www.innovating-
regions.org/network/regionalstrat/index.cfm 
97 More information on the Regional Programme s of Innovative Actions is available at 
http://ec.europa.eu/regional_policy/innovation/intro_en.htm 
98 More information on the Regions for Economic Change initiative is available at 
http://ec.europa.eu/regional_policy/cooperation/interregional/ecochange/index_en.cfm?nmenu=1 
EN 38   EN Policy, aims to leverage the experience of a dvanced regions to other regions wishing to 
improve.  
The new “ European Territorial Cooperation ”99 Objective for the 2007-2013 period – with 
the aim of supporting an integrat ed territorial development, interregional co-operation and 
exchange of good practice –, has streamlined its focus on innovation. EUR 2 billion are allocated to innovation in the EU-27 and inter-clus ter activities that gather  several regions is a 
relevant part of this. 
In support of mutual policy le arning, a first generation of p ilot projects and networking 
activities was launched under the PAXIS initiative  aiming at the identification of “good 
practice” examples and developing  tool boxes for establishing clus ter initiatives. As a result, a 
great number of successful practices have been identified and transferre d to other regions in 
key areas, such as start-up development, i nnovation financing, technolo gy transfer, incubation 
and entrepreneurship. The “PAXIS Manual for Innovation Policy makers and practitioners”, 
which describes these practices in detail, can also provide useful gui dance for the set-up and 
management of clusters.
100 
However, most of these pilot projects are facilitating mainly ne tworking among cluster 
initiatives and do not always reach the political level. Furthermore, they have reached their 
limits as it appears now to be obvious how to best design and im plement new or better cluster 
policies at regional or national level. There is plenty of “good practice”  to learn from. The 
remaining challenge is to consolidate this information and to provide it in a more user-friendly manner. This may however not prevent th at such information is rapidly outdated and 
difficult to replicate. A fundamental challenge is  that the design of regi onal cluster policies is 
motivated by diverse intere sts and aspirations. Clearly, one size does not fit all . This raises 
the question of who can best learn what from whom, calling for different configurations in 
cluster policy learning.  
In the further development of  the Commission’s innovation po licy, these asp ects of policy 
learning could be specifically taken into account in pursuit of “better innovation policy 
governance” . Existing guidance material for the se t-up of national and regional cluster 
policies could be further discussed and tested with governmental experts from all levels and 
maintained over time. The Innovating Regions of Europe
101 (IRE) network may play an 
important role to further disseminate this information material as well as the European Commission (2007d) publication “I nnovative strategies and actions : Results from 15 years of 
Experimentation” that provides a synthesis of experience from the Innovative actions 
programmes of the Cohesion policy and guidan ce as to how innovation and experimentation 
should be continued in th e programming period 2007-13.
102 
Facilitating interregional coopera tion is also part of Cohesion policy, which has recently 
launched a new initiative, “Regions for Economic Change”103 as a further step in the efforts 
                                                 
99 The “European Territorial Cooperation” replaces and reinforces the form er Community Initiative 
INTERREG. 
100 More information on PAXIS is available at http://cordis.europa.eu/paxis/src/home.htm 
101 More information on the IRE network is availa ble at http://www.innovating-regions.org/index.cfm 
102 The European Commission Working Document (2007e) is available at 
http://ec.europa.eu/regional_policy/innovation/2007/guide_innovation_en.pdf 
103 See European Commission (2006d) Communication COM(2006) 675 final of 8 November 2006. 
EN 39   EN to enhance its contribution to gr owth and jobs. This aligns w ith the modernisation objectives 
of the Lisbon Agenda and keeps the focus on th e need for innovation. Cluster relevant themes 
included in this initiative in clude “bringing innovati on quickly to the market”, “improving the 
capacity for research and innovati on”, “improving monitoring of environment and security by 
and for the regions”, “improving knowledge a nd innovation for growth” and “improving the 
capacity of regions for research  and innovation”. This initiative capitalises  on experience in 
the period 2000-2006 under the INTERREG IIIC initiative supporting interregional cooperation and the URBACT network for exchange  of best practice between European cities. 
These two programmes created numerous netw orks linking regional  and local actors 
throughout Europe. This know-how provides a valuab le asset that regional policy can bring to 
economic development in Europe – in the form of “relationship capital”.  
As a pilot of the Regions for Economic Change initiative, the “ Clusters Linked Over 
Europe” (CLOE)  project has brought together 18 part ner organisations from 14 regions to 
cooperate in the development and managing of cluster initiatives.
104 This included mutual 
learning from staff exchanges as well as the de velopment of detailed regional clusters action 
and subsequent peer review from other partners and the European Commission. Of 
importance for the success of the project  was the signing of the Memorandum of 
Understanding for the process of engaging the Managing Authorities of the Operational 
Programmes of the Structural Funds in order to ensure that good practice ideas are translated 
in to action.  
The EU can be instrumental in fostering tran s-national cooperation betw een cluster policies at 
policy or programme level. Based on the ERA-Net approach developed under FP6105, the four 
“INNO-Nets” on clusters currently funded under the PRO INNO Europe initiative follow 
that approach.106 Such activities aim at promoting  mutual learning, identifying and removing 
barriers, and jointly developing and testing new policy instruments for SMEs. Two of the 
networks, which are formed by representatives  from national and regional governments and 
innovation agencies, deal with bringing together the cluster programmes of regions located in 
a given geographical area, such as the Baltic Sea Region and Central Europe, while the two other initiatives aim at devel oping joint actions in the area of  technology transfer, technology 
take up, and internationalisation, specifi cally for SMEs involved in clusters.  
These four INNO-Nets es tablished together the European Cluster Alliance
107 which is an 
open platform for policy discussi on and development of joint actions and practical tools in the 
area of cluster policy. The Alliance facilitates cooperation between the partners involved in 
these initiatives in working on a number of hor izontal issues such as cluster management, 
cluster support funding, and exploitation of cl uster mapping results for policy purposes. The 
Competitiveness Council of December 2006 high lighted that the specific innovation support 
initiatives under Europe I NNOVA and PRO INNO Europe are important elements of the 
broad-based innovation strategy an d explicitly welcomed the Co mmission’s initiative of the 
European Cluster Alliance at stimulatin g practical cooperation between regional 
                                                 
104 More information on the CLOE network is available at http://www.clusterforum.org 
105 More information on ERA-Net is available at http://cordis.europa.eu/coordination/era-net.htm 
106 More information on the INNO-Nets is available at http://www.proinno-europe.eu/ 
index.cfm?fuseaction=page.display&topicID=55&parentID=55 
107 More information about the European Cluster Allia nce is available at http ://www.proinno-europe.eu/ 
index.cfm?fuseaction=page.display&topicID=223&parentID=50 
EN 40   EN governments.108 This shows that Member States have realised the importance of the trans-
national dimension of clusters and the compleme ntary role that the European Commission can 
play in this regards.  
Many of the activities carried out by the curren tly more than 70 members of the European 
Cluster Alliance are of direct impact for SMEs. For example, eleven regions from Central and 
Eastern Europe working together in the CEE-ClusterNetwork109 signed on 28 November 2007 
in Brussels the CEE Cluster Agreement , expressing their commitment to transnational 
cooperation and joint development of common st rategies for future innovation and cluster 
policy.110 Existing innovation and cluster progra mmes were analysed and common Quality 
Guidelines defined that will form the basis for the development of operative Cluster Action Plans and the implementation of 2- 3 cross-border pilot actions to the benefit of better support 
services for SMEs.
111 
The CLUNET project aims to implement concrete  joint pilot projects  regarding cluster 
innovation and development policies.112 The project has identified a wide range of policy 
actors and programmes supporting the most dynamic growing clusters with various policy 
tools, like SME internationalisation and inc ubation policies. It has designed a number of 
concrete pilot cross-border cooperation initia tives which support growth and innovation for 
example in the field of aerospace industry, environmental business or marine energies. 
The INNET project that brings together a consortium of 14 part ners representing national and 
regional innovation public bodies aims to identi fy areas of common inte rest between partner 
organisations and develop joint policy actions to support trans-national cooperation 
between innovative SMEs  involved in clusters. As a practi cal example, this project launched 
a first joint call for proposal s with a budget of 5 Mio € in April 2008 and further calls are 
expected in 2009.113 The objective of these calls is to  facilitate the creation of business 
linkages between innovative SMEs for exchangi ng technical knowledge, developing research 
projects, and supporting technolo gy transfer activities and m obility staff among them at EU 
level. A series of information days are orga nised in each participant country in order to 
encourage participation of SMEs.  
These examples demonstrate that there is inde ed scope for and intere st in trans-national 
cluster cooperation at policy level. However, as confirmed by feedback from participants, 
generally, this type of cooperation would no t take place without financial support from 
the Commission. Only  through European funding the more advanced administrations are 
                                                 
108 See Council of the European Union (2006) Council Conclusions on a broad-based innovation strategy: 
Strategic priorities for in novation action at EU level , 2769th Competitiveness Council meeting, 
Brussels, 4 December 2006, available at 
http://www.consilium.europa.eu/ueDocs/cms _Data/docs/pressData/en/intm/92107.pdf 
109 More information on the CEE-Cluster Ne twork is available at http://www.proinno-
europe.eu/index.cfm?fuseaction=page .display&topicID= 66&parentID=55 
110 The press release on the CEE-Cluster Agreemen t can be found at http://www.proinno-europe.eu/ 
extranet/NWEV/uploaded_documents/Press-
release_CEE_Cluster_Agreement_Signing_Event_071128_Brussels.pdf 
111 As an example, the ten operative cluster initiatives and networks in Upper Austria involve some 3,000 
companies with a special focus on SMEs. 
112 More information about the CLUNET project is  available at http://www.proinno-europe.eu/ 
index.cfm?fuseaction=page.display&topicID=67&parentID=55 
113 Further information about the INNET project and the call for proposals is available at 
http://www.proin no-europe.eu/index.cfm?fuseaction=pa ge.display&topicID=71&parentID=71# 
EN 41   EN ready to share expertise with  those who started more recen tly with cluster policies and 
programmes and who have therefore a special interest to learn, in particular in view of a more 
efficient implementation of regional development strategies.  
In many areas, good progress has been made to prep are for closer cooperation between 
cluster policies and programmes  from different Member States and regions, such as 
documented by Memoranda of Understanding and the launch of joint pilot projects. 
Furthermore, different public administrations are working now more closely together in 
improving methodologies for cluster mapping and impact assessment. This would not have 
been achieved without the Community  initiatives launched so far.  
Still more progress needs to be done with res pect to the removal of practical legal 
constraints for closer cluster policy cooperation  among different Member States and 
regions. This would require the developmen t and practical application of new legal 
instruments for cross-border cooperation, such  as the “European Grouping of Territorial 
Cooperation”.114 More fundamentally, common visions for future cluster policies are still 
widely lacking  as there is no upstream policy coordinatio n. This challenge still needs to be 
addressed. 
                                                 
114 See Regulation (EC) No 1082/2006 of the European Parliament and of the Council of 5 July 2006, as 
published in the Official Journal of the European Union L210, p.19 on 31.07.2006, available at 
http://ec.europa.eu/regional_policy/sources/docoffic/official/regulation/newregl0713_en.htm. 
EN 42   EN 4. CLUSTER INITIATIVES AND CLUSTER ORGANISATIONS IN EUROPE  
As a result of the cluster policies and progr ammes launched in recent years, many cluster 
organisations were newly built up or reinforced. More than 500 cluster organisations are 
estimated to exist in Europe , with different tasks and sta ff support. Managing clusters is 
emerging as a new profession aiming at provi ding specific support to firms organised in 
clusters.  
This chapter describes the main role cluster orga nisations play in support of cluster initiatives. 
Special emphasis is paid to the facilitation of trans-national coopera tion between clusters, 
which is often seen as necessary to learn from  each other and to form partnerships between 
different cluster organisations in  support of their clients.  
4.1. Concept and role of cluster organisations 
Cluster initiatives are organis ed efforts to enhance the co mpetitiveness of a cluster 
within a region , involving private business, public bodies and/or academic institutions within 
a regional and sectoral system.115 They can, but must not necessarily be, based on a 
formulated cluster policy and they usually follow a bottom-up approach and are managed 
increasingly by specialised institutions, such as cluster organisations. The Global Cluster 
Initiative Survey 2005 identified more than 1 400 cluster init iatives around the world .116 
40% of the respondents reported that their cluste r initiative was initiate d in 2001 or later and 
72% in 1999 or later, which reflects the increase d importance of cluster in itiatives as a tool for 
economic development in recent years.  
This survey also gives an overview of the main characteristics of cluster initiatives. It shows 
that the majority of cluster initiatives have a narrow geographical focus,  as 50% of cluster 
initiatives have most of their members within one hour’s travel distance . They typically have 
a broad membership and rarely exclude foreig n owned companies, small companies or those 
as regarded as competitors. Cluster initiatives are more common in some specific sectors such 
as IT, medical devices, production t echnology, communication equipments, bio-
pharmaceuticals and automotive. Most often, cluster initiatives are set-up as “public-
private-partnerships” by industry and government, while if so lely set up by one party, this is 
more often initiated by governments then by  industry. Only a small number of cluster 
initiatives were initiated by a university. This strong government involvement is also reflected 
in the source of financing of cluster initiatives as they are usually financed by governments 
(54%) and from industry (18%) or  equally from both (25%). 
It is a common characteristic of most cluster initiatives that public financial support tends to 
decrease over time . While there appears to be a need for public s upport for the set-up of 
cluster organisations and networks at an early stage in order to allow for a phase of trust 
building, public support appears to be replace d over the lifetime of cluster initiatives by 
increased membership fees, sponsoring and other fees for conference part icipation, training 
                                                 
115 See Sölvell, Lindqvist & Ketels (2003). Thei r Cluster Initiative Greenbook is available at 
http://www.cluster-research.org/green book.htm . Alternatively, Andersso n et al. (2004) define cluster 
initiatives as “conscious actions taken by vari ous actors to create or strengthen clusters”. 
116 See Ketels, Lindqvist & Sölvell (2006). Information and reports on the results of the Global Cluster 
Initiative Survey (GCIS) are available a t: http://www.cluster-research.org/gcis.htm 
EN 43   EN and coaching which altogether cover most of th e costs of successful cl uster initiatives. For 
instance, the long experience of 11 cluster initiatives es tablished since 1998 under the 
umbrella of Clusterland Upper Austria117 clearly confirms this trend towards self-financing as 
cluster initiatives mature.118 The new State Aid rules119 will further support this development, 
as they explicitly allow investment aid and operating aid for cluster animation only for a limited duration of up to 5 years and, for instance , in a degressive form. However, the explicit 
sections 5.8 of the State Aid rules on aid for i nnovation clusters is not exclusive and clusters 
may benefit from other types of allowed State Aid. 
The organisations that manage cluster initiativ es may take a variety of forms, including non-
profit associations, univ ersities and public agencies. While they mostly emerge from industry-
led projects or from government-led progr ammes, it is neverthe less often a single 
“clusterpreneur”  who takes the leadership to initi ate the establishment of a cluster 
organisation which later on is most often ta ken over by a professional cluster manager.
120 
Cluster organisations are considered as new and highly efficient forms of innovation support 
providers that provide or ch annel specialised and customis ed business support services, 
especially to SMEs. Cluster organisations  can be defined as the legal entity engineering, 
steering and managing the clusters, including usually the participation and access to the 
cluster’s premises, facilities and activities.121 A survey led by the European Association of 
Regional Development Agenci es (EURADA) identified more than 500 cluster 
organisations in Europe .  
Most of the cluster organisations operate in the EU-15  which are endowed with better 
infrastructure facilities, better resources, and with a higher number of participating companies as in the new Member States. Particularl y, many cluster organisations can be found in 
countries like France, Italy, the UK or Germany, who were the frontrunners  in cluster policies 
creating the first “industrial dist ricts”, “systemes productifs loca ux” or competence networks.  
In the most advanced economies cluster or ganisations tend to focus more on innovation 
services and knowledge creation, wh ile in countries still in tran sition more emphasis is laid on 
supply chain development, export promo tion or simple networking and training. In the new 
Member States the cluster  concept is relatively new , nevertheless there are significant 
resources allocated to support cl uster development from the Stru ctural Funds in the financial 
period of 2007-2013. In these countries there are therefore a growing number of cluster 
                                                
 
117 Information about Clusterland Upper Austria are available at 
http://www.clusterland.at/index_ENG_HTML.php 
118 Presentation given by Werner Pamminger from Clusterland Upper Austria during the roundtables on the 
Clusters Linked Over Europe (CLOE) network during the European Presidency Conference on 
Innovation and Clusters held in Stockholm on 22-23 January 2008. For conference documentation see http://www.VINNOV A.se/innovationandclusters. 
119 The text of the Community Framework for State Aid for Research and Development and Innovation 
was published in the Official Journal of the European Union (2006/C 323/01) of 30.12.2006 and is 
available at http://eur-lex.europa.eu/LexUriServ/site/en/oj/ 
2006/c_323/c_32320061230en00010026.pdf. 
120 See Andersson et al. (2004). 
121 This definition follows the description concerning aid for innovation clusters that features in the 
“Community Framework for State Aid for Research and Development and Innovation”. See section 5.8 
on ‘Aid for innovation clusters’ of the text of the Community Framework that was published in the 
Official Journal of the European Union in December 2006 (2006/C 323/01) and that is available at 
http://eur-lex.europa.eu/LexUriServ/site/e n/oj/ 2006/c_323/c_32320061230en00010026.pdf 
EN 44   EN organisations which are in an initial stage , providing still limited type of support for 
enterprises and are in need for developing and raising the quality of their cluster management.  
Almost all cluster organisations have  access to some organisational resources , including a 
dedicated cluster manager or facilitator – i.e.  the individual person th at manages the cluster 
initiative –, an office and a website . Cluster organisation often have a wide set of activities , 
ranging from information provision, commerc ial cooperation and innovation support, 
enhancing the business environment, human re sources upgrading, business development, to 
cluster expansion. Correspondingly, the activitie s of cluster organisations include many 
different types (see Figure 12) that are explained in more detail below. Amongst these 
different activities, a study of 34 European  cluster organisations identified government 
relations, training, R&D, joint marketing and regional branding as the most common 
activities.122  
Figure 12: Activities perfor med by cluster initiatives 
 
Source : Ketels; Lindquist & Sölvell (2006) Cluster Initiatives in Developi ng and Transition Economies , 1st ed., 
May 2006, Center for Strategy and Competitiveness, Stockholm.123 
Note : Respondent countries were categorised in Developi ng (Dev.), Transition (Trans.) and Advanced (Adv.) 
and the reply scale ranged from 1 for ‘disagr ee completely’ to 7 for ‘agree completely’. 
A main task of cluster organisations is the gathering of market and technical intelligence  
and cluster analysis as well as its further dissemination by publishing reports and newsletters. 
Cluster organisations may also undertake specific cluster animation activities  that aim to 
foster cooperation and knowledge sharing by s upporting partner searches and identification 
and contact building. This concerns the networ king and linking of competencies within and 
across different sectors of the sp ecific cluster as well as fost ering trans-national relations to 
other clusters. They support the sharing of in formation between its members and with other 
                                                 
122 See Isaksen & Hauge (2002). 
123 The data are based on a survey of 1400 cluster initiatives, including comprehensive data from 450 
cluster initiatives that completed the Global Cluster Initiative Survey (CGIS) 2005. The report is 
available at http://www.cluster -research.org/devtrareg.htm 
EN 45   EN partners through organising seminars, workshop s and conference with appropriate speakers 
and creating websites. Part of this, is also to create a dynamic dialogue among industry, the 
scientific community and government authorities.  
Besides that, cluster orga nisation often organise training programmes in order to support the 
upgrading of human resources. This includes id entifying key qualifications and professional 
competences that are necessary for cluster growth, organising wo rkforce training and 
management education. Furthe rmore, it can liaise with ot her specialised training and 
education providers in lobbying for an  adaption of their curricula. Often specialised advisory, 
consultancy and support services  are offered by cluster orga nisation that may concern 
assistance in financing and proj ect acquisition, issues of intelle ctual property ri ghts (IPR) and 
other support for the internati onalisation of cluster firms. 
Other activities of cluster organising may include the facilitation of commercial cooperation  
among its members that concern joint purchasin g, logistics, producti on, export promotion and 
sales. The latter may include developing a co mmon branding of the region and products as 
part of the marketing of the cluster to attract ta lent and to recruit new companies to take part 
in the cluster. Finally and in consequence of  joint activities between its members, cluster 
organisations often are in charge of the manage ment of the cluster’s ope n-access facilities that 
can include laboratories, testing centres, training centres and othe r infrastructure facilities.  
The type of support activities and structures o ffered by cluster organisa tion may also play an 
important role in facilitating the further growth of a cluster  as they seem to vary depending 
upon the development stage of the cluster. Ac cording to a report by NetBioCluE (2008) – 
which is a cluster network proj ect for the biotechnology sector124 under the Europe INNOVA 
initiative –, mature clusters tend to ha ve more than four times the number of 
incubators/science parks than clusters in the in itial stage of developm ent. This report also 
suggests that there is a large n eed for facilities and networki ng during the grow th and mature 
stage of biotechnology cluste rs, while innovation support app ears to the most important 
activities during the initial stage of a cluster. 
Overall, it appears that most cluster initia tives organised by cluste r organisations have a 
positive impact on the cluster they serve. The Cl uster Initiative Greenbook presents the results 
of the 2003 Global Cluster Initia tive Survey of over 250 cluste r initiatives from around the 
world.125 According to this survey, 85% of the respondents agreed that a cluster initiative 
has improved the competitiveness of their cluster , and 89% agreed that it helped the cluster 
to grow. A total of 81% of res pondents stated that  the cluster initiatives have met their goals, 
while only 4% have been disappointed.  
There are a number of key criteria that determine the succ ess of a cluster initiatives and 
cluster organisations . The Cluster Initiative Greenbook grou ps them around their setting, the 
objectives and their process. Important aspect s for the setting of cluster initiatives and 
organisation are a strong business environmen t, trust in government, strong regional 
government, cluster strength, and being part of a broader strategy. The obj ectives should have 
a broad range and be selected on the basis of the cluster’s specific needs. Furthermore, a 
successful process requires a cluster manage r with cluster insight, an organisation and 
                                                 
124 More information on the NetBioCluE project is available at http://www.europe-innova.org/ 
index.jsp?type=page&lg=en&classificationId=50 19&classificationName=NetBioClue&cid=5105 
125 See Sölvell, Lindqvist & Ketels (2003).  
EN 46   EN communication structure of high quality, an o ffice presence, a signif icant budget, a clear 
strategy and measurable goals.  
Following this study, those cluster initiative s selected through a competition process for 
receiving government financing perform si gnificantly better in terms of increasing 
international competitiveness than “top down” initiatives. There was a less visible effect on performance when governments picked the compan ies to be involved in  clusters or when 
cluster initiatives involved memb ers beyond 1 hour’s travel distan ce. Cluster initiatives only 
limited to domestic companies performed worse wh ich is a clear indication that openness pays 
off. The study clearly confirmed that a cluster manager having a broad  network of contacts is 
one of the most important success factors . Based on this and further evidence, it can be 
reasonably concluded that cluste r managers play a very importa nt role for the success of a 
cluster.  
Cluster manager need to combine multiple competencies , such as being visionary, 
facilitative, analytical and excelling in networking. A cluster manager typically needs to 
encourage synergies and build consensus, main tain the balance of achieving short vs. long-
term benefits and focus on concrete action plan s for specific cluster initiatives. Another role 
filled by the cluster manager is that of “cluster engineer”.
126 This individual takes on the role 
of broker – coupling firms with firms, firms with universities, government agencies with 
cluster initiative members on a continuous basi s. A successful cluster manager must know 
how to appreciate options to expand network contacts both within the cluster initiative and 
externally. It is worth stressing that cluste r growth and transformation is dependent on 
constantly looking outside the cluster in itiative for new risks and opportunities.  
For these reasons, a tendency can be observed towards the further professionalisation of 
cluster organisations and cluster managers , as they are becoming specialised in some of 
the most important activities and more and mo re emphasis is laid on providing a service to 
enterprises of high quality. This is reflected in the growing demand on behalf of cluster 
managers, facilitators and regi onal or national stakeholders s upporting cluster initiatives to 
learn about factors underlying the success of cl uster organisations and professional cluster 
management. A number of initiatives exist alread y that organise cluster training programmes, 
for example, so called cluster acad emies by Clusterland Upper Austria127, the Barcelona 
Clusters Summer School128 or PROCluster® facilitator wo rkshops organised in Finland129. 
There is a further tendency in recognising cluster excellence in aspects of cluster formation 
and development through the formulation and rec ognition of best practice as in the case of 
“Spitzencluster” in Germany.130  
Cluster initiatives not following this trend towards further specialisation and 
professionalisation may risk not to seize the fu ll potential of clusters and falling behind in 
international competition. However, the awareness for the need to build-up strong cluster 
                                                 
126 See Andersson et al. (2004). 
127 More information about the Cluster Academy Upper Austria is available at: http://www.proinno-
europe.eu/index.cfm?fuseaction=nwev.NewsRead er&news=2131&lang=EN&t opicID=90&parentID=0 
128 More information about th e Barcelona Cluster Summer School is available at : 
http://www.barcelonagse.eu/Barcelon a_Clusters_Summer_School.html 
129 More information on these workshops can be found at 
http://www.prodemic.f i/english/index.php?group=00000019&mag_nr=8 
130 More information on the Spitzencluster competition is available at 
http://www.spitzencluster.de/de/468.php 
EN 47   EN initiatives and organisations is not evenly spread in Europe . First, the initiatives and 
organisations themselves may not be aware of better practice applied elsewhere due to a lack 
of trans-national relations and exchange with  other cluster initiati ves and organisations. 
Secondly, the quality of cluster ma nagement is difficult to asses, especially for firms that are 
or may wish to become members of cluster in itiatives and organisation. There may only be 
one or few cluster organisations  in a given regions that can be compared. Hence, firms are 
likely to find it hard to evalua te whether the support services are of good quality and whether 
they justifies the costs of membership and the time necessary  to engage in and make use of 
activities and services offered. There seems to be clear need for more tran sparency in terms of 
quality standards of cluste r initiatives and cluster or ganisations in Europe.  
Cluster organisations are in many cases also a front door for clusters to join international 
networks , to ensure international recognition and to  strengthen the clus ter’s market position 
worldwide. Cluster managers are responsible for facilitati ng transnational cooperation 
between the innovation actors of different clus ters resulting from the fact that linkages 
between companies, respectively between resear ch institutions and enterprises coming from 
different countries are risi ng in importance. Altoge ther, there are therefore many good 
reasons to further support the excellence of cluster initiatives and organisations,  in 
particular in the new Member States. 
4.2. The role of trans-national cooperation between cluster initiatives and cluster 
organisations for strengthening clusters 
During the last few years, many cluster initiativ es have become more active in establishing 
international links and strategic allia nces with other cluster initiatives  in order to better 
serve the needs of their clients. As businesse s internationalise their activities so must the 
organisations and institutions supporting th em. Traditionally, the focus of many cluster 
initiatives has been on internal activities re lated to improving the cluster-specific business 
environment, strengthening th e linkages between cluster par ticipants, and upgrading company 
operations and strategies. More and more, th e creation of international linkages between 
clusters and the cooperation between cluster initiatives is added to the list of tasks to be performed. 
Indeed, there is a strong case for trans-national cooperation  between actors from different 
clusters and areas. Enabling cooperation both w ithin clusters and internationally between 
clusters can help increasing the internationa lisation of cluster firm s and their access to 
technological excellence which is not availa ble within the often narrow boundaries of a 
cluster. As cluster organisations serve the needs of their cluster firms, they must offer also 
services facilitating international contacts and partnerships, which can often be set in motion 
through cooperation with other cluster organisati ons. Furthermore, firms need to remain open 
to new ideas and cluster organisation play an im portant role so that cluster firms have access 
to global networks. In this respect, transn ational cooperation can be regarded as an 
appropriate approach to combat the risk of cluster sclerosis fr om so-called “lock-in” effects.
131  
The request for better support for trans-national  cooperation ranks high on the list of 
cluster firms  for improved activities. As the results  of the 2006 Innobaro meter (see Figure 9 
above) have shown there is huge gap between th e current provision of support activities and 
                                                 
131 See Grabher (1993). 
EN 48   EN the desired level of support for trans-national coop eration. Furthermore, the results of a survey 
among 91 cluster initiatives acro ss Europe about their interna tionalisation activities conducted 
by the German Competence Netw orks (Kompetenznetze, 2007)132 also showed that only 10% 
of cluster initiatives or networks actually ha ve concrete plans for in ternationalisation (see 
Figure 13 below), which suggest s that the current support o ffered in this respect is 
insufficient.  
In order to respond to this chal lenge of better trans-national c ooperation, some Member States 
such as Germany and France already actively pr omote the internationalisation of clusters. 
However, this approach is far from being gene rally followed in Europe. At operational level, 
trans-national cooperation m ay take many different forms. The most common approach is 
to establish contacts to other networks and clus ters. This may comprise the facilitation of the 
exchange of knowledge and experiences that can ta ke place in the framework of cluster visits 
and staff exchanges. A step fu rther, partnerships on the join t provision of business support 
services and on access to cluster fa cilities such as res earch and testing centres, and the joint 
organisation of matchmaking between companie s or educational programs open to members 
of the clusters may be organise d. These concrete forms of cl uster partnerships are however 
not yet well advanced in Europe. 
                                                 
132 The study by Kompetenznetze Deutschland (2007) builds upon a survey of 91 networks form 10 
European countries, predominantly from France, Germany and Spain. The study is available at 
http://www.kompetenznetze.de/service/bestellservice/ medien/kurzstudie_internationalisierung.pdf/view 
EN 49   EN Figure 13: Internationalisation strategies of networks 
 
Source : Kompetenznetze (2007).133  
The increasing importance of cluster linkages is consistent with changes in the global 
economic environment  in which clusters operate. Barriers to trade and investment have been 
removed and technological change has decr eased the costs of transportation and 
communication. These two trends have create d more opportunities for breaking up value 
chains across locations and increased the competi tive pressure to do so if it is an effective way 
to reduce costs. While in the past the goal of internationalisation efforts was mainly to contribute to higher export revenue s, it is now also important to create and sustain competitive 
advantages through internati onal cooperation. As a result, clusters become more focused 
and specialised  on their core competences leading to an increasing integration of clusters into 
global value chains. 
The particular set of co nditions in Europe is creating addi tional pressure to develop linkages 
between clusters. National borders continue to separate markets  and limit the effectiveness 
of competition across regions. Some of these barri ers are related to the historical legacy of 
policy barriers that stil l affects behaviour even though the pol icies have been changes. Others 
are the result of different regulatory regimes th at still exist and make it harder for companies 
                                                
 
133 Figures are given in per cent and based on 85 network’s answers, for which a maximum of two answers 
was allowed.  
EN 50   EN to compete with identical strategies in differe nt European countries. Finally, there are also 
different languages and cultures across countries th at are not the result of policy but lead to a 
natural separation of markets. As  a result of these conditions, cluster specialisation across 
European regions is less pronounced than in the United States , a market with a common 
language and regulatory regime that has b een in place for more than 200 years.  
The continuous efforts at EU level to enhance the functioning of the internal market and in 
particular to remove obstacles to free move ment of goods, services, capital, people and ideas 
are instrumental to ensure that the potential fo r excellent European clusters is not hampered 
by the existence of national borde rs. Notwithstanding these effort s, it needs to be recognised 
that European clusters cannot rely on the natural fo rces of agglomerati on alone to attract 
capabilities and assets to the same extent as US clusters can. However, European clusters 
can compensate some of these comparativ e disadvantages through creating stronger 
linkages to other clusters with complementary strengths . While this may be considered as 
a second-best response that does not reach the sa me level of cluster dynamics that are possible 
when clusters evolve in a market without barrie rs, it still provides real efficiency gains.  
The Kompetenznetze study has identified four main reasons for the internationalisation of 
clusters : the strive for or strengthening of a worldwide leading position, easier access to 
targeted markets, access to know-how or techno logies not available within the own cluster 
and the exchange of information and e xperience at an international level.134 These are strong 
motivations for opening clusters to international activities. 
Linkages between clusters will most often tend to occur naturally, if the efficiency gains they 
provide can be priv ately appropriated. Multinational companies play an important role in 
this internationalisation process . Through subsidiaries in diffe rent clusters they create 
linkages that are external to any cluster but in ternal to the firm. They  combine the respective 
assets and capabilities of regional clusters in their value chain of activities, and can internalise the value this creates in their products and services. Thus, multinational companies become 
the orchestrators of networks of clusters.  
While these private activities will generate so me international linkages between clusters, the 
level of these linkages is likely to be suboptimal. The reason for this is that only a fraction of 
the benefits from cluster linkages can be inte rnalised by the companies that create them 
because of positive externalities th at exist in clusters. In addi tion, there are many barriers that 
inhibit the mobility of companie s’ activities and the natural emergence of cluster linkages 
between them. These barriers can comprise four  main categories that include behavioral 
barriers (such as strategies a nd operational practices), polic y-induced barriers (such as 
different regulatory regimes), natural barriers (such as language and cultural difference), and 
informational barriers (of various kinds that lim it available information about foreign clusters 
and the assets and capabilities they possess).  
A lack of trust between partners and conflicting interests due to partners being competitors 
were identified as the main barriers to trans-national cooperation  for cluster initiatives, 
followed by a lack of financing and a lack of ti me (see Figure 14). It is  interesting to notice 
that language barriers and geographic distance app ear to be rather minor factors that hinder a 
possible international cooperation.  
                                                
 
134 These four answers received each between around 14 and 18% while ot her answers got less than 10% . 
two answers per 89 networks were possible.  
EN 51   EN Figure 14: Main barriers hindering a po ssible co-operation between networks 
 
Source : Kompetenznetze (2007).135 
Although clusters, cluster firms and cluster orga nisations compete agai nst each other – in 
particular those which belong to  the same sector of activities –, there are many reasons 
justifying competition and cooperation at the same  time. The analysis conducted so far shows 
that the advantages of cooperation between clusters  are numerous and that cooperation 
between clusters facilitates informatio n exchange between them and supports 
internationalisation strategies . This is particularly useful for SMEs that do not have the 
necessary human and financial re sources to conduct expensive market analyses and surveys. 
Cluster cooperation facilitates mutual learni ng and the exchange of good practice as well as 
helping joint business opportunities to be explored and the development of common 
strategies.  
                                                 
135 Figures are given in per cent and based on 84 network’s answers from their managers’ point of view, 
for which multiple answers were allowed.  
EN 52   EN 4.3. Community support for transnational cluster cooperation between cluster 
initiatives and cluster organisations: First results and future challenges 
Several complementary Community measures ex ist to strengthen clus ter initiatives more 
efficiently and to connect cl usters better through trans-na tional cluster cooperation and 
exchange. Whereas the main responsibility for cluster policy design remains with regional and 
national policies, the European Commission contributes to strengt hening trans-national 
cooperation between cluster ini tiatives and cluster organisations in a number of ways.  
In order to foster cooperation between clusters in different Member States more efficiently, 
national and regional support measures need to  better take into account the trans-national 
dimension of clusters. Practical  cooperation between clusters is however by no means an easy 
task as still many barriers exist that hamper joint initi atives and bundling efforts, in particular 
across borders. The regional c ooperation for cluster develo pment can be supported through 
the “European Territorial Cooperation”136 Objective of the new Cohesion Policy, aiming 
at an integrated territorial development, in terregional co-operation and exchange of good 
practice. Its antecedent, the INTERREG III co mmunity initiative included a number of 
projects focusing specifically on innovation and fostering new ideas through business clusters. 
For instance, a project called REGINS used cluster management to encourage business 
activity between companies in the regions of th e four participating partners. As a Regional 
Framework Operation, which f unded diverse initiatives, REGI NS involved cooperation that 
led to the establishm ent of 28 subprojects. Most of the REGINS subprojects promoted 
research and development or ne w technologies, and all of th em encouraged interregional 
cooperation through business clusters.137  
The “European Grouping of Territorial Cooperation”138 legal instrument, primarily 
though not exclusively, developed for managing Structural Funds programmes, may also be 
used to foster cooperation between public author ities or other bodies governed by public law 
in trans-national support of clusters. This can  be used, for instance, for developing and 
implementing common support services and sharing access to research and te sting facilities of 
cluster initiatives. As a first European Grouping of Territorial Cooperation, the Eurometropole 
Lille-Kortrijk-Tournai has been created with in the cooperation of the local and regional 
authorities, who have already launched severa l joint initiatives. In this respect further 
cooperation agreements have been signed for Euroregion Alpes-Mediterranée, Galicia Norte 
Portugal, Euroregion Alpe-Adria and Euroregi on Pyrne Mediterrane. Furthermore France and 
Spain have committed to create an EGTC for the Cerdanya joint cross-border hospital.139 
Cooperation among clusters is also being de veloped under the EU’s Integrated Maritime 
Policy140, where the Commission announced its in tention to foster  networking amongst 
                                                 
136 The “European Territorial Cooperation” replaces and reinforces the form er Community Initiative 
INTERREG. 
137 More information on REGIONS is available at http://www.regins.org/en/index.php 
138 See Regulation (EC) No 1082/2006 of the European Parliament and of the Council of 5 July 2006, as 
published in the Official Journal of the European Union L210, p.19 on 31.07.2006, available at 
http://ec.europa.eu/regional_policy/sources/doco ffic/official/regulation/newregl0713_en.htm 
139 For more information on these cases, see 
http://www.cor.europa.eu/pages/E ventTemplate.aspx?view=folde r&id=acdb7fab-512b-418b-af15-
2abb12659e77&sm=acdb7fab-5 12b-418b-af15-2abb12659e77 
140 Communication from the European Commission (“the Blue Paper”), COM(2007) 575 from 10.10.2007, 
available at http://ec.europa.eu/maritimeaffairs/dev_imp_en.html. 
EN 53   EN maritime clusters . Building on this, the Commission St aff Working Document on Maritime 
Clusters141, announced a study to map and analyse the nature and potential of maritime 
clusters in Europe. This study, due to deliver results by the end of 2008, will provide a clearer 
picture of the strength and challe nges for maritime clusters in view of the elaboration of any 
further policy initiatives.142 
Support is also provided under the European  Agricultural Fund for Rural Development 
(EAFRD) for the promotion of the cooperation between primary producers in agriculture and 
forestry, the processing industry and/or third parties in the fra mework of cooperation actions 
fro the development of new products, processes and technologies in th e agriculture, food and 
forestry sectors. The EAFRD also provides s upport for business netw orking in rural areas.143 
The “Regions of Knowledge”144 initiative, which is now part of the 7th Framework 
Programme on Research and Development, fac ilitates networking betw een regional research-
driven clusters composed of regi onal authorities, enterprises and research entities at European 
level. The initiative has the objective to streng then the research potential and competitiveness 
of EU regions through the definition of resear ch-based strategies for economic development, 
in particular by encouraging and supporting the development and trans-national networking of 
regional research-driven clusters . The initiative aims at increasing the level of research 
investment in Europe as part of the objective of devoting 3% of GDP to research through the 
definition of joint action plans. During the 6th Framework Programme, a forbearer of the 
“Regions of Knowledge” initiative launched 32  pilot projects aiming at strengthening the 
regional research potential through prelimin ary exercises such as foresight analyses, 
technological audits, benchmarki ng and mapping studies and then  exchange of best practice 
and formulation of policy recommendations. Fo r instance, the European Regions Research 
and Innovation Network (ERRIN)145 was supported, which contributed to the creation of a 
platform of more than 200 Brussels-based region al actors in order to facilitate their common 
work in the field of research and innova tion. Another example is the Food Innovations 
Network Europe (FINE), which seems to have huge potential.146 Its action programme unites 
                                                 
141 SEC(2007) 1406 from 17.10.2007, available on application at 
http://ec.europa.eu/transparency /regdoc/recherche.cfm?CL=en 
142 Europe’s maritime sector is a worl d player as figures from the “Optimar” study by Lloys’s Fairplay, the 
2006 Ecotec study commissioned by the Commission’s Directorate-General for Maritime Affairs and 
Fisheries, the 2006-2007 ESPO report and from the EMF (European Metalworkers’ Foundation) show. According to these sources, the Euro pean maritime clusters produce in total an estimated vale added of 
€ 111 billion and providing about 5 million jobs acro ss Europe related to se a or using sea resources, 
including coastal tourism. Some clusters focus on single geographic regions – often around a major port – while others are multi-centred, bringing together e xpertise and experience from several coastal sites, 
often across national boundaries, of which many have developed other specialisations. In the 
shipbuilding sector alone, 1.3 million employees generate together a value added totalling € 70 billion Euro. The importance of maritime clusters will be  further illustrated in the upcoming Communication 
on a future European maritime strategy and in the Communication on Strategic options for European 
shipping and for the maritime transport system for 2008-2018.  
143 See Council Regulation (EC) No 1698/2005 of 20 September 2005 on support for rural development by 
the European Agricultural Fund for Rural Development (EAFRD), OJ L 277, 21.10.2005, pp. 1–40, at: 
http://eur-lex.europa.eu/LexUriServ/LexUriSe rv.do?uri=OJ:L:2005:277:0001:0040:EN:PDF 
144 More information about the Regions of Knowledge initiative is available at 
http://cordis.europa.eu/fp7/capacities/regions-knowledge_en.html 
145 More information about ERRIN is available at http://www.errin.eu 
146 The example is listed in the accompanying Commission Staff Working Document entitled “RTD, 
Innovation, Cohesion and Rural Development Policies reinforced Synergies” to the Communication 
EN 54   EN eight different regions with agrifood clusters in  their efforts to join forces to increase 
innovation by enhancing exchange and collabora tion between the stakeholders of the food 
industry.  
In particular, the Europe INNOVA initiative147 has strongly supported trans-national 
cooperation between clusters at operational level and provided a true learning experience for 
cluster-related organisations. The so-ca lled Aho Report on “Cr eating an Innovative 
Europe”148 which advocates measures for the creation of lead markets explicitly mentions the 
Europe INNOVA cluster projects when stressing that  “[it] is important to ensure that clusters 
are defined in terms of the new market and knowledge relationships needed for emerging 
sectors to thrive” and th at “[t]his can be facilitated by openi ng the clusters to  cooperation with 
and learning from other clusters in the same or other sectors”. 
Since 2006, Europe INNOVA has provided eleven industrial cluster netw orks in traditional 
and high-tech sectors with a learning platform th at enabled them to iden tify, analyse and share 
good practices in cluster management and to  address the challenges emerging from 
globalisation. The cluster networks cover seven industries (automotive, biotechnology, 
energy, space, food/drink, ICT/Op tics and technical textiles) with a particular focus on 
strengthening their regional innovation systems and on suppor ting trans-national cooperation 
with a view to further accelerat e the development of their clus ters in a Europe context.  
The aim of this action is helping organisati ons that manage clusters such as cluster 
organisation to cooperate with other cluster-related organisations across Europe  to 
exchange experience, explore opportunities for strategic coope ration between them and to 
develop joint strategic partnerships to join forc es. This is increasingly important in order to 
complement expertises, and develop joint acti ons and business support strategies such as 
sharing research and testing facilities. This ca n have a direct impact on the efficiency of 
project partners as well as an indirect impact  from projects resulting from “spill-over effects” 
into other areas.  
After two years of work, the coordinators  of the cluster networks have reported very positive 
results of the cluster collaboration . As a first step, the es tablishment of good working 
relationships and mutual unders tanding amongst the partners has been instrumental for the 
success of the knowledge-sharing pr ocess set in motion by the clus ter networks. Once this had 
been achieved, the networks have openly shared  their experiences and practices on cluster 
management. The collaborative learning effect wa s reinforced by the sect oral focus applied to 
Europe INNOVA helping the networks to find common issues and thereby facilitating the 
comparison of sector-specific approaches.  
The cluster-related organisa tions indicated that the key motivations of collaborating across 
borders  have been to increase international visi bility by building the “critical mass” of a 
cluster; to gain economies of scale; to access and open new markets; to seek complementary 
                                                                                                                                                         
from the European Commission on “Competitive European Regions through Research and Innovation - 
A contribution to more growth and more and better jobs”, Communication COM (2007) 474 final. 
147 More information about the Euro pe INNOVA initiative is availabl e at http://www.europe-innova.org 
and about its Cluster Networks at http://www.europe-innova.org/index.jsp?type=page&lg= en&classificationId=4961&classificationName=Cluster%20Networks&cid=5104 
148 See European Commission (2006f). The Aho report  is available at http://ec.europa.eu/invest-in-
research/action/2006_ahogroup_en.htm 
EN 55   EN competencies and assets from abroad; and to benchmark cluster management experiences and 
practices. In this process, study visits and match-making events by cluster companies have 
been playing an important role. The key outcomes of benchmarking and collaboration 
between clusters are to be f ound in increased knowledge and in formation in order to improve 
competences of cluster management.  
The cluster network for technical text iles INNOTEX for example, organised learning and 
cooperation  in the form of a cross-cluster best pract ice platform. This enhanced collaboration 
has contributed to joint development and increased competitiveness within each of the participating textiles clusters. The project wa s, for instance, approached by a UK region for 
advice on its regional strategy to migrate its textile  cluster from clothing textiles to technical 
textile. The ABC Network has developed severa l experimental tools for the agro-biotech 
sector, such as mentoring schemes and pilot ac tions in intellectual property right protection. 
The cluster managers of CENCE have used the project to adapt cluster management 
practices , to improve cluster services and to suppor t emerging clusters in the energy sector. 
In NetBioCluE, the cluster mana gers shared their long-term vi sions and agreed on the policy 
actions that should be undertaken. The TCAS  cluster managers discussed their strategies and 
issues of mutual interest such as cluster ev aluation, technology transfer and the marketing of 
the cluster organisations and th eir services to SMEs. At the same time, their meetings 
represented an excellent opport unity for relatively new cluster managers to benchmark, and 
adapt their procedures an d design joint projects. 
A number of cluster networks also supported the emergence of new cluster organisations . 
In Northern Hungary, the CENCE consortium played  a vital role in the development of a new 
Bioenergy Innovation Cluster. The new Hungar ian cluster received practical advice and 
support in structuring and mana ging the new cluster organisati on. It was involved from the 
beginning in internationa l cooperation. Thanks to these e fforts, the cluster has received 
funding from the Hungarian government for the amount of 5.3 M€. 
The automotive cluster networks have also help ed to establish new cluster organisations. The 
BeLCAR consortium works with a motorcycle cl uster in Catalunya (Spain), the new cluster 
initiative “Automotive South-West” in Stuttgar t as well as a growing automotive cluster in 
Romania. In the Polish region Wielkopolska, th e development of an automotive cluster has 
greatly benefitted from the advice provided by the TCAS team. The team helped to draw up an action plan involving intern ational support for clus ter formation and triggered a decisive 
positive commitment from the local players. In this case, the international involvement and 
experience helped to tip the balance and convi nced key players in Wielkopolska to promote 
regional clustering. The Estonian  partner of the INNOTEX ne twork of textile clusters, 
approached well-established clus ters in Leicestershire (UK) and Aragon (Spain) for advice on 
modernising its cluster strategy with regard to technical text iles. The new strategy emphasises 
technology transfer to bring th e evolving polymer composite cl uster in Estonia up to speed 
with the latest developments and knowledge in  protective clothing, electronic textiles and 
composites.  
Most of the Europe INNOVA clus ter networks have focused on mapping and 
benchmarking competences and clusters in Europe . The ENOC cluster network for 
example has used the competence networks of its members to identify key technology 
organisations specialised in optics and photon ics worldwide. The network analysed the 
activities of 79 clusters and concluded from the analysis that  their maturity was in most cases 
EN 56   EN depending on the successful management of a cluster organisation by a dedicated cluster 
manager. 
In the mClusters network, 22 leading mobile re gions have used the methodologies, tools and 
experience from both the involved cluster organisa tions and from the network of living labs in 
Living Labs Europe. They also designed special  processes with potential advanced buyers to 
create showcase projects on a perpetual basis. AFIBIO has benchmarked 14 clusters in the 
agro-biotech sector and created guidelines for development of the agrofood sector at regional 
level. 
The CASTLE cluster network lead the first cluster analysis on Satellite Navigation 
applications in Europe and as  a result, was able to identi fy a huge market potential and 
avenues for developing European lead markets in the field. The networ k has made substantial 
efforts to bring technologies such as GALILEO and EGNOS clos er to European regions and 
small companies by developing a roadmap for SatNav applications cluster. 
Within the biotech sector, the NetBioCluE cluster network mapped 16 European biotech 
clusters and their various busin ess models and service concepts . Successful models have been 
identified and their implementation evaluated by the clusters to be able to provide services based on these models to the companies. 
BeLCAR involved new automotive clusters through an open call and developed the 
“Benchmarking Club” which meets twice a year in a benchmarking forum. During these fora, 
the six-monthly data of each cluster are analysed and evaluated, based on which, one 
participant receives an award. The data for the benchmarking are gathered by the cluster 
management analysing different business areas  but also cross-sect oral cooperation. This 
process supports the cluster companies in th eir development and helps to create a stronger 
analytical basis for cooperation. The Be LCAR partner PANAC from Györ (Hungary) 
operates a ‘Benchmarking Club for Suppliers’ and is transfering the concept to other automotive regions. 
The many study visits, matchmaking events and workshops  organised by the networks 
involve a large number of compan ies, research institutions, policy makers and other relevant 
organisations. These tailor-made events have  allowed for face-to-face meetings with 
interested parties in other countries and have  initiated international cooperation at a very 
hands-on level.  
The following figures are just examples to give a flavour of the harvesting of spill-over 
effects  and the number of organisations mobilised during these events: NetBioCluE organised 
8 matchmaking events with 500 participants and 1000 face-to-face meetings; TCAS organised 
7 cluster visits with 1000 par ticipants of which 300 participants atte nded the matchmaking 
events; BeLCAR organised 6 matchmaking events  with 220 participants and 600 face-to-face 
meetings; CENCE organised 24 cooperatio n workshops and 10 study visits 15 joint 
innovation projects launched; OM NI-NET organised 15 cluster visits and local thematic 
seminars with 555 participants. This gives an  indication that many SMEs have benefited 
directly from these projects. 
The networks under Europe INNOVA prove that there is scope for more intense trans-
national cooperation with a strong sectoral focus. And indeed, for many of the cluster 
networks the cooperation under the Europe INNOVA initiative has only been the initial 
step for deeper partnering , from which more extensive international collaboration starts and 
EN 57   EN is further elaborated. Europe INNOVA projects also contributed to sectoral co-operation 
agreements and joint activities between project participants in  other Community programmes. 
For example, Memoranda of Understanding between  clusters in view of better co-ordination 
of their future activities were signed by participants of several projects. 
There are a variety of “exit strategies” for the Europe INNOVA cluster networks  ranging 
from formal collaboration structures, through which their joint work will continue after 
funding ends to informal partnerships, mentor ing and joint projects. The CENCE consortium 
joined efforts with five new clusters to launch a European Energy Cluster Platform. The 
CASTLE project joined forces with the fi nance projects INVESat and FinanceSpace to 
establish the ENCADRE network, joined by 15 sa tellite clusters from all over Europe, to 
foster the adoption of satellite downstream navigation applications that use the infrastructures of Galileo and the GMES. Furthermore, partners of the health bio-technology project NetBioCluE concluded co-operation agreements w ith cross-border regions, which will expand 
further.  
The TCAS and BeLCAR projects in the automotiv e sector constituted together with projects 
receiving Structural Funds
149 the “European Automotive Strategy Network” with over 40 
European automotive cluster regions that aims at bridging governmental and industry-driven 
activities in this sector in Europe. NICE is  aiming to consolidate the collaboration in a 
European ICT cluster network and mClusters plans to extend the network to countries and 
regions outside Europe. INNOTEX wants to levera ge the results of the project into business 
results and continues technology transfer while OMNINET conti nues with the organisation of 
match-making events and sharing informati on on specialised topics. The ABC Network, 
AFIBIO and NetBioCluE organise  their final event together a nd continue their cooperation 
through joint projects. The ABC Network is  also preparing a roadmap towards the 
establishment of a major food and agrobio cluster alliance. 
Finally, thousands of business contacts have been established and will bear fruit in joint 
ventures, joint research  projects, technology tran sfer and internationalisation of small and 
medium-sized enterprises. Based on this broad experience it can be conc luded that European 
support to trans-national cluster cooperation ha s been very effective and created many spill-
over effects that will continue to have a positive effect. They  have practically shown scope 
and means for closer cooperation between cluster in itiatives in Europe an d thus contributed to 
the emergence of a “European Research and Innovation Space” . However, as indicated in 
the previous chapter there is still a long way to go from better networking  to true partnerships 
between firms from different clusters. This is a ch allenge still to be addr essed in order to have 
an even greater impact on the excellence and performance of clusters in Europe. 
Another challenge that remains to be addressed more properly refers to the need to further 
enhance the  professionalisation and excellence of cluster organisations in Europe  and of 
the support they provide. A project oriented approach has nece ssarily a limited effect as only 
few cluster organisations can benefit from direct  contacts with other cluster organisations in 
order to learn from them. Furthermore, the in terest of coaching and training those cluster 
organisations that need such assistance most may not be sufficient, due to the lack of mutual 
benefits. Therefore more genera l solutions would have to be found and further promoted, such 
                                                 
149 The other constituting projects of the European Automotive Strategy Network are NEAC, I-CAR-O and 
the Network of Automotive Regions. 
EN 58   EN as the application of the EFQM Excellence Model150 of the European Foundation for Quality 
Management to cluster management. This woul d require support from neutral organisations, 
such as a European Association for Cluster Organisations which has not yet been created. 
However, there are strong signals that this could be achieved with some initial support from the Commission. 
Such an initiative could build upon the experience of the IMQ Net project under the PRO 
INNO Europe initiative, which represents th e Innovation Initiatives Quality Management 
Network.
151 There appears to be an increasing demand for special training for cluster 
managers as offered by some “Cluster Summer School s” or “Cluster Academies” at regional 
level. It would be in the European interest to make such training as widely as possible 
available in order to improve the excellence of  clusters and cluster management across the 
board. 
                                                 
150 For more information on the EFQM see http://www.efqm.org 
151 More information about the IMQ Net project is available at http://www.proinno-
europe.eu/index.cfm?fuseaction=page .display&topicID= 70&parentID=70 
EN 59   EN 5. TOWARDS BETTER COMPLEMENTARITIES BETWEEN REGIONAL , NATIONAL AND 
EUROPEAN EFFORTS IN SUPPORT OF CLUSTERS : THE MAIN CHALLENGES AHEAD  
To build a more competitive and innovative Eu rope, the different po licies and actions in 
support of clusters at regional, national and European level should pull into the same 
direction  and support each other. Although clusters are predominantly a regional or national 
phenomenon, the European level can contribute in  a number of ways to their success. Support 
activities at the European level are not about  picking the winners but about improving the 
framework conditions within the knowledge tr iangle of education, research and business 
innovation and leveraging the impact of national and regional efforts in  support of clusters 
through mutual policy learning and trans-national cooperation. What is needed as response to 
the challenges identified in this paper, are not more but better coordinated policies and 
initiatives in s upport of clusters . The common element should be  the promotion of cluster 
excellence at all levels.  
5.1. The needs and scope for better coordina tion between the different Community 
instruments in support of clusters 
The most important role of the European Commission is to complement regional and 
national cluster policies by further removing barrie rs to trade and mobility within Europe and 
thus improving the framework conditions for clusters to emerge and to operate more 
efficiently. A well functioning Internal Market  offers the best conditions for more trans-
national cooperation higher geogr aphical specialisation and the cr eation of stronge r clusters in 
Europe.  
Many framework conditions  that are important for cluste rs are strongly impacted by 
European policies. It is clearly the Commission’ s role to support the excellence of clusters by 
strengthening the knowledge base in Europe a nd enabling better exploitation of research for 
innovation, such as through the 7th Framework Programme for Research and Development152, 
the new Lead Market Initiative153 and Cohesion policy programmes154. Besides that, the 
Commission has a specific role to play to stim ulate mutual policy learning and trans-national 
cluster policy cooperation, such th rough the European Cluster Alli ance which was specifically 
welcomed by the Council.155 
The Structural Funds, the 7th Framewor k Programme and the Competitiveness and 
Innovation Framework Programme (CIP) are the three major Co mmunity instruments dealing 
with the issue of Europe to become a knowledg e based economy and each of them includes a 
                                                 
152 More information about the 7th Framework Programme is available at 
http://cordis.europa.eu/fp7/home_en.html 
153 The European Commission’s (2007a) Communication on “A lead market initiative for Europe”, COM 
(2007)860 of 21.12.2007 and further information on the Lead Market Initiative is available at http://ec.europa.eu/enterprise/leadmarket/leadmarket.htm 
154 The European Commission’s (2007d) Communication  “Competitive European Regions through 
research and innovation”, COM(2007) 474 final,  is available at http://eur-lex.europa.eu/ 
LexUriServ/LexUriServ.do?uri =COM:2007:0474:FIN:EN:PDF. 
155 See Council of the European Union (2006) Council Conclusions on a broad-based innovation strategy: 
Strategic priorities for in novation action at EU level , 2769th Competitiveness Council meeting, 
Brussels, 4 December 2006, available at 
http://www.consilium.europa.eu/ueDocs/cms _Data/docs/pressData/en/intm/92107.pdf 
EN 60   EN number of activities in support of clusters from different pe rspectives. As it is stated in the 
regulation on the European Regional Development Fund , under the Convergence objective, 
one of the priorities of ERDF is research  and technological development (R&TD), innovation 
and entrepreneurship, including the “improvement  of links between SMEs, tertiary education 
institutions, research institutions and res earch and technology centres; development of 
business networks; public-private  partnerships and clusters; support for the provision of 
business and technology services to groups of SMEs; and fostering of entrepreneurship and 
innovation funding for SMEs through financial engineering instruments”. Within the 
framework of the Convergence and Regional competitiveness and employment objectives, the European Social Fund  shall also support actions in Me mber States such as networking 
activities between higher education instituti ons, research and technological centres and 
enterprises. Under the new “European Territorial Cooperation” Programme
156, clusters, 
innovation and SME policies are one of the important priorities. 
The decision of the European Parliame nt and of the Council concerning the 7th Framework 
Programme of the European Community for rese arch, technological development and 
demonstration activities (2007-201 3) states that “under the ‘Capacities’ programme, the 
innovative capacities of SMEs and their ability  to benefit from research should be 
strengthened and the development of regional research-driven cl usters should be supported”. 
In this context the “Regions of Knowledge” programme  has been particularly designed with 
the aim to strengthen the research  potential of European regions,  in particular by encouraging 
the development of regional research-driven cluste rs associating universitie s, research centres, 
enterprises and re gional authorities.157  
Finally, clusters and cluster or ganisations play an important role as part of Community 
policies in support of entrepreneurship and innova tion. As explicitly stated in the legal base 
for the Competitiveness and Innovation Programme (CIP)158, actions in relation to 
innovation may include “fostering sector-speci fic innovation, clusters , innovation networks, 
public-private partnerships and cooperation with relevant international organisations, and the 
use of innovation management.” Under this legal provision, the Europe INNOVA cluster 
networks were launched which are also aiming at “developing and exploring new types of 
innovation services” which are te sted by cluster organisations.159 Therefore, the role of the 
Commission in support of clusters also includ es specific measures that aim at promoting 
innovation in general and SME particip ation in clusters in particular. 
Synergy among these European instruments in suppor t of clusters must be ensured in order to 
utilize them more efficiently. The Community Strategic Gu idelines for 2007-2013  clearly 
state that “synergy between Cohe sion Policy, the FP7 and the CIP is vital so that research and 
cohesion policies reinforce each other at regi onal level by providing national and regional 
development strategies showing how this w ill be achieved”. A recent study prepared under 
PRO INNO Europe initiative draws the attention to  the fact that there is a risk of overlapping 
                                                 
156 The “European Territorial Coope ration” Programme replaces and re inforces the former Community 
Initiative INTERREG. 
157 More information on the “Regions of Knowledge” initiative is available at 
http://cordis.europa.eu/fp7/capacities/regions-knowledge_en.html 
158 More information on the CIP is availabl e at http://ec.europa.e u/cip/index_en.htm 
159 More information on the Europe INNOVA Cluster Networks is presented in the brochure “Europe 
INNOVA – Innovation Clusters: The experience of 11 networks” that is available at 
http://www.europe-innova.org/index.jsp?type=page&cid=10337&lg=en 
EN 61   EN of interregional networ king actions among INTERREG156, Europe INNOVA, INNO-Nets, 
ERA-NETs and Regions of Knowle dge type of funding, especially  in the area of support for 
policy making. This study is built upon the report “ Synergies between the EU 7th Research 
Framework Programme, the Competitiveness an d Innovation Framework Programme and the 
Structural Funds ” made on behalf of the European Parliament.160 To help addressing this 
problem in the short term, the Commission has published a draft “Pract ical Guide to EU 
funding opportunities for research, development and innovation”.161 In the future, a cross 
cutting identification of existi ng interregional networks under th e mentioned initiatives would 
certainly help to avoid unnecessa ry overlaps in this area. Such information could be collected 
and published by the European Cluster Observatory.  
In its Opinion on clusters and cluster policies the Committee of the Regions  recommends 
“that the European Commission remedy the fragme nted nature of the measures devoted to 
cluster promotion in the EU, and considers th at these should be grouped under one specific 
line of action to promote clusters and support inter-cl uster cooperation.”162 Whereas a single, 
structured approach towards clusters  does not appear to be r ealistic, taki ng into account 
the different objectives, legal basis and admi nistrative and budgetary procedures to be 
followed, it seems necessary and opportune to  better coordinate between the different 
Community instruments in support of clusters.  
In order to follow a more coordinated approa ch in support of clusters, the Commission’s 
services would have to be fully committed to wo rk closely together and to share experience 
from different Community initiatives, thus resp onding to the objective to  better coordinate in 
particular between the different activities launched under the Structural Funds, the 7th 
Framework Programme for Research and Development and the Competitiveness and 
Innovation Programme. Altogether, these instruments offer complementary Community 
support for all stages of clus ter policies and initiatives , ranging from cluster analysis and 
policy learning to the development and implementa tion of cluster initiati ves (see Figure 15). 
Based on the rationale of the different Community instruments it seems to be adjacent that the 
main activities in support of po licy learning and development would be streamlined under 
the PRO INNO Europe initiative, which offe rs with the European Cluster Alliance163 the most 
inclusive platform for better str eamlining regional, national and Eu ropean cluster initiatives in 
support of cluster excellence in Europe. This  would require to involve all relevant 
Commission’s services in the di scussions of the European Clus ter Alliance and to liaise the 
different regional cluster networks aiming at  mutual policy learning to this work.  
                                                 
160 The study (Reid et al., 2007) is available at: 
http://www.europarl.europa.eu/comparl/itre/2007_fp7_study_en.pdf  
161 The draft “Practical Guide to EU funding oppo rtunities for research, development and innovation – 
Synergies in funding opportunities between: 7th Framework Programme for Research, Competitiveness 
& Innovation Programme, and the Structural Funds” published by the European Commission’s 
Directorate-General for Research (2008) is availabl e at http://cordis.europa.e u/fp7/consulta tion_en.html 
162 See Draft Opinion of the Committee of Regions on Clusters and Cluster Policy, ECOS-IV-024 (CdR 
70/2008 rev. 1 EN/o), that was adopted during the Committee of the Regions Plenary Session on 19.06.2008. 
163 More information about the European Cluster Alliance, and how to join it, is available at 
http://www.proin no-europe.eu/index.cfm?fuseaction=pa ge.display&topicID=223&parentID=0  
EN 62   EN Figure 15: Overview of current and planned EU  initiatives in support of clusters 
Cluster 
support servicesTrans-national 
cooperationCluster 
development
European Cluster ObservatoryEU Initiative for Excellence  (CIP)
European Cluster Policy GroupCohesion Policy (Structural Funds)European Cluster Alliance
Regions for Economic ChangeEurope INNOVA (CIP)Regions of knowledge (FP7)
Enterprise Europe NetworkPolicy learning
& cooperationAnalysis & 
Strategy
INNO-Policy TrendChart
 
The Structural Funds are used by the regions as  the main Community in strument to strengthen 
regional cluster development and innovation capacity . These regional efforts are 
complemented by the Regions of Knowledge in itiative that focuses on encouraging stronger 
links between research and industry, thus br idging between regional re search capacities and 
innovation by learning from each other and stim ulating trans-national cooperation in this 
field. Between both initiatives potential risks of  overlaps and duplication exist which requires 
close coordination between the different Community programmes. 
Further downstream, Europe INNOVA focuses primar ily on the joint deve lopment of new or 
better tools used by cluster organisations in  support of innovative SM Es, thus enhancing 
better business support services for clusters in  Europe. Whereas the Regions of Knowledge 
initiative aims mainly at supporting regiona l capacity building, the new Europe INNOVA 
initiative will facilitate practical cooperation be tween cluster organisations with the view to 
developing new or better support services for innovative SMEs. Both initiatives will focus 
particularly on lead market areas which will add - from different angles - further stimulus to 
the implementation of the Lead Market Initiative. 
Better coordination between the different Co mmunity instruments in support of cluster 
development, trans-national coope ration and cluster management is needed to achieve better 
synergies between research, re gional development and inn ovation. Stronger bridges among 
the different instruments must be created to  better exploit synergie s and strengthen the 
outcomes of the projects funded under the different programmes.  
EN 63   EN 5.2. New challenges in support of clusters  to be addressed at European level 
Many Community initiatives contribute to the de velopment of clusters in Europe, based on 
strategic objectives that have been politically agreed with Me mber States as part of the 
different funding mechanisms, such as the St ructural Funds, FP7 a nd CIP. Taking into 
account the main analytical findings  of this paper, the following challenges  can be identified 
as a matter of priority: 
Challenge Nº 1: To better prioritise Member State’s cluster policies towards the needs of 
world-class clusters in the EU 
The Problem: Many cluster policies and initiatives exist at regional and national level. What 
is still missing is a better prio ritisation and a concentration of  the different support actions 
towards the need of creating more world-class cl usters in the EU in order to foster regional 
specialisation and to avoid an unnecessary proliferation of clus ter initiatives. For this, no 
adequate dialogue structures or  discussion fora exist yet.  
The Action: The establishment of a  European Cluster Policy Gr oup, composed of outstanding 
independent experts from policy authorities, business and academia, would help to identify 
the best approach to support excellence of cluste rs in the EU. It could identify the barriers 
hampering specialisation and propose concrete recommendations for further action, including 
on a better streamlining of Commu nity instruments in support of clusters. The Group would 
play an active role in mobilising the necessary political support for a more strategic approach 
towards clusters and to facilitate discussions wi th Member States and re gions. In order to be 
effective, the Group would have to liaise as closely as possibl e with the European Cluster 
Observatory and the European Cluster Alliance. 
The expected impact:  The Group would facilitate the pol icy discussions on how to support 
the emergence of more world-class clusters in the EU, building upon existing strengths and 
ensuring better consistency be tween the different re gional and national po licies in support of 
clusters. This would help reorienting cluster policies towards a more efficient allocation of 
resources, resulting in higher regional specia lisation and world-class excellence of clusters. 
The Group would act as a “t railblazer” for better cluster polici es at all levels , by contributing 
to a better understanding of the success factor s and difficulties in the emergence of world-
class clusters in the EU. The expected work would increase the awaren ess about the benefits 
of excellence in innovation and of upstream cooperation at policy level between Member 
States in view to strengthe ning the linkages between existing cluster initiatives and 
promoting, wherever opportune, the joint design of new cluster initiativ es. This would allow 
avoiding costly duplication and re ducing the fragmentation of cl uster initiatives in the EU. 
Challenge Nº 2: To better provide Member States and regions with  neutral and reliable 
information about clusters 
The Problem: The European Cluster Observatory 164 launched in 2006 represents a first and 
excellent step to creating a more comprehensive picture of clusters in Europe which has also 
internationally been recognised. Cluster mapping is a difficult a nd highly sensitive task which 
                                                 
164 Information from the European Cluster Observatory is available at http://www.clusterobservatory.eu/  
EN 64   EN requires the continuous search for better me thodologies and statistics. More and better 
indicators need to be used for cluster mappi ng to allow a more comprehensive and realistic 
picture. It is still unsatis factory that the current clus ter mapping can only build upon 
employment statistics. Without  giving up the holistic view of  the cluster mapping exercise, 
intense efforts need to be made in order to in tegrate other indicators and to better analyse the 
impact of clusters on competitiveness and innovation. Furthermore, more and better information about cluster initiativ es and cluster organisations and their activities is needed to 
facilitate trans-na tional cooperation.  
The Action: The European Cluster Observatory shoul d be continued and further improved 
towards becoming a full-fledged information service on clusters and cluster initiatives in Europe. As the current contract comes to an  end in 2008, it would be desirable to launch a 
second phase through a call for proposals whic h takes the above outli ned challenges on board. 
New proposals would be expect ed to build upon the exis ting cluster mapping methodology 
and further improve it by adding additional indi cators. Besides statistical information about 
clusters in Europe and information on clus ter case studies, the Observatory should also 
provide more practical information on cluster orga nisations, their activitie s, services and their 
environment in form of an interactive on-line tool  that would particularly  address the needs of 
innovative SMEs to find access to internationa l markets, business pa rtners, research and 
financing.  
The expected impact: The expected impact of this action would be an improved analysis of 
clusters and cluster initiatives. This would cont ribute to a better design of cluster policies and 
their strategic orientations on the basis of more fact-based information. It would further 
facilitate the impact assessment of cluster polic ies if further indicators would be integrated 
and made available European-wide which woul d also facilitate be nchmarking. In addition, 
innovative SMEs and investors w ould benefit from such data when searching for enhanced 
cluster participation. 
Challenge Nº 3: More and better practical coope ration at policy level between Member States 
The problem: Strengthening  upstream cooperation at policy leve l between Members States is 
actually the core objective of the European Cluster Alliance.165 The new challenge of 
promoting better ways to achieve world-class excellence of clusters in Europe is not explicitly being addressed so far. This would require  designing more focused cluster policies and 
practical instruments in support of this. Furthermore,  legal instruments in support of joint 
cluster policies and initiatives still need to be  practically tested. The Member States would 
benefit from an open policy platform estab lished at EU level by the European Cluster 
Alliance which would address these issues pert inent for practical cooperation across borders. 
Strategic discussions on how to better use synergies between different cl uster policies would 
remain rather theoretical as long as no practical  solutions for closer tr ans-national cooperation 
exist yet.  
The action:  The proposed action would aim at pursui ng the support of the European Cluster 
Alliance under the condition that the focus of  the trans-national cooperation would shift 
towards the need of creating world-class ex cellence of clusters in Europe would. The 
                                                
 
165 More information about the European Cluster Alliance, and how to join it, is available at 
http://www.proin no-europe.eu/index.cfm?fuseaction=pa ge.display&topicID=223&parentID=0  
EN 65   EN European Cluster Alliance – curre ntly involving more than 70 mi nistries, region al authorities 
and innovation agencies across Europe – would offer a suitable platform to develop new 
strategies for the internationalisation of clus ters and removing practic al barriers for trans-
national cooperation between clusters. It would be expected that under this umbrella public 
authorities responsible for cluste r policies and initiativ es from different Member States would 
closely collaborate, aiming at developing and te sting practical solutions for more efficient 
cluster policies in the EU.  
The expected action:  The work under the new phase of th e European Cluster Alliance would 
result in better cluster policies and more effici ent ways to promote exce llence of clusters in 
Europe. It would help creating a common understanding of “state of the art” cluster policies 
and create closer links and pa rtnerships between different Me mber States which would also 
prepare the grounds for a more strategic discus sion on cluster policies in the EU, as intended 
to be initiated and supported by the European Cluster Policy Group. The expected impact could be further enhanced by a liaison of the Eu ropean Cluster Alliance with cluster networks 
supported by other Community initiatives, su ch as with the Regions of Knowledge 
initiative
166 and the Regions for Economic Change initiative.167 
Challenge Nº 4: To better integrate innovat ive SMEs into cluste rs and the Lead Market 
Initiative 
The Problem:  Clusters often benefit from strong support from large innovative companies 
but at the same time they heavily depend on a large number of innovative SMEs that are ready 
for radical innovation. Many cluste r initiatives and clus ter organisations l ack a critical mass 
and strategic orientation to fully  exploit their potential. This is partly because many SMEs are 
not fully integrated in clusters and do not, or  not enough, participate in cluster initiatives.  
The Europe INNOVA cluster networ ks have delivered some very good results to facilitate the 
participation of SMEs in clusters and to fost er their cooperation w ith research and other 
enterprises.168 This successful approach could now be  used to better exploit the innovation 
potential of SMEs for the further implemen tation of the Lead Ma rket Initiative, by 
specifically encouraging the development of  new or better business support mechanism 
delivered by cluster organisations ac tive in the lead market areas.  
The Action:  The current cluster networks under Eu rope INNOVA should not be continued 
“per se” but be further developed towards an integrated “European Innovation Platforms for 
Cluster” that bring together cluster organisations in Europe that are active specifically in lead market areas. The objective would be to deve lop and offer specific support for SMEs to 
innovate faster and to ease thei r access to international market s, business partners, research 
and financing. Cluster organisati ons would work together at a practical leve l to jointly 
develop new or better tools and to implement jo int initiatives in support of innovative SME, 
especially concerning their internationalisati on strategies by improving access to markets, 
capital and knowledge.  
                                                
 
166 More information on the Regions of Knowledge imitative is available at 
http://cordis.europa.eu/fp7/capacities/regions-knowledge_en.html 
167 More information on the Regions fo r Economic Change is available at 
http://ec.europa.eu/regional_policy/cooperation/interregional/ecochange/index_en.cfm 
168 More information about the Europe INNOVA Clus ter Networks at http://www .europe-innova.org/index 
.jsp?type=page&lg=en&classificationId=4961&classificationName=Cluster%20Networks&cid=5104 
EN 66   EN The expected impact:  Such a “European Innovation Platfo rm for Cluster” would facilitate 
the participation of SMEs in clusters and offe r better support services  for SMEs. This would 
improve the innovation capacity of SMEs and add further dynamics and entrepreneurial spirit 
to clusters which would also facilitate th e further implementation of the Lead Market 
Initiative. 
Challenge Nº 5: To raise the quality of  cluster management all over Europe 
The Problem: Cluster initiatives and clus ter organisations are also a modern instrument for 
regional policy and economic deve lopment. Since cluster organisa tions play an important role 
in providing specialised services to enterprise s, the level of their qua lity and professionalism 
matters. Whereas there is clearly a general tendency towards more professionalism and 
excellence of cluster organisatio ns this challenge has not yet been fully addressed in all 
Member States, with the risk that clusters may not exploit their full potential and public 
support is wasted. The challenge is to impr ove the excellence of cluster organisations 
European-wide in order to make more efficient use of available resources and to improve the 
support to SMEs in the framework of clusters.  
The Action: Following a proposal from some Member States, it is proposed to launch a 
“European Pilot Initiative for Ex cellence of Cluster Organisations ” to create a European label 
for cluster management excellence, which woul d promote high quality standards of cluster 
organisations and would support the further pr ofessionalisation of cluster management in 
Europe. This action requires that  a neutral organisation exists which can offer the certification 
of such a label. Therefore, in centives need to be provided for the establishment of a neutral 
organisation representing cluster organisati ons in Europe. Within such a voluntary 
framework, the European label would be awarded to those cluster organisations who meet the 
criteria of quality management. In this re spect it is proposed to build upon the EFQM 
Excellence Model of the European Foundation for Quality Management, which sets out 
indicators such as customer focus, results orientation, an d management by processes or 
partnership development. The European label for cluster management excellence should be 
complemented by a training scheme for cluster orga nisations in order to raise their quality and 
efficiency; furthermore it is pr oposed to establish a club of cluster ma nagers for mutual 
learning and inspiration. 
The expected impact:  The proposed actions would result in a more efficient use of public 
resources and stronger orientati on and professionalisa tion of cluster organi sations in Europe. 
Respectively, they would contribute to higher  quality of cluster management and better 
services provided to SMEs. The actions ar e supposed to facilitate mutual learning and 
reaching excellence, furthermore to create more  and better contacts among cluster managers 
in Europe. They would also raise the recogniti on of cluster management as a new profession, 
which is important to attract talented people to  this profession and to offer them promising 
career paths. 
*** 
All these measures would complement the effort s of the Member States and their regions in 
support of clusters in an ideal manner, e nhancing their impact and adding a European 
dimension to them. To be effective, the differe nt Community instrument s need to be better 
aligned towards those implemented at national a nd regional level. Together, this would create 
a more efficient European fr amework for cluster support .  
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M. Riccaboni (2001), Innovation and competitiven ess in European biotechnology , Enterprise 
papers, No 7, 2002, Office for Official Publications of the European Communities, Luxembourg. 
Andersson, T.; Schwaag Serger, S. Sö rvik, J.; Wise Hansson, E. (2004) The Cluster Policies 
Whitebook , August 2004, International Organisation fo r Knowledge Economy and Enterprise 
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EN 72   EN GLOSSARY  
1. Definitions related to clusters 
Clusters  can be defined as a group of  firms, related economic acto rs, and institutions that are 
located near each other and have reached a suffi cient scale to develop specialised expertise, 
services, resources, s uppliers and skills.169 They are a real economic phenomenon that can be 
economically measured, whereas cluster policies ( ←) are more an expression of political 
commitment to support existing clusters or the emergence of new clusters, and cluster 
initiatives ( ←) are organised efforts to achieve this.  
Cluster categories : See  cluster sectors ( ←).  
Cluster cooperation can take different facets. It can m ean the cooperation amongst and 
between cluster firms ( ←) and other innovation actors located in  different clusters. It can also 
mean the cooperation between policy-makers at  programme level or between at operational 
level  
Cluster(ed) firms  are companies working in a cluster-like environment.170 
Cluster initiatives are organised efforts to enhance the competitiveness of a cluster ( ←), 
involving private business, public bodies and/ or academic institutions within a regional and 
sectoral system.171 They are practical actions to strengt hen cluster development, which can, 
but must not necessarily be, base d on a formulated cluster policy ( ←). Cluster initiatives 
usually follow a bottom-up approach and are managed increasingly by specialised institutions, 
such as cluster organisations ( ←).  
Cluster managers  – or cluster facilitators – are the de dicated individual pe rsons that manage 
a cluster initiative ( ←). 
Cluster mapping  is the indirect identification of clusters ( ←) in a given geographical area 
based on statistical methods meas uring revealed effects that are assumed to be observable 
when the real economic phenomenon of a cluster is present, such as concentrated employment 
rates or higher productivity.172  
Cluster organisations are the legal entities operating the clusters ( ←) in charge of managing 
the participation and access to the clus ter’s premises, facilities and activities.173 They are 
                                                 
169 See the report of the US Council on Competitiveness (2007) Innovation America - Cluster-Based 
Strategies for Growing State Economies , which is available at 
http://www.nga.org/Files/pdf/ 0702INNOVATIONCLUSTERS.PDF 
170 See the “2006 Innobarometer on cluster’s role in facilitating innovation in Europe”,  available at 
http://www.proinno-europe.eu/admin/uploade d_documents/FL187_Innobarometer_2006.pdf 
171 See Sölvell, Lindqvist & Ketels ( 2003). Alternatively, Andersson et al . (2004) define cluster initiatives 
as “conscious actions taken by various actors to create or strengthen clusters”. 
172 See, for instance, the results and methodol ogy of the European Cluster Observatory ( ←) at 
http://www.clusterobservatory.eu/, which provides cluster mapping for 38 cluster sectors or categories 
(←) for the EU-27 Member States, Iceland, Israel, Norway, Switzerland and Turkey.  
173 This definition follows the description concerning aid for innovation clusters that features in the 
“Community Framework for State Aid for Research and Development and Innovation”. See section 5.8 
on ‘Aid for innovation clusters’ of the text of the Community Framework that was published in the 
EN 73   EN considered as new and highly efficient forms of innovation support provid ers that provide or 
channel specialised and customised business su pport services, especially to SMEs. Cluster 
organisations are often also in char ge of managing cluster initiatives ( ←). 
Cluster policy refers to a wider set of specific gove rnment policy interventions aiming at 
strengthening existing clusters ( ←) or facilitating the emergence of new ones. Cluster polices 
may take different forms and follow different obj ectives, such as industrial and SME policy or 
research and innovation policy. Cluster policies range from framework policies setting 
general political objectives to defining meas ures, allocating funding  and organisational 
responsibilities, and setting specific rules for pa rticipation in programme s. Cluster policies are 
in most cases supported and implemen ted by specific cluster programmes ( ←) of 
governments or cluster initiatives ( ←).  
Cluster policy-maker  means the policy-makers res ponsible for cluster policies ( ←) – often 
part of industrial and SME policy, research  and innovation policy, or regional policy. 
Cluster portfolio  is the collection of significant cluster sectors or categories ( ←) in a given 
geographical area. 
Cluster programmes are specific government programme aiming at strengthening existing 
clusters or facilitating the emergence of ne w ones. Cluster programmes comprise specific 
measures aiming at strengthening existing clusters  or facilitating the emergence of new ones. 
Cluster programmes comprise a certain amount of funding for the meas ures and/or cluster 
initiatives ( ←), a public body or organisation in charge  of its implementation and specific 
rules for participati on in programmes.  
Cluster sectors  – or cluster categories – are those so-calle d traded cluster industries, which 
have a choice as to where to locate and serv e markets across regions and, consequently, are 
concentrated geographically.174 The group of cluster sectors or categories, therefore, does not 
comprise local sectors – such as local retail and other local serv ices – that mainly serve local 
markets because they are neither viewed as being exposed to direct competition across regions nor as tending to “cl uster together”.  
2. Description of current and planned EU  initiatives in support of clusters 
The Cohesion policy comprises the financial instrume nts of the European Regional 
Development Fund (ERDF), the European Soci al Fund (ESF) and the Cohesion Fund with a 
total budget of around 347 billion Euros.
175 Approximately 86 billion Euro, representing 25%, 
have been allocated in the current pr ogramming period (2007-2013)  to research and 
innovation. Under the “Convergence” Objective (Ar ticle 4 of the ERDF Regulation), Member 
States are allowed to use ERDF funds to co -finance R&D, innovation and entrepreneurship 
                                                                                                                                                         
Official Journal of the European Union in December 2006 (2006/C 323/01) and that is available at 
http://eur-lex.europa.eu/LexUriServ/site/e n/oj/ 2006/c_323/c_32320061230en00010026.pdf 
174 The 38 traded cluster sectors identified and applied for the cluster mapping of the European Cluster 
Observatory ( ←) are Aerospace, Instruments, Apparel, Automotive, Building Fixtures, Business 
Services, Chemical, Communications, Food, Agricultu ral, Distribution, Education, Entertainment, 
Heavy Machinery, Finance, Fishing, Footwear, Forest, Furniture, Construction, Hospitality, IT, 
Jewellery, Leather, Lighting, Constr. Materials, Medical, Metal, Oil and Gas, Biopharma, Plastics, Power, Production Tech., Publishing, Sporting,  Textiles, Tobacco, and Transportation.  
175 For more information about the Cohesion policy 2007-2013 see http://ec.europa.eu/ 
regional_policy/sources/docoffic/official/regulation/pdf/2007/publications/guide2007_en.pdf 
EN 74   EN activities through public-pri vate partnerships and clusters. Furthermore, under the “Regional 
competitiveness and employment” objective (Ar ticle 5), ERDF funds can be used to 
stimulating innovation and entrepreneurship in al l sectors of the region al and local economy 
by supporting business networks and clusters. Tr ans-national cooperation such as the joint use 
of research infrastructure and exchange of experience can be supported through the 
“European Territorial Cooperation” ( ←).Objective (Article 6).  
The Community Strategic Guidelines on Cohesion 176 which are consistent with the Lisbon 
Integrated Guidelines encourage Member Stat es and regions to focus on those areas of 
investment that help to deliver the National Reform Programmes (NRPs) while taking into account national and regional circ umstances. The Guidelines exp licitly specify the support to 
clusters. Investments in building strong clusters are part of the efforts to strengthen regional 
development in Europe, by better coordinating different policies and thus creating stronger 
regional and national innovation systems. 
The Enterprise Europe Network
177 offers support and advice to entrepreneurs and 
companies across Europe, helping especially SMEs to access innovation networks, to find the 
right business partners and to inform about EU  legislation in order to make the most of 
opportunities in the EU. This coordinated networ k is made up of close to 600 local partner 
organisations in more than 40 countries, in cluding the 27 EU member states, three EU 
candidate countries (Croatia, the former Yu goslav Republic of Macedonia and Turkey), 
members of the European Economic Area (EEA) a nd other participating third countries that 
combines and builds on the former Innovation Relay Centres (IRC) and Euro Info Centers 
(EIC). The Network will work more closely with  cluster organisations to leverage validated 
customised services in different EU regions, such as those develope d and tested under the 
European Innovation Platform for Cluster ( ←) and will inform innovative SMEs about how to 
participate in clusters. 
ERAWATCH  provides information on national resear ch policies, structures, programmes 
and organisations.178 The aim of this service is to suppor t policy making in the research field 
in Europe, by facilitating a better knowledge and understanding of national research systems, 
policies and the environments in which they operate. The INNO-Policy TrendChart ( ←) 
provides similar information concerning innovation policy. 
The Europe INNOVA cluster networks  have comprised eleven trans-national sectoral 
networks of clusters, bringing together more  than 200 public and private organisations in 
eight traditional and high-tech sectors. Since 20 06, these networks enabled project partners to 
identify, analyse and share good practices in cluster management and to address the challenges emerging from globalisation.
179 A number of joint activities aimed at facilitating 
trans-national cluster coopera tion have already been impl emented, ranging from cluster 
visiting schemes and matchmaking events to pa rtnership agreements for the creation of open 
sectoral business platforms of clusters. The ne xt generation of cluste r projects under the 
                                                 
176 See the Council Decision of 6 October 2006 published on 21.11.2006 (Official Journal L 291/ page 11), 
which is available at http://ec.europa.eu/regional_policy/sources/docoffic/2007/osc/index_en.htm 
177 More information about the Enterprise Europe Ne twork can be found at: http://www.enterprise-europe-
network.ec.europa.eu/index_en.htm 
178 More information about ERAWATCH is availabl e at http://cordis.europa.eu/erawatch/index.cfm 
179 More information about the Euro pe INNOVA initiative is availabl e at http://www.europe-innova.org 
and about its Cluster Networks at http://www.europe-innova.org/index.jsp?type=page&lg= 
en&classificationId=4961&classificationName=Cluster%20Networks&cid=5104 
EN 75   EN Europe INNOVA initiative will focus on the creati on of strategic partners hips between cluster 
organisations under a “European Inn ovation Platform for Clusters” ( ←). 
The European Innovation Platform for Cluster is a new initiative to be funded under the 
Competitiveness and Innovation Programme (CIP)180 that will further develop the successful 
approach of the previous generation of Europe INNOVA cluster networks ( ←) towards the 
creation of strategic partnerships  between cluster organisations in Europe active in priority 
areas, such as those selected unde r the Lead Market Initiative.181 The objective of this trans-
national cooperation is that cluster organisations work together at a practical level to identify complementarities, share infrastructures and to  jointly develop new or better tools and to 
implement joint initiatives in  support of the internationa lisation of innovative SMES by 
improving access to markets, capital and knowle dge. A Call for Proposals is expected for 
autumn 2008 with an estimated budget for the ne xt phase of three partnerships under this 
Europe INNOVA Platform of 7 million Euros. The tools and instruments developed and tested by these cluster partnerships will be inte grated and leveraged, as widely as possible, 
into the new Enterprise Europe Network ( ←). 
The European Cluster Alliance  is an open trans-national c ooperation platform for cluster 
policy-makers established under the PRO INNO Europe initiativ e in 2006, bringing together 
more than 70 public partners including nati onal and regional authorities and innovation 
agencies responsible for the design and implementation of cluster policies ( ←).
182 The 
Alliance promotes mutual policy learning as well as the development of joint actions and 
practical tools. It has already undertaken the fi rst steps for fostering practical cluster policy 
cooperation in Europe. In the new phase starti ng in 2009, the Alliance will particularly focus 
on developing better policies for st imulating a greater international orientation of clusters in 
Europe.  
The European Cluster Memorandum  is a short and concise 8-page political document 
prepared by a High Level group on clusters in November 2007 outlining an agenda for policy 
action for promoting European  innovation th rough clusters.183 It introduces a number of 
principles for cluster policy in Europe and is  addressed to national and regional authorities 
and innovation agencies which are managing clus ter programmes. It was presented at the 
European Presidency Conferen ce on innovation and clusters ( ←) in January 2008 in 
Stockholm and has so far been signed by more than 60 public organisations. 
The European Cluster Observatory  developed in 2006 under the Europe INNOVA 
initiative offers an online cluster mapping ( ←) database of statistical clusters in 32 European 
countries and 38 sectors. In a ddition to the measuring and iden tification of regional clusters 
based on employment data, the European Cluster Observatory’s website further provides case 
studies of cluster policie s and other information.184 It is the intention to further improve the 
website in 2009 towards a full-fledged informati on service on clusters and cluster initiatives 
                                                 
180 More information on the CIP is availabl e at http://ec.europa.e u/cip/index_en.htm 
181 The European Commission’s (2007a) Communication on “A lead market initiative for Europe”, COM 
(2007)860 of 21.12.2007 and further information on the Lead Market Initiative is available at 
http://ec.europa.eu/enterprise/leadmarket/leadmarket.htm 
182 More information about the European Cluster Alliance, and how to join it, is available at 
http://www.proin no-europe.eu/index.cfm?fuseaction=pa ge.display&topicID=223&parentID=0  
183 The European Cluster Memorandum is available at http://www.proinno-europe.eu/ 
NWEV/uploaded_documents/European_Cluster_Memorandum.pdf 
184 See the website of the European Cluster Ob servatory at http://www.clusterobservatory.eu 
EN 76   EN by providing additional information about cluster organisations, their activ ities, services and 
their environment as well as offering match-maki ng facilities in view to facilitate trans-
national cooperation across Europe. 
The European Cluster Policy Group  is a new High Level Advisory Group to be established 
under the PRO INNO Europe initiative with th e objective to advice the European Commission 
on strategic objectives to better facilitate th e emergence of more world-class clusters in 
Europe. The Group will consist of  20 outstanding inde pendent experts from policy authorities, 
business and academia that will be selected th rough an open Call for Expressions of Interest. 
Following consultation with the European Cluster Alliance ( ←), the Group is expected to 
steer cluster policy discussions at  EU level and to draw recomm endations for preparing future 
policy actions. The Group is expected to be fu lly operational by early 2009 and to complete 
its tasks within a period of 18 months. 
The “European Grouping on Territorial Cooperation”185 is a legal instrument primarily 
developed for managing Cohesion Policy ( ←) programmes which may also  be used to foster 
cooperation between public author ities (or other bodies governed by public bodies law) in the 
trans-national support of clusters. It can be  used for developing and implementing common 
support services and shari ng access to research a nd testing facilities.  
The European Pilot Initiative for Ex cellence of Cluster Organisations  is a new initiative to 
be launched under the Europe INNOVA initia tive with the objec tive to raise the 
professionalism of cluster organisations ( ←) in Europe. A quality standard and a European 
label for excellent cluster organisations wi ll be developed on the basis of the EFQM 
Excellence Model 186 as well as cluster management tr aining and coaching activities will be 
organised across Europe for cluster managers ( ←). The action may lead to the creation of a 
European Foundation of cluster managers. 
The European Presidency Conferences on Clusters  represent two major events on clusters 
in 2008. The first European Pres idency Conference on innovati on and clusters was jointly 
organised by the Slovenian EU Presidency and the Swedish government in Stockholm in 
January 2008. The European Cluster Memorandum ( ←) was presented and discussed at this 
event with the outcome of a Stockholm Declar ation calling upon the European Commission to 
prepare concerted actions to further suppor t cluster development in Europe. A second 
European Presidency Conference on clusters will be organised by the French Presidency in Sophia Antipolis on 13-14 November 2008 that w ill discuss the measures suggested by this 
Communication as well as thei r implementation, with  a view to prepare an input paper on 
clusters for discussion at the December 2008 Competitiveness Council. 
The “European Territorial Cooperation”
 Objective of the European Regional Development 
Fund (ERDF) under the new Cohesion Policy ( ←) – which replaces and reinforces the former 
Community Initiative INTERREG – can be used  to support regional cooperation for cluster 
development. It aims at integrated territorial development, interregional co-operation and 
exchange of good practice.  
                                                 
185 See Regulation (EC) No 1082/2006 of the European Parliament and of the Council of 5 July 2006, as 
published in the Official Journal of the European Union (L 210/ page 19) on 31.07.2006, available at http://ec.europa.eu/regional_policy/sources/doco ffic/official/regulation/newregl0713_en.htm 
186 Detailed information about the EFQM model of the European Foundation For Quality Management can 
be found at: http://www.efqm.org/ 
EN 77   EN The INNO-Policy TrendChart  provides a database, policy brie fings and reports that describe 
and analyse major innovation policy trends at national and regional levels across Europe in an 
independent way.187 It aims to contribute to policy a ssessment and to identify examples of 
good practice, thus improving the basis for de cision making in innovation policy, including 
cluster policy ( ←). ERAWATCH ( ←) provides similar information concerning research 
policy. 
The Regions for Economic Change (RFEC) 188 is a new initiative under the “European 
Territorial Cooperation” Objective ( ←) designed to help regions gain maximum benefit from 
the wealth of knowledge, experience and go od practice available in other regions, by 
integrating ideas developed through interregional coopera tion (INTERREG IVC) and urban 
development network (URBACT II) programmes in to the region’s mainstream Operational 
Programme for implementing Structural Funds. It ai ms to address some of the core issues that 
Europe is facing by the iden tification of 30 priority themes focused on economic 
modernisation and the renewed Lisbon agenda and it offers the Commission expertise to a 
number of networks. The initiativ e can be used to assist Member  States and regions in their 
efforts to further improve their innova tion strategies and cluster policies. 
The Regions of Knowledge189 initiative aims to support the development of research-driven 
clusters and their cooperation at EU level. It will contribute to the de velopment of strategic 
research agendas by regional public authorities and other stakeholders . Particular emphasis 
will be put on areas with a clear economic deve lopment potential for the regions, such as 
those identified in the Lead Market Initiative . The initiative is part of the “Capacities” 
category of the Seventh Research Framework Pr ogramme (FP7) with an allocated budget of 
126 million Euro for the period 2007-2013. Two Ca lls for proposals were launched in 2008 
with a budget of around 10 million Euro and an other Call for proposals will be launched in 
2009 with an indicative budget of around 16 million Euro. 
                                                 
187 More information about the INNO-Policy TrendCha rt is available at http://www.proinno-europe.eu/ 
index.cfm?fuseaction=page.display&topicID=52&parentID=52 
188 More information about this initiative can be found at: 
http://ec.europa.eu/regional_policy/cooperation/interregional/ecochange/index_en.cfm 
189 Further information about this initiative can be found at: http://cordis.europa.eu/fp7/capacities/regions-
knowledge_en.html