Commission staff working document - Annex to the communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions - The concept of clusters and cluster policies and their role for competitiveness and innovation: Main statistical results and lessons learned {COM(2008) 652 final
Date: 2008-10-17
Institutions: European Commission
Subjects: economic growth, group of companies, innovation, small and medium-sized enterprises

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 17.10.2008 
SEC(2008)2637 

COMMISSION STAFF WORKING DOCUMENT  

ANNEX to the 

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE 
EUROPEAN PARLIAMENT, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

The concept of clusters and cluster policies and their role for competitiveness and 
innovation: Main statistical results and lessons learned 

{COM(2008) 652 final}

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TABLE OF CONTENTS 

Introduction ................................................................................................................................ 3 

1. 

1.1. 

1.2. 

1.3. 

1.4. 

2. 

2.1. 

2.2. 

2.3. 

3. 

3.1. 

3.2. 

3.3. 

4. 

4.1. 

4.2. 

4.3. 

5. 

5.1. 

The concept of clusters and main definitions............................................................... 5 

The definition and concept of clusters ......................................................................... 5 

The concept and economic rationale of clusters .......................................................... 7 

The emergence of clusters............................................................................................ 8 

Identification and measurement of clusters................................................................ 11 

The economic impact of clusters on competitiveness and innovation....................... 19 

Clusters and innovation performance of firms and regions ....................................... 19 

Clusters and specialisation ......................................................................................... 24 

Clusters and economic performance .......................................................................... 28 

Cluster policies in Europe: Concepts and main characteristics ................................. 30 

Concept and rational of cluster policies in Europe .................................................... 30 

The role of trans-national cooperation at policy and programme level for 
strengthening clusters................................................................................................. 36 

Community support for transnational cluster cooperation at policy and programme 
level: First results and future challenges.................................................................... 37 

Cluster initiatives and cluster organisations in Europe .............................................. 42 

Concept and role of cluster organisations .................................................................. 42 

The role of trans-national cooperation between cluster initiatives and cluster 
organisations for strengthening clusters..................................................................... 47 

Community support for transnational cluster cooperation between cluster initiatives 
and cluster organisations: First results and future challenges.................................... 52 

Towards better complementarities between regional, national and European efforts in 
support of clusters: The main challenges ahead......................................................... 59 

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 provide Member States and regions with neutral and reliable 

information about clusters.......................................................................................... 63 

Challenge Nº 3: More and better practical cooperation at policy level between Member States

.................................................................................................................................... 64 

Challenge Nº 4: To better integrate innovative 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 

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INTRODUCTION 

The  main  objective  of  this  Working  Paper  of  the  Commission  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  Union:  Implementing  the  broad-based  innovation 
strategy”.1  

Clusters  are  becoming  an  increasingly  popular  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 purpose of this paper is neither to evaluate the 
impact  of  specific  individual  cluster  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 concept of clusters and its economic 
impact as well as on current policy approaches in their support. 

The statistical findings presented in this paper 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 Alliance3 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 
2 

3 

4 

5 

6 

7 

8 

9 

COM (2008) 652 of 17.10.2008 
Information from the European Cluster 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-innova.org/ index.jsp?type=page&cid=8702&lg=en 
More information on the European Cluster Alliance, and how to join it, is available at 
http://www.proinno-europe.eu/index.cfm?fuseaction=page.display&topicID=223&parentID=0 
More information on the INNO-Policy TrendChart is available at http://www.proinno-europe.eu/ 
index.cfm?fuseaction=page.display&topicID=52&parentID=52 
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 
The Cluster Initiative Greenbook by Sölvell, Lindqvist & Ketels (2003) is available at 
http://www.cluster-research.org/greenbook.htm 
More information on the High Level Advisory on clusters is available at the Europe INNNOVA website 
at http://www.europe-innova.org 
The European Cluster Memorandum is available at http://www.proinno-europe.eu/ 
NWEV/uploaded_documents/European_Cluster_Memorandum.pdf 
More information on the conference which was organised jointly by the Swedish government under the 
Slovenian presidency, with support of the PRO INNO Europe initiative, is available at 
http://www.VINNOVA.se/innovationandclusters  

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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 broadest sense, clusters can be defined as regional concentrations of 
specialised  companies  and  institutions  connected  through  multiple  linkages.  However,  other 
definitions  are  used  as  well,  depending  on  the  context  and  purpose  of  the  discussion.  In 
particular,  it  seems  to  be  important  to  clearly  distinguish  between  clusters,  cluster  policies 
and  cluster  initiatives.  Whereas  clusters  are  a  real  economic  phenomenon  that  can  be 
economically  measured,  cluster  policies  are  more  an  expression  of  political  commitment  to 
support  existing  clusters  or  the  emergence  of  new  clusters.  Cluster  initiatives  are  practical 
actions to strengthen cluster development, which 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  innovation.  It  presents  an  in-depth  analysis  of  the 
available  statistical  findings  on 
that  clusters  can  have  on 
competitiveness,  economic  growth,  productivity,  innovation  and  employment  and  thus 
explains why clusters matter in economic terms.  

the  economic 

impact 

Chapter 3 provides an overview of cluster policies implemented in the regions and Member 
States  in  Europe.  Cluster  policies  may  take  different  forms  and  follow  different  objectives 
which  make  it  difficult  to  clearly  categorise  them.  A  full  assessment  of  their  impact  is  not 
possible at this stage, taking into account the lack of comparable data and the methodological 
difficulties  to  measure  multiple  and  long-term  effects  of  horizontal  polices.  Under  this 
chapter,  different  approaches  towards  trans-national  cluster  cooperation  at  policy  level  are 
presented, together with their first results. 

Chapter 4 looks at the role that specific cluster initiatives 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 number of policy options and their 
expected impact in view of better coherence between the different policies used in support of 
clusters in Europe. 

10 

More information on the PRO INNO Europe initiative is available at http://www.proinno-europe.eu/ 
and on the Europe INNOVA at http://www.europe-innova.org 

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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  economic  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  drawn  between  clusters  as  a  real  economic 
phenomenon and cluster policies and initiatives 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.  Furthermore,  it  describes  different  approaches  to 
measure clusters. In this respect, this chapter outlines in particular the methodology used by 
the  European  Cluster  Observatory,  which  provided  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 view the main purpose is to better understand 
the drivers of competitiveness and growth, other definitions may follow different objectives, 
such  as  providing  a  legal  framework  for  funding  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 and more technical terms in order to provide the 
framework for the application of State Aid rules11 and other forms of financial support.  

large  undertakings  as  well  as 

The  “Community  Framework  for  State  Aid  for 
Research and Development and Innovation”11 defines 
independent 
innovation  clusters  as  “groupings  of 
undertakings  —  innovative  start-ups,  small,  medium 
and 
research 
organisations  —  operating  in  a  particular  sector  and 
region and designed to stimulate innovative activity by 
promoting  intensive  interactions,  sharing  of  facilities 
and  exchange  of  knowledge  and  expertise  and  by 
transfer, 
contributing 
networking  and  information  dissemination  among  the 
undertakings in the cluster.” 

technology 

effectively 

to 

actors, 

economic 

In  more  general  terms,  clusters  can 
be  defined  as  a  group  of  firms, 
related 
and 
institutions that are located near each 
other  and  have  reached  a  sufficient 
specialised 
develop 
to 
scale 
expertise, 
resources, 
services, 
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 
the  emphasis  on 
as  well  as 

networking and cooperation between companies and institutions.13  

11 

12 

13 

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 critical mass, notably through specialisation in a certain 
area of R&D&I and taking into account existing clusters 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  
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 
The aspect of the regional dimension is itself again subject to definition. 

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Clusters  are  defined  by  relationships,  not  memberships  and  their  spatial  boundaries  are 
variable and not necessarily corresponding with political borders. 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  consider  reasonable  for  meeting  and  networking. 
Geography  is  therefore  not  a  stable  concept  but  influenced  by  factors  such  as  travel 
conditions,  cultural  identity,  and  personal  preferences.  New  forms  of  transport  and 
communication, such as the Internet, are also changing the spatial dimensions of a cluster. 

An important difference exists between the empirical 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  within  a  particular  sector.  In  contrast,  cluster  policy  is  about 
expressing  a  focused  strategy,  setting  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  spontaneously  created  without 
any  political  support,  cluster  policies  sooner  or  later  resulting  in  clusters  but  also  cluster 
policies without a statistically significant impact on cluster formation. 

Cluster policies can be defined as specific 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  policy.  Cluster  policies  are  in  most  cases 
supported and implemented by specific cluster programmes of governments or initiatives. In 
consequence, cluster initiatives can be understood as “organised efforts to increase growth 
and  competitiveness  of  clusters  within  a  region,  involving  cluster  firms,  government  and/or 
the research community”.14 As part of this, cluster organisations often play an important 
role as service providers for the support of clusters. 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.15  

The set-up of cluster organisations or networks is often supported by a clear mandate and 
public  funding  from  authorities  at  regional  level  or  more  spontaneously  initiated  within  the 
triangle of universities, incubators and finance, in view to overcome obstacles to cooperation 
and allow trust building between partners. When mature and successful, cluster organisations 
tend to raise the majority of their operating costs themselves by membership and service fees, 
participation fees for training and conferences, sponsoring etc.  

14 

15 

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”. 
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/en/oj/ 2006/c_323/c_32320061230en00010026.pdf 

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1.2. 

The concept and economic rationale of clusters  

The  concept  of  clusters  is  a  modern  description  of  the  long  observed  phenomenon  of 
geographical  concentration  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  agglomeration  of  economic  activities  in  terms  of  availability  of  a 
qualified  workforce  and  specialisation.  Similarly,  Schumpeter  (1939)  referred  to  the 
“swarming”  or  clustering  of  industry.  The  concept  of  clusters  is  very  broad  and  comprises 
different perspectives and aspects covered by other concepts that have been around for a long 
time.  It  builds  upon  traditional  location  and  agglomeration  theory  and  integrated  other 
concepts, such  as  the concept  of “industrial districts”, growth poles  (“poles de croissance”), 
new  industrial  spaces,  systems  of  production,  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 concept of “industrial 
districts” for regional policy and territorial development in his article “From industrial 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  industrial  policy.  He  also  stressed  the  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  clusters  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  thought  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  competences  in  the  labour  forces,  and  supporting 
institutions which increase knowledge flows and spill-overs as a result 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, firms 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 worldwide in providing the best framework 
conditions  in  order  to  facilitate  business  growth  and  to  attract  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  support  services  or  training  and  coaching  of 

16 

17 

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 conditions; related and supporting industries; together with 
government and chance as additional determinants.  
See Audretsch & Feldman (1996) and Jaffe, Trajtenberg & Hendersen (1993). 

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staff.  Cluster  organisations  help  to  channel,  facilitate  or  provide  access  to  facilities  and 
services,  which  may  include  specialised  research  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 intense competition and close cooperation, sometimes 
described  as  “co-opetiton”.  Geographical  proximity  is  believed  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 trust established between actors. This in turn can be 
facilitated through continuous face-to-face contacts, to which efficient cluster organisations 
contribute by encouraging networking and cooperation.  

•  Clusters are, thirdly, characterised by a certain dynamic social and organisational element, 
the  so-called  “institutional  fix”  or  social  glue  that  holds  the  different  interlinked 
innovation  actors  –  such  as  universities,  businesses  and  public  authorities  –  together  and 
facilitates  intense  interaction  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 cooperation in the knowledge triangle of education, research 
and  innovation  are  crucial  for  realising  competitive  advantages  in  times  of  increasing 
complexity of new technologies, products and services as well as of changing requirements 
for skills and competences.  

•  The  –  often  unplanned  –  intense  formal  and  informal  contacts  and  exchange  of 
business  information,  know-how,  and  technical  expertise  within  clusters  can  lead  to 
technological  spill-overs18  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.  While  the  above  mentioned  dimension  of 
geographical proximity is seen to facilitate trust and close cooperation between innovation 
actors  within  clusters,  the  access  to  new  knowledge  and  input  from  other  clusters  also 
needs to be ensured through global 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  and  in  the  modern  economy.  Some  prominent 
examples  of  clusters  with  a  global  reach  are  easily  identifiable  throughout  a  range  of 
industries,  including  financial  services  (London  City,  New  York),  film  (Hollywood  and 
“Bollywood”),  cars  (Detroit,  Modena,  Toyota  City,  Wolfsburg,  Stuttgart,  etc.),  watches 
(Switzerland  and  Japan),  optical  equipment  (Tokyo),  flowers  (The  Netherlands  and 
Colombia),  computer  software  (Silicon  Valley,  Bangalore),  marine  technology  (Southwest 
Norway), mobile telecommunications (Stockholm and Helsinki), wine (Barossa Valley, Rioja, 
Bordeaux,  Southern  Chile  and  parts  of  California),  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 following its own trajectory and history. 

18 
19 
20 
21 

See Audretsch & Feldman (1996) and Jaffe, Trajtenberg & Hendersen (1993). 
See Florida (2002) and Johannison (1987). 
See Bathelt, Malmberg & Maskell (2002). 
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 

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The emergence of a cluster in a particular location can be explained differently. A first type of 
explanation relates to given factor advantages, such as a particular climate, soil, ore deposits, 
forest resources, transportation routes or ports. The location of wine clusters, forest, pulp and 
paper  clusters  and  other  clusters  based  on  natural  resources  can  often  be  explained  by  the 
geography  of  production  factors.  A  second  type  of  explanation  refers  to  historical 
“accidents”,  such  as  the  location  where  several  successful  entrepreneurs  start  a  business 
and/or a large pool of talent and research activities gather. For clusters to grow and prosper 
many  ingredients  are  needed,  including  demand  sophistication,  factor  upgrading  and 
specialisation,  emerging  strategies  of  competition  and  cooperation,  institutional  conditions 
favouring innovation and change or political actions.23 

Successful  clusters  encapsulate  all  the  activities  needed  to  deliver  a  particular  value  to 
customers and they cross the traditional definitions of industries and of manufacturing versus 
services.  They  can  emerge  even  where  companies’  locations  are  not  determined  by  the 
location  of  markets  or  natural  resources.  Their  specific  nature,  including  their  spatial 
coverage, differs according to technology, market conditions, and other factors that influence 
the geographic extent and relative strength of linkages.  

Clusters  are  not  stable  over  time  but  change  continuously.  One  example  for  such 
evolutionary  process  is  the  Humber  seafood  cluster  in  the  UK,  which  transformed  from  a 
commodity  producer  within  an  increasingly  competitive  global  frozen  seafood  industry  to  a 
leading  value-added  fresh/chilled  fish  hub  serving  Europe.24  While  it  remained  a  maritime 
cluster, the competitive advantage and R&D focus moved away from a focus on fishing and 
processing  technology  to  global  logistics  as  well  as  from  being  centred  around  the  port  to 
being  linked  to  the  airport.  Another  example  is  the  Marche  Music  Cluster  in  Italy,  which 
transformed  from  traditional  accordion  production  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  upgrading  of  this  cluster.  There  are  many  more 
examples  of  this  type  suggesting  that  successful  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 intensively in networking. The 2006 Innobarometer on 
clusters26 finds for instance that networking is most 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 networks 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 

23 
24 

25 
26 

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 
See Porter (1990). 
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.clusterobservatory.eu/index.php?id=68 
See Tappi (2005). 
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 

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The  continuous  success  of  clusters  depends  on  their  capability  to  change  and  to  adapt. 
The  high  degree  of  specialisation  associated  with  clusters  bears  the  risk  of  greater 
vulnerability  to  market  shocks  if  a  region’s  portfolio  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.  Besides  that,  a  higher  agglomeration  of  economic 
activities  is  likely  to  cause  over  time  agglomeration  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 promising 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 success 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  the  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 tradition and historical 
preconditions (66), industrial structure (61) and local policies, latter 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  firm  (62),  special  policy 
measures (53) and historical events such as wars (52) are the three most frequently mentioned 
important  factors  which  represent  a  mix  of  chance  and  good  policies.  Among  the  “self-
augmenting  processes”,  the  accumulation  of  human  capital  (116),  the  cooperation  among 
firms  (87)  and  the  choice  of  co-location  with  other  firms  (83)  are  the  three  most  important 
factors identified as important by the majority of the case studies. It should be pointed out that 
intra-industrial  and  inter-industrial  spill-overs  as  well  as  buyer-supplier  relations  partly 
overlap  with the cooperation factor  which  therefore 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 conditions and processes is mentioned as 
an important factor causing the emergence of the cluster in the respective case studies. Each case study 
is classified as either mentioning the individual factor as “important”, “unimportant” or as giving “no 
information”.  

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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 qualitative 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  indirectly  by  measuring  the 
revealed effects assumed to be observable when a cluster is present. 

Hundreds  of  case  studies  exist  and  they  are  well-documenting  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  cluster  across  Europe  (see 
Figure 1), together with a summary 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  “Analysing  ERDF  co-financed  innovative 
projects”  presents  a  comparative  analysis  of  six  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  research  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  information  about  the  emergence  and  strengths  and 
weaknesses  of  a  particular  cluster.  This  may  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. Quite often, no clear distinction is drawn between 
clusters  as  empirical  factors  and  cluster  initiatives  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  crucial  cluster  linkages,  processes  and  interactions 

28 

29 

30 

31 
32 

The case studies compiled by the European Cluster Observatory are available at 
http://www.clusterobservatory.eu/index.php?id=68, together with 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). 
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 
See Technopolis (2008). The study is available at 
http://ec.europa.eu/regional_policy/sources/docgener/evaluation/pdf/innovative_projects_fin.pdf 
See Saublens et al. (2008) 
The Cluster Initiatives Database of The Competitiveness Institute (TCI) is available at 
http://www.competitiveness.org/cid 

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between innovation actors as well as other important factors for the emergence and working 
of  a  particular  cluster.  The  drawback  is  that  this  methodology  is  based  on  interviews  with 
local  experts  that  are  very  time-intensive  to  undertake  and  to  analyse.  As  dynamics  change 
over  time,  the  results  of  such  methodology  may  become  quickly  outdated.  Individual 
anecdotal evidence is always case-specific, which makes it difficult to compare 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 clusters by the European Cluster Observatory 

Source: Competitiveness.com (2008), Europe INNOVA Cluster Mapping Project draft report.28  

The  second  main  approach  of  identifying  clusters  concerns  the  various  quantitative 
techniques  that  rely  on  more  sophisticated  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 rates 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. 

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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 districts in Italy representing 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  delivered  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  comparable  and  consistent  methodology  across  all  EU 
countries. It identifies clusters based on regional employment data 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  geared  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 cluster has reached ‘specialised 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,  and  assigning  each  cluster  0,  1,  2  or  3  “stars” 
depending on how many of the below criteria are met.36 

33 
34 
35 

36 

See also OECD (2007) and Isaksen & Hauge (2002). 
For more on information see http://data.isc.hbs.edu/isc/index.jsp and Porter (2003).  
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,  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.  Local  sectors  –  such  as  local  retail  and  other  local  services  –  that  mainly  serve  local 
markets  are  not  considered  because  they  are  neither  viewed  as  being  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 
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. 

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•  Size: if employment reaches a sufficient share of total European employment, notably if a 
cluster is in the top 10% of all regions in Europe 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  cluster  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 category which account for the largest 
proportion of their region’s total employment  

The statistical mapping of regional clusters based 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%). Figure 2 provides an overview.38 

Figure 2: Cluster presence in Europe – Results from the European Cluster Observatory 

Number of  
regional cluster 

Percentage  of  total 
of regional clusters 

Percentage  of  total 
of potential areas 

3 star clusters 

2 star clusters 

1 star clusters 

Total  number  of  regional 
clusters (1-3 stars) 

155 

524 

1338 

2017 

7.68 % 

25.98% 

66.34% 

100% 

1.58% 

5.34% 

13.65% 

20.57% 

Total number of potential 39 
areas of cluster development  

9804 

n.a. 

100% 

37 

38 

39 

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  countries  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 employment on the level of all regions. This indicates 
that  the  region  is  specialized  in  the  industry.  Further  information  can  be  found  for  instance  at: 
http://www.nordicinnovation.net/_img/cluster_benchmarking_project_final_report.pdf 
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.org/ index.jsp?type=page&cid=8702&lg=en 
The total number of potential areas of cluster development is calculated by multiplying the 258 regions 
analysed  at  NUTS  2  level  (within  the  EU-27  countries,  Iceland,  Israel,  Norway,  Switzerland  and 
Turkey) by the number of 38 cluster categories applied, which excludes sectors that mainly serve local 
markets.  

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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 worthwhile 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 emerged whereas such a top cluster in Hungary 
disappeared. Even greater changes could be observed for “one star” and “two star” clusters, 
which may be either the effect of changing market conditions or successful 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  other  statistical  indicators,  thus  offering  new  insights  into 
economic realities and dynamics by further correlation analysis. Even if such results need to 
be interpreted with caution as they do not reveal causalities they may nevertheless contribute 
to a better understanding of the economic importance of clusters. Although statistical cluster 
mapping should not be confused with an impact assessment of cluster policies, the impact of 
such  policies  should  ultimately  result  in  effects  that  can  be  identified  and  measured  by 
statistical cluster mapping, in particular 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  locations  decisions,  like  wages  and  transportation  costs.  This 
approach is based on the assumption that if the interactions are meaningful, they should reveal 
themselves in the actual geographical patterns of economic activity. However, this remains an 
assumption and there is no proof that such 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 performance 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 categorisation of data, such as for the 
thresholds used for the definition of the relative strengths of clusters. In this context, a slightly 
different methodology has recently been followed for the identification of clusters located in 
the  Baltic  Sea  Region,  with  the  view  to  better  reflect  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  and  employment  for  the 

40 

41 

See Ketels & Sölvell (2006). The report of the Cluster Mapping project of Europe INNOVA on 
“Innovation Clusters in the 10 New Member States of the European Union” is available at 
http://www.europe-innova.org/servlet/Doc?cid=7752&lg=EN 
See Copenhagen Economics (2007) Internal Summary Report WP4, BSR InnoNet, Draft Version, 
October 2007. More information about the Baltic Sea Region Innovation Network (BSR INNO-Net) at 
http://www.proinno-europe.eu/index.cfm?fuseaction=page.display&topicID=65&parentID=65. 

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automotive sector shows, for example, that a number 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, necessarily limits the score for specialisation and focus 
following the current methodology of the 3-star system. 

Figure 3: Comparison of the evaluation of automotive cluster 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 

Piemonte (Turin), IT 

85 915 

Piemonte (Turin), IT 

136 353 

85 915 

Oberbayern (München), DE  

82 339 

Oberbayern (München), DE  

82 339 

Braunschweig, DE 

79 997 

Braunschweig, DE 

Dogu Marmara (Bursa), TR 

44 901 

Cataluña (Barcelona), ES 

Västverige (Gothenburg), SE 

42 832 

Île de France (Paris), FR 

Karlsruhe, DE 

40 694 

Lombardia (Milan), IT 

79 997 

74 086 

61 351 

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 

32 935 

Västverige (Gothenburg), SE 

42 832 

Severovychod (Hradec 
Králové), CZ 

31 578 

Karlsruhe, DE 

40 694 

Stredni Cechy (Prague Surr), CZ 

29 511 

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.  First,  the  regional  level  –  NUTS  2  –  at  which 
European  data  is  available,  is  based  on  administrative  boundaries  that  may  not  reflect 

42 

These four highlighted regional clusters (Cataluña, Île de France, Lombardia and Vlaams Gewest) are 
all evaluated as 1-star.regional clusters by the European Cluster Observatory.  

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economic  interactions.43  NUTS  2  regions  differ  significantly  in  geographic  and  population 
size.44  Second,  the  industry  level  statistical  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  richness  of  clusters  as  groupings  of  economic  activities  from 
different sectors.45 Third, the only indicator that is available in Europe across all regions and 
industries  is  employment.46  This  problem  of  data  quality  and  availability  obliges  to  reach  a 
second-best compromise on which selected indicators to choose at European level. 

Another constraint is that the current industrial classification systems, whether NAICS (US) 
or  NACE  (Europe)  do  not  sufficiently  reflect  the  emergence  of  new  industries,  such  as 
biotechnology. If the basic statistical data is not available, more refined cluster sectors cannot 
be defined neither. One challenge in this respect 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 their sector. This is for instance 
the  case  of  the  regions  of  Toulouse  and  Hamburg  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 threshold 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  recent  technological  developments  and  new  cross-
sectoral  patterns.  To  this  end,  the  analysis  needs  to  be  further  improved,  by  considering 
further statistical indicators and qualitative information. It seems to be a reasonable approach 
to  cross-check  the  results  from  the  European  Cluster  Observatory  with  other  available 
statistical analysis, such as from the Regional Innovation Scoreboard49 or on European R&D 

43 

44 

45 

46 

47 
48 

49 

More information on the Nomenclature of Territorial Units for Statistics (NUTS) is available at 
http://ec.europa.eu/eurostat/ramon/nuts/home_regions_en.html 
Some NUTS 2 regions, e.g. Denmark, 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.  
At this level, even the best allocation of industries 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 sophisticated analysis of cluster relations between different industries. 
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. 
See Nielsen (2007).  
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. 
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 

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and  technological  specialisations50  in  the  global  economy.  This  would  certainly  enrich  the 
results  and  test  their  robustness.  The  methodology  of  the  European  Cluster  Observatory 
should  also  have  the  potential  to  be  further  applied  to  specific  sectors  by  adding  additional 
indicators and using a refined methodology. The first case of this type will be provided under 
a  study  mapping  maritime  clusters,  which  applies  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  applied  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 

51 

Information on data on R&D are available at the ERAWATCH website at 
http://cordis.europa.eu/erawatch/index.cfm?fuseaction=intService.rdSpecialisation 
See the Commission Staff Working Document on Maritime Clusters, SEC(2007)1406 from 17.10.2007, 
available on application at http://ec.europa.eu/transparency/regdoc/recherche.cfm?CL=en 

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2. 

THE ECONOMIC IMPACT OF CLUSTERS ON COMPETITIVENESS AND INNOVATION 

Clusters  are  seen  as  important  drivers  of  competitiveness  and  innovation.  This  chapter 
presents the main statistical findings currently available on the economic impact that clusters 
can  have  on  competitiveness,  economic  growth  and  prosperity,  productivity,  innovation  and 
employment and thus explains why clusters may matter. The analysis of the potential impact 
of clusters is a field of great academic and political 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 further analysis based on correlations with other key 
economic key indicators. The available data provided 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  innovation  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.  The  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  (universities),  dynamic  entrepreneurship  and 
the 
availability of risk capital (private sector) as well as on a supportive 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 flows of tacit knowledge, the 
presence  of  a  skilled  labour  as  well  as  unplanned  interactions  that  are  critical  parts  of  the 
innovation process. Cluster firms interact more frequently 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 

53 

54 

55 
56 

More information on the European Cluster Observatory is available at 
http://www.clusterobservatory.eu/ 
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 
The European Innovation Scoreboard is available at http://www.proinno-europe.eu/ 
index.cfm?fuseaction=page.display&topicID=5&parentID=51 
See Chesbrough (2003).  
See Etzkowitz & Leydesdorff (2000). 

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appear  to  be  higher  than  in  non-clustered  locations.57  This  type  of  “cross-pollination”  of 
ideas  and  innovation  has  been  recognised  as  one  of  the  main  drivers  of  the  success  of  the 
Silicon  Valley  model.58  Another  example  is  the  successful  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 competitive advantages for those firms participating 
in  them.  The  participation  of  firms  in  clusters  may  also  be  driven  by  the  sheer  need  to 
cooperate due to the increasing complexity of innovation nowadays. 

The  results  from  the  Innobarometer  2004  survey  which  only  interviewed  “innovative 
companies”  and  of  the  Innobarometer  2006  which  interviewed  innovative  “companies 
working in a cluster-like environment” 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 significantly 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  Union  enterprises  two  years  ago.  These  results  suggest  that 
innovation is indeed spurred by clusters. 

Figure 4: Comparison between clustered 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 
58 
59 
60 

See OECD study (2007). 
See Saxenian (1994). 
See Power and Lundmark (2004). 
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 

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were the average European innovative firms in 2004. This supports the view that clusters are 
encouraging knowledge sharing which may further stimulate innovation. 

Moreover,  cluster  firms  patent  and  trademark  their  innovations  more  often  than  other 
innovative companies. While 12% of the innovative companies applied for a patent in 2004, 
the proportion among innovative companies operating in clusters in 2006 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 trademark 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  that  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  belonging  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 innovation activities of firms. 
The link between clusters and innovation at regional level is more difficult to prove, due 
to the statistical problems discussed in the previous chapter which prevent sound correlation 
analysis. As a first approximation, it has been calculated how the number of patents produced 
within a specific region are correlated with the strengths of regional clusters 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”.  

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Figure 5 

Cluster strength and patenting level in European regions 

Region's 
patenting 
level

8

7

6

5

4

3

0

0.5

1

1.5

2

2.5

3

3.5

4

Region's cluster strength

R2 = 0.357

Source:  European Cluster Observatory. ISC/CSC cluster codes 1.0, dataset 20070613 

From Figure 5 it can be concluded that all EU regions without clusters (i.e. evenly spread out 
employment  across  all  sectors)  are  also  characterised  by  a  low  level  of  patent  activity. 
Reversely,  all  regions  with  many  strong  clusters  are  among  top  performers  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 suggests that the innovation performance 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 capital 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  listed  in  Figure  6)  are  among  the  top  third  most 

62 

63 

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. 
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 

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innovative regions (i.e. among the top 33 most innovative regions out of 203 for which data 
were available). This result suggests that a positive correlation may exist between the strength 
of regional cluster portfolios and regional innovation performance.  

Figure 6: European Regions by Cluster Portfolio Strength 

1 star

2 stars

3 stars

Region – RIS performance
Lombardia (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

0

10

20

30

40

50

Total number of stars

Source: European Cluster Observatory. ISC/CSC cluster codes 1.0, dataset 20070606 

However, a more systematic link between clusters and innovation performance is difficult to 
establish  as  the  “Regional  Innovation  Scoreboard”  does  not  yet  deliver  information  of 
sufficient detail and reliability, 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  are  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 relatively 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. 

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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 countries in Europe and show that the organisation of innovation 
is  spatially  concentrated  across  regions  for  all  of  the  23  investigated  manufacturing  sectors 
and  that  its  extent  and  strength  increases  over  time.66  This  study  also  suggests  that 
institutional and geographical proximity are two 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 biotechnology industry (Allansdottir et al., 2001), for example, shows 
that  a  relatively  small  number  of  local  clusters  have  a  large  majority  of  European 
biotechnology firms, public research organisations, and patenting. The top 20 regions that are 
mainly  located  in  a  few  countries  account  for  nearly  70%  of  the  biotechnology  patents 
invented in Europe between 1987 and 1996. 

2.2. 

Clusters and specialisation 

The  cluster  mapping  analysis  of  European  clusters  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  suggesting  different  specialisation  patterns  in  Europe. 
About one fifth (21%) of these employees are employed in regions that are more than twice as 
specialised in a particular cluster category as the average region.  

There is an even bigger divergence in the geographic 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 specialised 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 education as sectors with much larger absolute 
employment numbers are much more dispersed across Europe.  

65 
66 

67 

68 

For an overview, see for instance Moreno et al. (2006), pp. 1236-1238. 
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 sectors (23 manufacturing sectors), which considers 175 
regions of 17 countries in Europe over two periods, 1994-1996 and 199-2001.  
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 
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 

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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  category  in  which  Europe  shows  clear  regional 
specialisation. Automotive clusters – including cars, buses and truck 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 value chain strategies of manufacturers 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 stars, while there an additional 8 regional clusters 
assigned 1 star out of a total of 259 regions. 

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A  comparison  made  by  the  European  Cluster  Observatory  on  the  differences  of  cluster 
strength  between  Europe  and  the  US  using  a  comparable  cluster  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  cluster  categories  analysed,  32  are  more 
geographically concentrated in the U.S. compared to Europe. This suggests that the degree of 
specialisation in Europe is less strong than in the US. 

Figure 8: Regional concentration of European clusters compared to the US 

10

1

Transportation 
& Logistics

US 
concen-
tration

Heavy 
Construction

0.1

Tobacco

Aerospace

Furniture

Footwear

Forest

Oil & Gas

Leather

Financial 
Services

Business 
Services

0.01

0.01

0.1

1

EU concentration

10

Source:  European Cluster Observatory. ISC/CSC cluster codes 1.0, dataset 20070613 70 

Overall, the data analysed by the European 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 and industry perspective.71 European regions 
tend to have a smaller share of employment in strong clusters, i.e. regional clusters in which a 
region is more than twice as specialised as the 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 

71 

The measurement of concentration uses a standard measures to asses disproportionality in distributions 
that takes into account how employment is distributed within every region. 
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. 

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26 

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United States. For the median region, the gap is even larger and about a third. While the most 
specialised  European  regions  even  have  a  slightly  higher  employment  share  than  their  U.S. 
peers, the differences get larger among the less specialised regions where Europe lags behind.  

Figure 9: Employment share of strong clusters (LQ>2) across regions 

European Regions
European Regions

U.S. Regions
U.S. Regions

Most specialised region:
Most specialised region:

Average region:
Average region:

Median region: 
Median region: 

Least specialised region:
Least specialised region:

74%
74%

21%
21%

18%
18%

0%
0%

Most specialised region:
Most specialised region:

Average region: 
Average region: 

Median region: 
Median region: 

Least specialised region:
Least specialised region:

70%
70%

28%
28%

27%
27%

0%
0%

Source: European Cluster Observatory (2007). 

This leads to the question of why these differences 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 between 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  cluster  effects  as  a  driver  of  location  choices. 
Observed patterns of geographic activity in Europe are thus likely to provide a mix of cluster 
and  legacy  effects,  providing  less  accurate  information  on  interactions  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 competition 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  strongest,  if  the  location 
choices  of  companies  are  not  biased  by  barriers  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  effects  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  Entrepreneurship  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 Americans would like to become their own boss, only 
45% of the Europeans have this wish. Europe’s problem in terms of entrepreneurial attitude is 
mainly attributed to the fear of business failure, bankruptcy and the uncertainty 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 the 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 

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2.3. 

Clusters and economic performance 

It  can  be  reasonably  assumed  that  clusters  are  among  the  most  relevant  microeconomic 
factors that influence the levels of prosperity of a region. Clusters and regional specialisation 
are empirically associated with higher levels of prosperity. The European Cluster Observatory 
and  other  cluster  mapping  efforts  –  such  as  the  profiling  of  specialisation  patterns  across 
cluster  categories  (groups  of  industries  that  empirically  co-locate)  in  regional  economies  in 
Europe,  North  America,  and  a  few  other  countries  –  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  employment  in  industries  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) 

GDP per Capita (PPP adjusted), 2004 

70,000 €

60,000 €

50,000 €

40,000 €

30,000 €

20,000 €

10,000 €

y = 83342x2 - 16467x + 22886
R2 = 0.3941

0%

10%

20%

30%

40%

50%

60%

70%

80%

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  extent  to  which  a  region  is  more 
specialised in an industry compared to the geographical area in question. 

The  role  of  clusters  in  explaining  economic  performance  of  regions  has  been  largely 
confirmed by other studies, although many are case specific and large scale empirical reviews 
are extremely rare. Porter‘s (2003) study of US clusters, for instance, shows that US regions 
that have a high proportion of their total workforce located in “strong” clusters enjoy a higher 

73 

Strong clusters are defined by a share of employees in clusters with a location quotient larger than 2.  

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level  of  economic  development  in  the  form  of  average  wages  and  employment  growth  in 
addition to the  earlier  mentioned  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 region is the greater the potential for higher 
wages. 

A new study by Wennberg & Lindqvist (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 found strong empirical evidence that being located 
within a cluster has positive effects 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 the national average.  

While it can be assumed that clusters come with higher innovativeness, more employment and 
economic growth especially in the 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  visible,  on  average,  in  local 
clusters  that  exist  for  more  than  50  years.  Importantly,  the  study  highlights  that  over  time 
“old”  clusters  seem  to  still  have  a  positive  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  contexts  and  challenges.  Altogether,  there  is 
nevertheless strong evidence that a cluster-based regional economy generates better economic 
results.  

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78 

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. 
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 employees in the specific cluster of three percent on 
average. 
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 technologies, medical equipment, and pharmaceuticals and 
biotech industries. The study is available at http:swoba.hhs.se/hastba/abs/hastba2008_003.htm  
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 policy (promoting firm formation through spin –offs 
or incubators) with a focus on clusters. 
See Isaksen & Hauge (2002). 

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3. 

CLUSTER POLICIES IN EUROPE: CONCEPTS AND MAIN CHARACTERISTICS 

In recent years a large number of policy initiatives were launched and implemented in Europe 
aiming  at  fostering  existing  clusters  or  creating  favourable  conditions  for  the  formation  of 
new ones. Such efforts may be labelled 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 with the ERAWATCH80 tool. 
Almost  all  EU  Member  States  have  now  cluster-specific  measures  or  cluster  programmes 
developed at national and/or regional level, suggesting that they are a key element of national 
and regional strategies in support of innovation. 

This  chapter  describes  the  concept  of  cluster  policies  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  developed  at  Community  level  to  complement  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  detail,  it  is  not  the  purpose  of  this  chapter  to 
evaluate them or to present and assess policy options for better cluster policies. 

3.1. 

Concept and rational of cluster policies in Europe 

As  explained  in  Chapter  1,  cluster  policy  can  be  understood  as  a  wider  set  of  specific 
government  policy  interventions  aiming  at  strengthening  existing  clusters  or  facilitating  the 
emergence  of  new  ones.  Cluster  polices  may  take  different  forms  and  follow  different 
ambitions,  ranging  from  framework  policies  setting  general  political  objectives  to  specific 
cluster  programmes  defining  specific  measures,  allocating  funding  and  organisational 
responsibilities, and setting specific rules for participation in the programme. 

Cluster policies are motivated by different considerations. Examples of successful clusters 
such  as  Silicon  Valley  have  raised  the  political  interest  in  clusters  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  cooperative  approach  (“triple  helix”)  which  favours 
innovation and helps enterprises to better face global competition.81 Cluster policies are often 
driven by the objective to stimulate growth and innovation by addressing proven or assumed 
market failures82 that may prevent knowledge and technology spill-overs to take place, such 
as coordination failures83, information asymmetries84 and path dependency85.  

79 

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81 
82 
83 

84 

More information about the INNO-Policy TrendChart is available at http://www.proinno-europe.eu/ 
index.cfm?fuseaction=page.display&topicID=52&parentID=52 
More information about ERAWATCH is available at http://cordis.europa.eu/erawatch 
See Etzkowitz & Leydesdorff (2000). 
See Oxera (2006). 
Coordination failures may arise because individual actors in the cluster do not consider the spillovers 
they create for others (such as public returns), which can cause an under-provision of activities or 
investments. 
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 interactive dialogue and communication between them. 

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The  cluster  approach  offers  policy  makers  the  opportunity  to  better  streamline  different 
policies  towards  the  objective  of  stimulating  growth  and  innovation,  by  using  synergies 
between  them  and  engaging  in  a  dialogue  with  other  stakeholders  on  how  to  best  remove 
obstacles and barriers for better economic 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  bringing  different  policies  together  and  using 
synergies between them. 

While there are certainly examples of good practice in cluster policy, it should be noted that 
there cannot be a blue print for successful cluster policies or a one-size-fits-all model as the 
specific  industrial  and  systemic  economic  strengths  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 existing strengths 
and mobilising the necessary commitment from all innovation stakeholders to move into the 
right  direction.  The  main  risk  related  to  this  approach  is  that  these  strategies  may  not  take 
sufficiently into account the comparative advantage of their region and country in relation to 
the competitive conditions of other areas. In other words, there remains a risk that strategies 
are too inward looking and 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  policies”  directed  towards  creating  a  favourable  microeconomic 
business environment for growth and innovation that indirectly also stimulate the emergence 
and dynamics of clusters. A second category comprises “traditional framework policies”, such 
as industry and SMEs policies, research and innovation policies, and regional policy that often 
use the cluster approach to increase the efficiency of a specific instrument.86 A third category 
consists of “development policies” aiming at creating, mobilising or strengthening a particular 
cluster  category  resulting  specific  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 Cluster 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 many countries while maturing slowly in others.88 

85 

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87 

88 

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. 
See OECD (2007). 
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 
A forthcoming article by Landabaso & Rosenfeld on “Public Policies for Industrial Districts and 
Clusters” also concludes that the development of cluster initiatives is still quite recent in the majority of 

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As it may take 10-15 years before the full impact of cluster policies and programmes may be 
seen it is therefore still too early to expect a serious assessment of their economic impact. 

This  survey  of  the  European  Cluster  Observatory  also  gives  an  overview  of  the  main 
characteristics of the national and regional cluster programmes. Concerning the national 
level, the survey studied a total 69 national cluster programmes within 26 of the 31 countries 
investigated. As for policy focus, almost half of the national cluster programmes are classified 
as related to either industrial and enterprise policy and almost half are related to the science 
and  technology.  Almost  every  national  cluster  programme  defines  private  business  as  their 
target group, followed by research and development institutions. A particular focus on SMEs 
has  been  identified  in  31  out  of  the  69  national  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  cluster  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  institutions.  The  strategic  orientations  of  the 
programme  were  based  on  the  results  of  a  cluster  mapping  and  a  government  sponsored  dialogue 
among different regional stakeholders. Following this public/private dialogue, the government selected 
12 cluster initiatives with an overall annual spending ranging from EUR 2 to 2.4 million per year over 
the  last  few  years.  The  selected  areas  include  traditional  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  different  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 cluster 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  focus  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 research institutions (52 programmes), educational 
institutions  (45  programmes)  and  public  authorities  (43  programmes).  Based  on  a  holistic 
perspective, this proves that it is common to have several target groups per programme. The 
average number of target groups per programme is three. In terms of support, 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 lessons learned (successes and failures) are effectively 
shared among regions. 
See OECD (2007). 

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programmes,  while  EU  Cohesion  Policy  is  supporting  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  scientific  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  Development  Fund  Regulation  for  the  period  2007-2013 
includes  explicit  support  to  business  networks,  public-private  partnerships  and  clusters.90 
Moreover,  the  Community  Strategy  Guidelines  on  Cohesion91,  in  line  with  the  Lisbon 
Strategy, recommends several explicit cluster-related actions under the priority of improving 
knowledge  and  innovation  for  growth.92  In  this  context,  approximately  86  billion  €  of 
Cohesion Policy funds are allocated to innovation in the EU-27, for the period 2007-2013 of 
which considerable amounts will support cluster 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 Oulu 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 Forum 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 environment for mobile technologies. Octopus also provides 
education in mobile technology related fields. Funded by the Structural Funds in 2002–2004, Octopus 
has  partnered  with  Nokia  and  some  60  other  companies,  the  City  of  Oulu  and  Higher  Education 
Institutions of the region. 

In 2005, the volume of R&D expenditure in the Oulu 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 (incl. 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 

91 

92 

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). 
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 
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”; “making regional RTD innovation and education supply 
more efficient and accessible to firms, in particular 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 particular SMEs, to increase competitiveness and to 
internationalise, in particular by seizing the opportunities created by the internal market” adding that 
“[b]usiness services should prioritise the exploitation of synergies (for 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 professional and commercial services”. 

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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 firms and other organisations (such as universities) 
were contacted during the launch phase of this initiative 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 association of packaging companies operating mainly in the 
Královehradecký  region,  which  is  the  centre  of  the  packaging  industry  in  the  Czech  Republic.  The 
ERDF  co-financed  Clusters  Measure  was  seen  as  an  opportunity  to  speed  up  and  broaden  co-
operation, and the OMNIPACK cluster project was amongst the first to seek support for this process.  

Cambridge high-tech Cluster: Cohesion Policy support is far more than just subsidies93 

The Cambridge Cluster is one of the world's leading 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 facilitated 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  role  in  the  management  of  the  cluster  since  the 
1990s, which is an important activity for cluster growth. 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 Centre’s contribution to the 
emergence of the cluster. These regional Centres are, in poor regions, supported by regional Cohesion 
Policy  funds.  Their  European  umbrella  organisation,  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  confers  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  spontaneously  without  a  specific  policy  support,  the 
role of the public sector in supporting 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 environment agree that public authorities have a 
fundamental or important role to play to support 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  national  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  recognised  provision  of  support  instruments  with 
companies’  expectations  for  improvement  in  support  activities  (see  Figure  11).  Cluster 
companies report that they are currently provided most assistance from public authorities in 
form of traditional support instruments such as by channelling and publishing information as 

93 

94 
95 

See the report on “'Regional Research Intensive Clusters and Science Parks” (Saublens et al., 2008) 
published by the European Commission in the framework of the Regions of Knowledge initiative. 
For more information about St. John’s Innovation Centre see http://www.stjohns.co.uk 
The 2006 Innobarometer on Clusters (European Commission, 2006e) is available at 
http://www.proinno-europe.eu/admin/uploaded_documents/FL187_Innobarometer_2006.pdf 

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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  desire  improvement  are  support 
activities for facilitating administrative procedures (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  perceived  gaps  between  the  current  provision  and 
desired  better  support  activities  concern  tax  reductions,  the  facilitation  of  administrative 
procedures  and  support  for  trans-national  cooperation.  Concerning  the  latter,  65%  of  the 
interviewed  cluster  firms  responded  that  public  authorities  should  improve  the  support  to 
increase their trans-national relation with other clusters or geographical areas; while only one 
third of them reported that they are currently 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 measuring cluster policy impact involve the creation 
of  new  firms,  growth  in  output,  profits  and  exports,  the  number  of  innovations  produced  in 
cooperation,  etc.  However,  such  detailed  statistical  regional  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 policies 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 attention 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  and  programmes  should  also  be  assessed  more 
frequently against the expectations of the stakeholders as there seem to be some gaps between 
their expectations and the support mechanisms offered by cluster policies and programmes. 

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3.2. 

The  role  of  trans-national  cooperation  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  value  chains,  trans-national  cluster  cooperation  appears  in  a 
different  light.  Increasingly,  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  mistakes,  and  being  aware  of  new  challenges  and 
policy  trends  in  this  area,  helps  to  advance  faster  and  readjust  cluster  policies  towards  new 
emerging  needs  and  challenges.  However,  a  pre-condition  for  this  type  of  cluster  policy 
cooperation is that the participants share the same interests. Without 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  practical  tools  and  solutions  for 
pertinent  problems  related  to  cluster  policies  and  programmes,  such  as  the  search  for  better 
methodologies  to  map  clusters,  to  identify  emerging  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 together with other policy makers, taking advantage 
of  the  experience  that  some  partners  may  have  on  particular  areas.  Such  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  efforts  to  build  strong 
clusters or cluster cooperation in their region, by sharing specialised research infrastructures 
and  testing  facilities  and  facilitate  knowledge  transfer  for  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  cooperation  may  be  limited  to 
cross-border cooperation in regions with a strong common cultural identity, such as the Baltic 
Sea Region or Central Europe. 

Although upstream policy cooperation for cluster development is a powerful tool, it seems to 
be a rather difficult task for many policy authorities due the presence of different types of 
market and cultural barriers. The difference across 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 private actors which is often missing. 

In addition, developing and sustaining trans-national cooperation at policy level requires that 
governments devote human and financial resources to international projects, whereas there are 
strong political pressures keeping them for implementing own priorities and plans. Matching 

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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 cluster policy programmes are 
designed  and  implemented  in  each  country  and  at  which  level.  In  many  cases,  managing 
cluster programmes may involve in the same country 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  conclude  that  although  trans-national  cluster 
cooperation would be highly beneficial it is unlikely to appear spontaneously very often. Most 
often,  such  cooperation  remains  limited  to  partners  of  the  same  region  even  if  the  common 
policy  problems  at  stake  could  be  better  solved  by  wider  cooperation.  This  suggests  that 
Community  instruments  facilitating  trans-national  cluster  policy  cooperation  would 
offer strong benefits. Whereas they exist to support mutual policy learning and, to a lesser 
degree, knowledge sharing in the design of better cluster policies, 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 results and future challenges  

initiatives 

European 
in  support  of  clusters  should  be,  as  much  as  possible, 
complementary to national and regional efforts, in order to better exploit synergies and to 
support country-specific priorities. On the other hand, regions and Member States should take 
maximum advantage of the financial instruments 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 Observation is a major contribution 
for promoting mutual policy learning at EU level 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 strengths of clusters  to the underlying factors, cluster mapping 
helps identifying regional strengths and provides 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  cooperation.  Examples  include  the  Regional 
Innovation  Strategies  (RIS)96  scheme  that,  since  1994,  have  helped  many  catching-up  EU 
regions  to  upgrade  their  innovation  strategies,  the  Innovative  Actions  Programme  2000-
200697 co-financed by the European Regional Development Fund (ERDF) as well as the new 
Regions  for  Economic  Change98  initiative.  This  new  initiative  launched  under  Cohesion 

96 

97 

98 

More information on the RIS scheme is available at http://www.innovating-
regions.org/network/regionalstrat/index.cfm 
More information on the Regional Programmes of Innovative Actions is available at 
http://ec.europa.eu/regional_policy/innovation/intro_en.htm 
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 

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Policy,  aims  to  leverage  the  experience  of  advanced  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  integrated  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-cluster activities that gather several regions is a 
relevant part of this. 

In  support  of  mutual  policy  learning,  a  first  generation  of  pilot  projects  and  networking 
activities  was  launched  under  the  PAXIS  initiative  aiming  at  the  identification  of  “good 
practice” examples and developing tool boxes for establishing cluster initiatives. As a result, a 
great number of successful practices have been identified and transferred to other regions in 
key areas, such as start-up development, innovation financing, technology transfer, incubation 
and entrepreneurship. The “PAXIS Manual for Innovation Policy makers and practitioners”, 
which describes these practices in detail, can also provide useful guidance for the set-up and 
management of clusters.100 

However,  most  of  these  pilot  projects  are  facilitating  mainly  networking  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 implement 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 that such information is rapidly outdated and 
difficult to replicate. A fundamental challenge is that the design of regional cluster policies is 
motivated by diverse interests 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  policy,  these  aspects  of  policy 
learning  could  be  specifically  taken  into  account  in  pursuit  of  “better  innovation  policy 
governance”.  Existing  guidance  material  for  the  set-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  Europe101  (IRE)  network  may  play  an 
important  role  to  further  disseminate  this  information  material  as  well  as  the  European 
Commission (2007d) publication “Innovative 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 guidance as to how innovation and experimentation 
should be continued in the programming period 2007-13.102 

Facilitating  interregional  cooperation  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 

100 
101 
102 

103 

The “European Territorial Cooperation” replaces and reinforces the former Community Initiative 
INTERREG. 
More information on PAXIS is available at http://cordis.europa.eu/paxis/src/home.htm 
More information on the IRE network is available at http://www.innovating-regions.org/index.cfm 
The European Commission Working Document (2007e) is available at 
http://ec.europa.eu/regional_policy/innovation/2007/guide_innovation_en.pdf 
See European Commission (2006d) Communication COM(2006) 675 final of 8 November 2006. 

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to enhance its contribution to growth and jobs. This aligns with the modernisation objectives 
of the Lisbon Agenda and keeps the focus on the need for innovation. Cluster relevant themes 
included in this initiative include “bringing innovation quickly to the market”, “improving the 
capacity for research and innovation”, “improving monitoring of environment and security by 
and for the regions”, “improving knowledge and 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  networks  linking  regional  and  local  actors 
throughout Europe. This know-how provides a valuable 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  partner  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 development 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 trans-national cooperation between 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 developing joint actions in the area of technology transfer, technology 
take up, and internationalisation, specifically for SMEs involved in clusters.  

These  four  INNO-Nets  established  together  the  European  Cluster  Alliance107  which  is  an 
open platform for policy discussion 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  horizontal  issues  such  as  cluster  management, 
cluster support funding, and exploitation of cluster mapping results for policy purposes. The 
Competitiveness Council of December 2006 highlighted that the specific innovation support 
initiatives  under  Europe  INNOVA  and  PRO  INNO  Europe  are  important  elements  of  the 
broad-based  innovation  strategy  and  explicitly  welcomed  the  Commission’s  initiative  of  the 
regional 
European  Cluster  Alliance  at  stimulating  practical  cooperation  between 

104 
105 
106 

107 

More information on the CLOE network is available at http://www.clusterforum.org 
More information on ERA-Net is available at http://cordis.europa.eu/coordination/era-net.htm 
More information on the INNO-Nets is available at http://www.proinno-europe.eu/ 
index.cfm?fuseaction=page.display&topicID=55&parentID=55 
More information about the European Cluster Alliance is available at http://www.proinno-europe.eu/ 
index.cfm?fuseaction=page.display&topicID=223&parentID=50 

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governments.108  This  shows  that  Member  States  have  realised  the  importance  of  the  trans-
national dimension of clusters and the complementary role that the European Commission can 
play in this regards.  

Many  of  the  activities  carried  out  by  the  currently  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  strategies  for  future  innovation  and  cluster 
policy.110  Existing  innovation  and  cluster  programmes  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  incubation  policies.  It  has  designed  a  number  of 
concrete  pilot  cross-border  cooperation  initiatives  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 partners representing national and 
regional innovation public bodies aims to identify areas of common interest between partner 
organisations  and  develop  joint  policy  actions  to  support  trans-national  cooperation 
between innovative SMEs involved in clusters. As a practical example, this project launched 
a  first  joint  call  for  proposals  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 exchanging technical knowledge, developing research 
projects, and supporting technology transfer activities and mobility staff among them at EU 
level.  A  series  of  information  days  are  organised  in  each  participant  country  in  order  to 
encourage participation of SMEs.  

These  examples  demonstrate  that  there  is  indeed  scope  for  and  interest  in  trans-national 
cluster  cooperation  at  policy  level.  However,  as  confirmed  by  feedback  from  participants, 
generally, this type of cooperation would not take place without financial support from 
the  Commission.  Only  through  European  funding  the  more  advanced  administrations  are 

108 

109 

110 

111 

112 

113 

See Council of the European Union (2006) Council Conclusions on a broad-based innovation strategy: 
Strategic priorities for innovation 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 
More information on the CEE-Cluster Network is available at http://www.proinno-
europe.eu/index.cfm?fuseaction=page.display&topicID=66&parentID=55 
The press release on the CEE-Cluster Agreement can be found at http://www.proinno-europe.eu/ 
extranet/NWEV/uploaded_documents/Press-
release_CEE_Cluster_Agreement_Signing_Event_071128_Brussels.pdf 
As an example, the ten operative cluster initiatives and networks in Upper Austria involve some 3,000 
companies with a special focus on SMEs. 
More information about the CLUNET project is available at http://www.proinno-europe.eu/ 
index.cfm?fuseaction=page.display&topicID=67&parentID=55 
Further information about the INNET project and the call for proposals is available at 
http://www.proinno-europe.eu/index.cfm?fuseaction=page.display&topicID=71&parentID=71# 

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ready  to  share  expertise  with  those  who  started  more  recently  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 prepare 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  respect  to  the  removal  of  practical  legal 
constraints  for  closer  cluster  policy  cooperation  among  different  Member  States  and 
regions.  This  would  require  the  development  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 coordination. 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. 

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4. 

CLUSTER INITIATIVES AND CLUSTER ORGANISATIONS IN EUROPE 

As  a  result  of  the  cluster  policies  and  programmes  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  staff  support.  Managing  clusters  is 
emerging  as  a  new  profession  aiming  at  providing  specific  support  to  firms  organised  in 
clusters.  

This chapter describes the main role cluster organisations play in support of cluster initiatives. 
Special  emphasis  is  paid  to  the  facilitation  of  trans-national  cooperation  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  organised  efforts  to  enhance  the  competitiveness  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 initiatives around the world.116 
40% of the respondents reported that their cluster initiative was initiated in 2001 or later and 
72% in 1999 or later, which reflects the increased importance of cluster initiatives as a tool for 
economic development in recent years.  

IT,  medical  devices,  production 

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 foreign owned companies, small companies or those 
as regarded as competitors. Cluster initiatives are more common in some specific sectors such 
as 
technology,  communication  equipments,  bio-
pharmaceuticals  and  automotive.  Most  often,  cluster  initiatives  are  set-up  as  “public-
private-partnerships” by industry and government, while if solely 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  support  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  replaced  over  the  lifetime  of  cluster  initiatives  by 
increased  membership  fees,  sponsoring  and  other  fees  for  conference  participation,  training 

115 

116 

See Sölvell, Lindqvist & Ketels (2003). Their Cluster Initiative Greenbook is available at 
http://www.cluster-research.org/greenbook.htm . Alternatively, Andersson et al. (2004) define cluster 
initiatives as “conscious actions taken by various actors to create or strengthen clusters”. 
See Ketels, Lindqvist & Sölvell (2006). Information and reports on the results of the Global Cluster 
Initiative Survey (GCIS) are available at: http://www.cluster-research.org/gcis.htm 

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and  coaching  which  altogether  cover  most  of  the  costs  of  successful  cluster  initiatives.  For 
instance,  the  long  experience  of  11  cluster  initiatives  established  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 innovation clusters is not exclusive and clusters 
may benefit from other types of allowed State Aid. 

The organisations that manage cluster initiatives may take a variety of forms, including non-
profit associations, universities and public agencies. While they mostly emerge from industry-
led  projects  or  from  government-led  programmes,  it  is  nevertheless  often  a  single 
“clusterpreneur”  who  takes  the  leadership  to  initiate  the  establishment  of  a  cluster 
organisation which later on is most often taken over by a professional cluster manager.120 

Cluster organisations are considered as new and highly efficient forms of innovation support 
providers  that  provide  or  channel  specialised  and  customised  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  Agencies 
than  500  cluster 
organisations in Europe.  

identified  more 

(EURADA) 

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.  Particularly,  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 districts”, “systemes productifs locaux” or competence networks.  
In  the  most  advanced  economies  cluster  organisations  tend  to  focus  more  on  innovation 
services and knowledge creation, while in countries still in transition more emphasis is laid on 
supply chain development, export promotion or simple networking and training. In the new 
Member  States  the  cluster  concept  is  relatively  new,  nevertheless  there  are  significant 
resources allocated to support cluster development from the Structural Funds in the financial 
period  of  2007-2013.  In  these  countries  there  are  therefore  a  growing  number  of  cluster 

117 

118 

119 

120 
121 

Information about Clusterland Upper Austria are available at 
http://www.clusterland.at/index_ENG_HTML.php 
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.VINNOVA.se/innovationandclusters. 
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. 
See Andersson et al. (2004). 
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/en/oj/ 2006/c_323/c_32320061230en00010026.pdf 

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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  that  manages  the  cluster 
initiative –, an office and a website. Cluster organisation often have a wide set of activities, 
ranging  from  information  provision,  commercial  cooperation  and  innovation  support, 
enhancing  the  business  environment,  human  resources  upgrading,  business  development,  to 
cluster  expansion.  Correspondingly,  the  activities  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 performed by cluster initiatives 

Source: Ketels; Lindquist & Sölvell (2006) Cluster Initiatives in Developing and Transition Economies, 1st ed., 
May 2006, Center for Strategy and Competitiveness, Stockholm.123 

Note:  Respondent  countries  were  categorised  in  Developing  (Dev.),  Transition  (Trans.)  and  Advanced  (Adv.) 
and the reply scale ranged from 1 for ‘disagree 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  supporting  partner  searches  and  identification 
and contact building. This concerns the networking and linking of competencies within and 
across  different  sectors  of  the  specific  cluster  as  well  as  fostering  trans-national  relations  to 
other clusters. They support the sharing of information between its members and with other 

122 
123 

See Isaksen & Hauge (2002). 
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 

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44 

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partners  through  organising  seminars,  workshops  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 organisation often organise training programmes in order to support the 
upgrading of human resources. This includes identifying key qualifications and professional 
competences  that  are  necessary  for  cluster  growth,  organising  workforce  training  and 
management  education.  Furthermore,  it  can  liaise  with  other  specialised  training  and 
education providers in lobbying for an adaption of their curricula. Often specialised advisory, 
consultancy  and  support  services  are  offered  by  cluster  organisation  that  may  concern 
assistance in financing and project acquisition, issues of intellectual property rights (IPR) and 
other support for the internationalisation of cluster firms. 

Other activities of cluster organising may include the facilitation of commercial cooperation 
among its members that concern joint purchasing, logistics, production, export promotion and 
sales.  The  latter  may  include  developing  a  common  branding  of  the  region  and  products  as 
part of the marketing of the cluster to attract talent 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 management of the cluster’s open-access facilities that 
can include laboratories, testing centres, training centres and other infrastructure facilities.  

The type of support activities and structures offered by cluster organisation 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.  According  to  a  report  by  NetBioCluE  (2008)  – 
which is a cluster network project for the biotechnology sector124 under the Europe INNOVA 
initiative  –,  mature  clusters 
the  number  of 
to  have  more 
incubators/science  parks  than  clusters  in  the  initial  stage  of  development.  This  report  also 
suggests that there is a large need for facilities and networking during the growth and mature 
stage  of  biotechnology  clusters,  while  innovation  support  appears  to  the  most  important 
activities during the initial stage of a cluster. 

than  four 

times 

tend 

Overall,  it  appears  that  most  cluster  initiatives  organised  by  cluster  organisations  have  a 
positive impact on the cluster they serve. The Cluster Initiative Greenbook presents the results 
of  the  2003  Global  Cluster  Initiative  Survey  of  over  250  cluster  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 respondents 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 success of a cluster initiatives and 
cluster organisations. The Cluster Initiative Greenbook groups them around their setting, the 
objectives  and  their  process.  Important  aspects  for  the  setting  of  cluster  initiatives  and 
organisation  are  a  strong  business  environment,  trust  in  government,  strong  regional 
government, cluster strength, and being part of a broader strategy. The objectives should have 
a  broad  range  and  be  selected  on  the  basis  of  the  cluster’s  specific  needs.  Furthermore,  a 
successful  process  requires  a  cluster  manager  with  cluster  insight,  an  organisation  and 

124 

125 

More information on the NetBioCluE project is available at http://www.europe-innova.org/ 
index.jsp?type=page&lg=en&classificationId=5019&classificationName=NetBioClue&cid=5105 
See Sölvell, Lindqvist & Ketels (2003).  

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communication  structure  of  high  quality,  an  office  presence,  a  significant  budget,  a  clear 
strategy and measurable goals. 

Following  this  study,  those  cluster  initiatives  selected  through  a  competition  process  for 
receiving  government  financing  perform  significantly  better  in  terms  of  increasing 
international  competitiveness than “top down” initiatives. There was  a  less  visible  effect  on 
performance  when  governments  picked  the  companies  to  be  involved  in  clusters  or  when 
cluster initiatives involved members beyond 1 hour’s travel distance. Cluster initiatives only 
limited to domestic companies performed worse which 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  cluster  managers  play  a  very  important  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,  maintain  the  balance  of  achieving  short  vs.  long-
term benefits and focus on concrete action plans 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  basis.  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  cluster  growth  and  transformation  is  dependent  on 
constantly looking outside the cluster initiative 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  more  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  regional  or  national  stakeholders  supporting  cluster  initiatives  to 
learn  about  factors  underlying  the  success  of  cluster  organisations  and  professional  cluster 
management. A number of initiatives exist already that organise cluster training programmes, 
for  example,  so  called  cluster  academies  by  Clusterland  Upper  Austria127,  the  Barcelona 
Clusters  Summer  School128  or  PROCluster®  facilitator  workshops  organised  in  Finland129. 
There  is  a  further  tendency  in  recognising  cluster  excellence  in  aspects  of  cluster  formation 
and  development  through  the  formulation  and  recognition  of  best  practice  as  in  the  case  of 
“Spitzencluster” in Germany.130  

initiatives  not 

Cluster 
specialisation  and 
professionalisation  may  risk  not  to  seize  the  full  potential  of  clusters  and  falling  behind  in 
international competition. However, the awareness for the need to build-up strong cluster 

following 

towards 

further 

trend 

this 

126 
127 

128 

129 

130 

See Andersson et al. (2004). 
More information about the Cluster Academy Upper Austria is available at: http://www.proinno-
europe.eu/index.cfm?fuseaction=nwev.NewsReader&news=2131&lang=EN&topicID=90&parentID=0 
More information about the Barcelona Cluster Summer School is available at : 
http://www.barcelonagse.eu/Barcelona_Clusters_Summer_School.html 
More information on these workshops can be found at 
http://www.prodemic.fi/english/index.php?group=00000019&mag_nr=8 
More information on the Spitzencluster competition is available at 
http://www.spitzencluster.de/de/468.php 

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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  initiatives  and  organisations. 
Secondly, the quality of cluster management is difficult to asses, especially for firms that are 
or  may  wish  to  become  members  of  cluster  initiatives  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 evaluate 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 transparency in terms of 
quality standards of cluster initiatives and cluster organisations 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 cluster’s market position 
worldwide.  Cluster  managers  are  responsible  for  facilitating  transnational  cooperation 
between  the  innovation  actors  of  different  clusters  resulting  from  the  fact  that  linkages 
between  companies,  respectively  between  research  institutions  and  enterprises  coming  from 
different  countries  are  rising  in  importance.  Altogether,  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  initiatives  have  become  more  active  in  establishing 
international links and strategic alliances with other cluster initiatives in order to better 
serve  the  needs  of  their  clients.  As  businesses  internationalise  their  activities  so  must  the 
organisations  and  institutions  supporting  them.  Traditionally,  the  focus  of  many  cluster 
initiatives  has  been  on  internal  activities  related  to  improving  the  cluster-specific  business 
environment, strengthening the linkages between cluster participants, and upgrading company 
operations  and  strategies.  More  and  more,  the  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  within  clusters  and  internationally  between 
clusters  can  help  increasing  the  internationalisation  of  cluster  firms  and  their  access  to 
technological  excellence  which  is  not  available  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 organisations. Furthermore, firms need to remain open 
to new ideas and cluster organisation play an important role so that cluster firms have access 
to  global  networks.  In  this  respect,  transnational  cooperation  can  be  regarded  as  an 
appropriate approach to combat the risk of cluster sclerosis from 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 Innobarometer (see Figure 9 
above) have shown there is huge gap between the current provision of support activities and 

131 

See Grabher (1993). 

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the desired level of support for trans-national cooperation. Furthermore, the results of a survey 
among 91 cluster initiatives across Europe about their internationalisation activities conducted 
by the German Competence Networks (Kompetenznetze, 2007)132 also showed that only 10% 
of  cluster  initiatives  or  networks  actually  have  concrete  plans  for  internationalisation  (see 
Figure  13  below),  which  suggests  that  the  current  support  offered  in  this  respect  is 
insufficient.  

In order to respond to this challenge of better trans-national cooperation, some Member States 
such  as  Germany  and  France  already  actively  promote  the  internationalisation  of  clusters. 
However, this approach is far from being generally followed in Europe. At operational level, 
trans-national cooperation may take many different forms. The most common approach is 
to establish contacts to other networks and clusters. This may comprise the facilitation of the 
exchange of knowledge and experiences that can take place in the framework of cluster visits 
and  staff  exchanges.  A  step  further,  partnerships  on  the  joint  provision  of  business  support 
services and on access to cluster facilities such as research and testing centres, and the joint 
organisation of matchmaking between companies or educational programs open to members 
of  the  clusters  may  be  organised.  These  concrete  forms  of  cluster  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 

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Figure 13: Internationalisation strategies of networks 

Source: Kompetenznetze (2007).133  

technological  change  has  decreased 

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 
transportation  and 
communication.  These  two  trends  have  created  more  opportunities  for  breaking  up  value 
chains across locations and increased the competitive 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 revenues, it is now also important to create and sustain competitive 
advantages  through  international  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  costs  of 

The particular set of conditions in Europe is creating additional pressure to develop linkages 
between clusters. National borders continue to separate markets and limit the effectiveness 
of  competition  across  regions.  Some  of  these  barriers  are  related  to  the  historical  legacy  of 
policy barriers that still affects behaviour even though the policies have been changes. Others 
are the result of different regulatory regimes that 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.  

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to  compete  with  identical  strategies  in  different  European  countries.  Finally,  there  are  also 
different languages and cultures across countries that 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 been 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 movement of goods, services, capital, people and ideas 
are instrumental to ensure that the potential for excellent European clusters is not hampered 
by the existence of national borders. Notwithstanding these efforts, it needs to be recognised 
that  European  clusters  cannot  rely  on  the  natural  forces  of  agglomeration  alone  to  attract 
capabilities  and  assets  to  the  same  extent  as  US  clusters  can.  However,  European  clusters 
can  compensate  some  of  these  comparative  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 same level of cluster dynamics that are possible 
when clusters evolve in a market without barriers, 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  technologies  not  available  within  the  own  cluster 
and the exchange of information and experience 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 privately appropriated. Multinational companies play an important role in 
this  internationalisation  process.  Through  subsidiaries  in  different  clusters  they  create 
linkages that are external to any cluster but internal 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 some 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  internalised  by  the  companies  that  create  them 
because of positive externalities that exist in clusters. In addition, there are many barriers that 
inhibit  the  mobility  of  companies’  activities  and  the  natural  emergence  of  cluster  linkages 
between  them.  These  barriers  can  comprise  four  main  categories  that  include  behavioral 
barriers  (such  as  strategies  and  operational  practices),  policy-induced  barriers  (such  as 
different regulatory regimes), natural barriers (such as language and cultural difference), and 
informational barriers (of various kinds that limit 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 time (see Figure 14). It is interesting to notice 
that language barriers and geographic distance appear to be rather minor factors that hinder a 
possible international cooperation.  

134 

These four answers received each between around 14 and 18% while other answers got less than 10% . 
two answers per 89 networks were possible.  

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Figure 14: Main barriers hindering a possible co-operation between networks 

Source: Kompetenznetze (2007).135 

Although  clusters,  cluster  firms  and  cluster  organisations  compete  against  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 
information  exchange  between  them  and  supports 
internationalisation  strategies.  This  is  particularly  useful  for  SMEs  that  do  not  have  the 
necessary human and financial resources to conduct expensive market analyses and surveys. 
Cluster cooperation facilitates mutual learning 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.  

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4.3. 

Community  support  for  transnational  cluster  cooperation  between  cluster 
initiatives and cluster organisations: First results and future challenges 

Several  complementary  Community  measures  exist  to  strengthen  cluster  initiatives  more 
efficiently  and  to  connect  clusters  better  through  trans-national  cluster  cooperation  and 
exchange. Whereas the main responsibility for cluster policy design remains with regional and 
national  policies,  the  European  Commission  contributes  to  strengthening  trans-national 
cooperation between cluster initiatives 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 initiatives and bundling efforts, in particular 
across  borders.  The  regional  cooperation  for  cluster  development  can  be  supported  through 
the “European Territorial Cooperation”136 Objective of the new Cohesion Policy, aiming 
at  an  integrated  territorial  development,  interregional  co-operation  and  exchange  of  good 
practice.  Its  antecedent,  the  INTERREG  III  community  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  the  four  participating  partners.  As  a  Regional 
Framework  Operation,  which  funded  diverse  initiatives,  REGINS  involved  cooperation  that 
led  to  the  establishment  of  28  subprojects.  Most  of  the  REGINS  subprojects  promoted 
research  and  development  or  new  technologies,  and  all  of  them  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 authorities 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 testing facilities of 
cluster initiatives. As a first European Grouping of Territorial Cooperation, the Eurometropole 
Lille-Kortrijk-Tournai  has  been  created  within  the  cooperation  of  the  local  and  regional 
authorities,  who  have  already  launched  several  joint  initiatives.  In  this  respect  further 
cooperation agreements have been signed for Euroregion Alpes-Mediterranée, Galicia Norte 
Portugal, Euroregion Alpe-Adria and Euroregion 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  developed  under  the  EU’s  Integrated  Maritime 
Policy140,  where  the  Commission  announced  its  intention  to  foster  networking  amongst 

136 

137 
138 

139 

140 

The “European Territorial Cooperation” replaces and reinforces the former Community Initiative 
INTERREG. 
More information on REGIONS is available at http://www.regins.org/en/index.php 
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 
For more information on these cases, see 
http://www.cor.europa.eu/pages/EventTemplate.aspx?view=folder&id=acdb7fab-512b-418b-af15-
2abb12659e77&sm=acdb7fab-512b-418b-af15-2abb12659e77 
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. 

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maritime clusters. Building on this, the Commission Staff 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 challenges 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 framework of cooperation actions 
fro the development of new products, processes and technologies in the agriculture, food and 
forestry sectors. The EAFRD also provides support for business networking in rural areas.143 

The  “Regions  of  Knowledge”144  initiative,  which  is  now  part  of  the  7th  Framework 
Programme on Research and Development, facilitates networking between regional research-
driven clusters composed of regional authorities, enterprises and research entities at European 
level. The initiative has the objective to strengthen the research potential and competitiveness 
of EU regions through the definition of research-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  preliminary  exercises  such  as  foresight  analyses, 
technological audits, benchmarking and mapping studies and then exchange of best practice 
and  formulation  of  policy  recommendations.  For  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 regional actors in order to facilitate their common 
work  in  the  field  of  research  and  innovation.  Another  example  is  the  Food  Innovations 
Network Europe (FINE), which seems to have huge potential.146 Its action programme unites 

141 

142 

143 

144 

145 
146 

at 

on 

1406 

available 

application 

17.10.2007, 

SEC(2007) 
from 
http://ec.europa.eu/transparency/regdoc/recherche.cfm?CL=en 
Europe’s maritime sector is a world 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 European maritime clusters produce in total an estimated vale added of 
€  111  billion  and  providing  about  5  million  jobs  acro ss  Europe  related  to  sea  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 expertise 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.  
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/LexUriServ.do?uri=OJ:L:2005:277:0001:0040:EN:PDF 
More information about the Regions of Knowledge initiative is available at 
http://cordis.europa.eu/fp7/capacities/regions-knowledge_en.html 
More information about ERRIN is available at http://www.errin.eu 
The example is listed in the accompanying Commission Staff Working Document entitled “RTD, 
Innovation, Cohesion and Rural Development Policies reinforced Synergies” to the Communication 

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eight  different  regions  with  agrifood  clusters  in  their  efforts  to  join  forces  to  increase 
innovation  by  enhancing  exchange  and  collaboration  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-called  Aho  Report  on  “Creating  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 that “[t]his can be facilitated by opening 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  networks  in  traditional 
and high-tech sectors with a learning platform that enabled them to identify, 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/Optics  and  technical  textiles)  with  a  particular  focus  on 
strengthening their regional innovation systems and on supporting trans-national cooperation 
with a view to further accelerate the development of their clusters in a Europe context.  

The  aim  of  this  action  is  helping  organisations  that  manage  clusters  such  as  cluster 
organisation  to  cooperate  with  other  cluster-related  organisations  across  Europe  to 
exchange  experience,  explore  opportunities  for  strategic  cooperation  between  them  and  to 
develop  joint  strategic  partnerships  to  join  forces.  This  is  increasingly important  in  order  to 
complement  expertises,  and  develop  joint  actions  and  business  support  strategies  such  as 
sharing  research  and  testing  facilities.  This  can  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  establishment  of  good  working 
relationships  and  mutual  understanding  amongst  the  partners  has  been  instrumental  for  the 
success of the knowledge-sharing process set in motion by the cluster networks. Once this had 
been  achieved,  the  networks  have  openly  shared  their  experiences  and  practices  on  cluster 
management. The collaborative learning effect was reinforced by the sectoral focus applied to 
Europe  INNOVA  helping  the  networks  to  find  common  issues  and  thereby  facilitating  the 
comparison of sector-specific approaches.  

The cluster-related organisations indicated that the key motivations of collaborating across 
borders  have  been  to  increase  international  visibility  by  building  the  “critical  mass”  of  a 
cluster; to gain economies of scale; to access and open new markets; to seek complementary 

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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. 
More information about the Europe INNOVA initiative is available 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 
See European Commission (2006f). The Aho report is available at http://ec.europa.eu/invest-in-
research/action/2006_ahogroup_en.htm 

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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 found in increased knowledge and information in order to improve 
competences of cluster management.  

The  cluster  network  for  technical  textiles  INNOTEX  for  example,  organised  learning  and 
cooperation in the form of a cross-cluster best practice platform. This enhanced collaboration 
has  contributed  to  joint  development  and  increased  competitiveness  within  each  of  the 
participating textiles clusters. The project was, 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  several  experimental  tools  for  the  agro-biotech 
sector, such as mentoring schemes and pilot actions 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 support emerging clusters in the energy sector. 
In NetBioCluE, the cluster managers shared their long-term visions 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 evaluation, technology transfer and the marketing of 
the  cluster  organisations  and  their  services  to  SMEs.  At  the  same  time,  their  meetings 
represented  an  excellent  opportunity  for  relatively  new  cluster  managers  to  benchmark,  and 
adapt their procedures and 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  Hungarian  cluster  received  practical  advice  and 
support  in  structuring  and  managing  the  new  cluster  organisation.  It  was  involved  from  the 
beginning  in  international  cooperation.  Thanks  to  these  efforts,  the  cluster  has  received 
funding from the Hungarian government for the amount of 5.3 M€. 

The automotive cluster networks have also helped to establish new cluster organisations. The 
BeLCAR consortium works with a motorcycle cluster in Catalunya (Spain), the new cluster 
initiative  “Automotive  South-West”  in  Stuttgart  as  well  as  a  growing  automotive  cluster  in 
Romania.  In  the  Polish  region  Wielkopolska,  the  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  international  support  for  cluster  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 convinced key players in Wielkopolska to promote 
regional  clustering.  The  Estonian  partner  of  the  INNOTEX  network  of  textile  clusters, 
approached well-established clusters in Leicestershire (UK) and Aragon (Spain) for advice on 
modernising its cluster strategy with regard to technical textiles. The new strategy emphasises 
technology  transfer  to  bring  the  evolving  polymer  composite  cluster  in  Estonia  up  to  speed 
with  the  latest  developments  and  knowledge  in  protective  clothing,  electronic  textiles  and 
composites.  

Most  of 
the  Europe  INNOVA  cluster  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  photonics  worldwide.  The  network  analysed  the 
activities of 79 clusters and concluded from the analysis that their maturity was in most cases 

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depending  on  the  successful  management  of  a  cluster  organisation  by  a  dedicated  cluster 
manager. 

In the mClusters network, 22 leading mobile regions have used the methodologies, tools and 
experience from both the involved cluster organisations 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  identify  a  huge  market  potential  and 
avenues for developing European lead markets in the field. The network has made substantial 
efforts to bring technologies such as GALILEO and EGNOS closer 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 business 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-sectoral  cooperation.  This 
process  supports  the  cluster  companies  in  their  development  and  helps  to  create  a  stronger 
analytical  basis  for  cooperation.  The  BeLCAR  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 companies, 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  participants  of  which  300  participants  attended  the  matchmaking 
events; BeLCAR organised 6 matchmaking events with 220 participants and 600 face-to-face 
meetings;  CENCE  organised  24  cooperation  workshops  and  10  study  visits  15  joint 
innovation  projects  launched;  OMNI-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 

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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, mentoring 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  finance  projects  INVESat  and  FinanceSpace  to 
establish  the  ENCADRE  network,  joined  by  15  satellite  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 with cross-border regions, which will expand 
further.  

The TCAS and BeLCAR projects in the automotive sector constituted together with projects 
receiving  Structural  Funds149  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 leverage the results of the project into business 
results and continues technology transfer while OMNINET continues with the organisation of 
match-making  events  and  sharing  information  on  specialised  topics.  The  ABC  Network, 
AFIBIO  and  NetBioCluE  organise  their  final  event  together  and  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  transfer  and  internationalisation  of  small  and 
medium-sized enterprises. Based on this broad experience it can be concluded that European 
support to trans-national cluster cooperation has 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 initiatives in Europe and 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 challenge still to be addressed 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 necessarily 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  interest  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 general 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. 

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as the application of the EFQM Excellence Model150 of the European Foundation for Quality 
Management to cluster management. This would 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  the  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 Schools” 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 
151 

For more information on the EFQM see http://www.efqm.org 
More information about the IMQ Net project is available at http://www.proinno-
europe.eu/index.cfm?fuseaction=page.display&topicID=70&parentID=70 

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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  Europe,  the  different  policies  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  triangle  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 support of clusters. The common element should be the promotion of cluster 
excellence at all levels.  

5.1. 

The needs and scope for better coordination 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 barriers 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 geographical specialisation and the creation of stronger clusters in 
Europe.  

Many  framework  conditions  that  are  important  for  clusters  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 and 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 stimulate mutual policy learning and trans-national 
cluster policy cooperation, such through the European Cluster Alliance which was specifically 
welcomed by the Council.155 

The  Structural  Funds,  the  7th  Framework  Programme  and  the  Competitiveness  and 
Innovation Framework Programme (CIP) are the three major Community instruments dealing 
with the issue of Europe to become a knowledge based economy and each of them includes a 

152 

153 

154 

155 

More information about the 7th Framework Programme is available at 
http://cordis.europa.eu/fp7/home_en.html 
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 
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. 
See Council of the European Union (2006) Council Conclusions on a broad-based innovation strategy: 
Strategic priorities for innovation 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 

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number  of  activities  in  support  of  clusters  from  different  perspectives.  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  research  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  Member  States  such  as  networking 
activities  between  higher  education  institutions,  research  and  technological  centres  and 
enterprises.  Under  the  new  “European  Territorial  Cooperation”  Programme156,  clusters, 
innovation and SME policies are one of the important priorities. 

The decision of the European Parliament and of the Council concerning the 7th Framework 
Programme  of  the  European  Community  for  research,  technological  development  and 
demonstration  activities  (2007-2013)  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 clusters 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 clusters associating universities, research centres, 
enterprises and regional authorities.157  

Finally,  clusters  and  cluster  organisations  play  an  important  role  as  part  of  Community 
policies in support of entrepreneurship and innovation. As explicitly stated in the legal base 
for  the  Competitiveness  and  Innovation  Programme  (CIP)158,  actions  in  relation  to 
innovation  may  include  “fostering  sector-specific  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  tested  by  cluster  organisations.159  Therefore,  the  role  of  the 
Commission  in  support  of  clusters  also  includes  specific  measures  that  aim  at  promoting 
innovation in general and SME participation in clusters in particular. 

Synergy among these European instruments in support of clusters must be ensured in order to 
utilize  them  more  efficiently.  The Community Strategic Guidelines for 2007-2013 clearly 
state that “synergy between Cohesion Policy, the FP7 and the CIP is vital so that research and 
cohesion  policies  reinforce  each  other  at  regional  level  by  providing  national  and  regional 
development  strategies  showing  how  this  will  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 

157 

158 
159 

The “European Territorial Cooperation” Programme replaces and reinforces the former Community 
Initiative INTERREG. 
More information on the “Regions of Knowledge” initiative is available at 
http://cordis.europa.eu/fp7/capacities/regions-knowledge_en.html 
More information on the CIP is available at http://ec.europa.eu/cip/index_en.htm 
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 

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of  interregional  networking  actions  among  INTERREG156,  Europe  INNOVA,  INNO-Nets, 
ERA-NETs and Regions of Knowledge 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 and 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  “Practical  Guide  to  EU 
funding  opportunities  for  research,  development  and  innovation”.161  In  the  future,  a  cross 
cutting identification of existing interregional networks under the mentioned initiatives would 
certainly help to avoid unnecessary 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  fragmented  nature  of  the  measures  devoted  to 
cluster promotion in the  EU,  and considers that these should be  grouped  under one specific 
line of action to promote clusters and support inter-cluster cooperation.”162 Whereas a single, 
structured  approach  towards  clusters  does  not  appear  to  be  realistic,  taking  into  account 
the  different  objectives,  legal  basis  and  administrative  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  approach  in  support  of  clusters,  the  Commission’s 
services would have to be fully committed to work closely together and to share experience 
from different Community initiatives, thus responding 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 cluster policies and initiatives, ranging from cluster analysis and 
policy learning to the development and implementation of cluster initiatives (see Figure 15). 

Based on the rationale of the different Community instruments it seems to be adjacent that the 
main activities in support of policy learning and development would be streamlined under 
the PRO INNO Europe initiative, which offers with the European Cluster Alliance163 the most 
inclusive platform for better streamlining regional, national and European cluster initiatives in 
support  of  cluster  excellence  in  Europe.  This  would  require  to  involve  all  relevant 
Commission’s services in the discussions of the European Cluster Alliance and to liaise the 
different regional cluster networks aiming at mutual policy learning to this work.  

160 

161 

162 

163 

The study (Reid et al., 2007) is available at: 
http://www.europarl.europa.eu/comparl/itre/2007_fp7_study_en.pdf  
The draft “Practical Guide to EU funding opportunities 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 available at http://cordis.europa.eu/fp7/consultation_en.html 
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. 
More information about the European Cluster Alliance, and how to join it, is available at 
http://www.proinno-europe.eu/index.cfm?fuseaction=page.display&topicID=223&parentID=0  

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Figure 15: Overview of current and planned EU initiatives in support of clusters 

Analysis & 
Strategy

Policy learning
& cooperation

Cluster 
development

Trans-national 
cooperation

Cluster 
support services

INNO-Policy TrendChart

European Cluster Alliance

Regions for Economic Change

Regions of knowledge (FP7)

Europe INNOVA (CIP)

EU Initiative for Excellence  (CIP)

Enterprise Europe Network

European Cluster Observatory

Cohesion Policy (Structural Funds)

European Cluster Policy Group

The Structural Funds are used by the regions as the main Community instrument to strengthen 
regional  cluster  development  and  innovation  capacity.  These  regional  efforts  are 
complemented by the Regions of Knowledge initiative that focuses on encouraging stronger 
links between research and industry, thus bridging between regional research capacities and 
innovation  by  learning  from  each  other  and  stimulating  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 primarily on the joint development of new or 
better  tools  used  by  cluster  organisations  in  support  of  innovative  SMEs,  thus  enhancing 
better  business  support  services  for  clusters  in  Europe.  Whereas  the  Regions  of  Knowledge 
initiative  aims  mainly  at  supporting  regional  capacity  building,  the  new  Europe  INNOVA 
initiative  will  facilitate  practical  cooperation  between  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  Community  instruments  in  support  of  cluster 
development, trans-national cooperation and cluster management is needed to achieve better 
synergies  between  research,  regional  development  and  innovation.  Stronger  bridges  among 
the  different  instruments  must  be  created  to  better  exploit  synergies  and  strengthen  the 
outcomes of the projects funded under the different programmes.  

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5.2. 

New challenges in support of clusters to be addressed at European level 

Many  Community  initiatives  contribute  to  the  development  of  clusters  in  Europe,  based  on 
strategic  objectives  that  have  been  politically  agreed  with  Member  States  as  part  of  the 
different  funding  mechanisms,  such  as  the  Structural  Funds,  FP7  and  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  prioritisation  and  a  concentration  of  the  different  support  actions 
towards the need of creating more world-class clusters in the EU in order to foster regional 
specialisation  and  to  avoid  an  unnecessary  proliferation  of  cluster  initiatives.  For  this,  no 
adequate dialogue structures or discussion fora exist yet.  

The Action: The establishment of a European Cluster Policy Group, composed of outstanding 
independent  experts  from  policy  authorities,  business  and  academia,  would  help  to  identify 
the  best  approach  to  support  excellence  of  clusters  in  the  EU.  It  could  identify  the  barriers 
hampering specialisation and propose concrete recommendations for further action, including 
on a better streamlining of Community 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 with Member States and regions. In order to be 
effective,  the  Group  would  have  to  liaise  as  closely  as  possible  with  the  European  Cluster 
Observatory and the European Cluster Alliance. 

The expected impact: The Group would facilitate the policy discussions on how to support 
the emergence of more world-class  clusters in the EU, building upon existing strengths and 
ensuring better consistency between the different regional and national policies in support of 
clusters.  This  would  help  reorienting  cluster  policies  towards  a  more  efficient  allocation  of 
resources,  resulting  in  higher  regional  specialisation  and  world-class  excellence  of  clusters. 
The Group would act as a “trailblazer” for better cluster policies at all levels, by contributing 
to  a  better  understanding  of  the  success  factors  and  difficulties  in  the  emergence  of  world-
class clusters in the EU. The expected work would increase the awareness about the benefits 
of  excellence  in  innovation  and  of  upstream  cooperation  at  policy  level  between  Member 
States  in  view  to  strengthening  the  linkages  between  existing  cluster  initiatives  and 
promoting, wherever opportune, the joint design of new cluster initiatives. This would allow 
avoiding costly duplication and reducing the fragmentation of cluster 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 and highly sensitive task which 

164 

Information from the European Cluster Observatory is available at http://www.clusterobservatory.eu/  

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requires  the  continuous  search  for  better  methodologies  and  statistics.  More  and  better 
indicators  need to be  used for  cluster mapping  to  allow  a  more  comprehensive  and  realistic 
picture.  It  is  still  unsatisfactory  that  the  current  cluster  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 integrate other indicators and to better analyse the 
impact  of  clusters  on  competitiveness  and  innovation.  Furthermore,  more  and  better 
information about cluster initiatives and cluster organisations and their activities is needed to 
facilitate trans-national cooperation.  

The  Action:  The  European  Cluster  Observatory  should  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 which takes the above outlined challenges on board. 
New  proposals  would  be  expected  to  build  upon  the  existing  cluster  mapping  methodology 
and  further  improve  it  by  adding  additional  indicators.  Besides  statistical  information  about 
clusters  in  Europe  and  information  on  cluster  case  studies,  the  Observatory  should  also 
provide more practical information on cluster organisations, their activities, 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  international  markets,  business  partners,  research  and 
financing.  

The expected impact: The expected impact of this action would be an improved analysis of 
clusters and cluster initiatives. This would contribute 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  policies  if  further  indicators  would  be  integrated 
and  made  available  European-wide  which  would  also  facilitate  benchmarking.  In  addition, 
innovative  SMEs  and  investors  would  benefit  from  such  data  when  searching  for  enhanced 
cluster participation. 

Challenge Nº 3: More and better practical cooperation at policy level between Member States 

The problem: Strengthening upstream cooperation at policy level 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  established  at  EU  level  by  the  European  Cluster 
Alliance which would address these issues pertinent for practical cooperation across borders. 
Strategic discussions on how to better use synergies between different cluster policies would 
remain rather theoretical as long as no practical solutions for closer trans-national cooperation 
exist yet.  

The action: The proposed action would aim at pursuing 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  excellence  of  clusters  in  Europe  would.  The 

165 

More information about the European Cluster Alliance, and how to join it, is available at 
http://www.proinno-europe.eu/index.cfm?fuseaction=page.display&topicID=223&parentID=0  

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European Cluster Alliance – currently involving more than 70 ministries, regional authorities 
and  innovation  agencies  across  Europe  –  would  offer  a  suitable  platform  to  develop  new 
strategies  for  the  internationalisation  of  clusters  and  removing  practical  barriers  for  trans-
national  cooperation  between  clusters.  It  would  be  expected  that  under  this  umbrella  public 
authorities responsible for cluster policies and initiatives from different Member States would 
closely  collaborate,  aiming  at  developing  and  testing  practical  solutions  for  more  efficient 
cluster policies in the EU.  

The expected action: The work under the new phase of the European Cluster Alliance would 
result in better cluster policies and more efficient ways to promote excellence of  clusters in 
Europe. It would help creating a common understanding of “state of the art” cluster policies 
and create closer links and partnerships  between different Member  States  which would also 
prepare the grounds for a more strategic discussion 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 European Cluster Alliance with cluster networks 
supported  by  other  Community  initiatives,  such  as  with  the  Regions  of  Knowledge 
initiative166 and the Regions for Economic Change initiative.167 

Challenge  Nº  4:  To  better  integrate  innovative  SMEs  into  clusters  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 cluster initiatives and cluster organisations lack 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 networks have delivered some very good results to facilitate the 
participation  of  SMEs  in  clusters  and  to  foster  their  cooperation  with  research  and  other 
enterprises.168  This  successful  approach  could  now  be  used  to  better  exploit  the  innovation 
potential  of  SMEs  for  the  further  implementation  of  the  Lead  Market  Initiative,  by 
specifically  encouraging  the  development  of  new  or  better  business  support  mechanism 
delivered by cluster organisations active in the lead market areas.  

The  Action:  The  current  cluster  networks  under  Europe  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  develop  and  offer  specific  support  for  SMEs  to 
innovate  faster  and  to  ease  their  access  to  international  markets,  business  partners,  research 
and  financing.  Cluster  organisations  would  work  together  at  a  practical  level  to  jointly 
develop new or better tools and to implement joint initiatives in support of innovative SME, 
especially  concerning  their  internationalisation  strategies  by  improving  access  to  markets, 
capital and knowledge.  

166 

167 

168 

More information on the Regions of Knowledge imitative is available at 
http://cordis.europa.eu/fp7/capacities/regions-knowledge_en.html 
More information on the Regions for Economic Change is available at 
http://ec.europa.eu/regional_policy/cooperation/interregional/ecochange/index_en.cfm 
More information about the Europe INNOVA Cluster Networks at http://www.europe-innova.org/index 
.jsp?type=page&lg=en&classificationId=4961&classificationName=Cluster%20Networks&cid=5104 

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The  expected  impact:  Such  a  “European  Innovation  Platform  for  Cluster”  would  facilitate 
the participation of SMEs in clusters and offer 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  the  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 cluster organisations are also a modern instrument for 
regional policy and economic development. Since cluster organisations play an important role 
in providing specialised services to enterprises, the level of their quality and professionalism 
matters.  Whereas  there  is  clearly  a  general  tendency  towards  more  professionalism  and 
excellence  of  cluster  organisations  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  improve  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 Excellence of Cluster Organisations” to create a European label 
for  cluster  management  excellence,  which  would  promote  high  quality  standards  of  cluster 
organisations  and  would  support  the  further  professionalisation  of  cluster  management  in 
Europe. This action requires that a neutral organisation exists which can offer the certification 
of such a label. Therefore, incentives need to be provided for the establishment of a neutral 
organisation  representing  cluster  organisations  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  respect  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,  and  management  by  processes  or 
partnership  development.  The  European  label  for  cluster  management  excellence  should  be 
complemented by a training scheme for cluster organisations in order to raise their quality and 
efficiency;  furthermore  it  is  proposed  to  establish  a  club  of  cluster  managers  for  mutual 
learning and inspiration. 

The  expected  impact:  The  proposed  actions  would  result  in  a  more  efficient  use  of  public 
resources and stronger orientation and professionalisation of cluster organisations in Europe. 
Respectively,  they  would  contribute  to  higher  quality  of  cluster  management  and  better 
services  provided  to  SMEs.  The  actions  are  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 recognition 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 efforts of the Member States and their regions in 
support  of  clusters  in  an  ideal  manner,  enhancing  their  impact  and  adding  a  European 
dimension  to  them.  To  be  effective,  the  different  Community  instruments  need  to  be  better 
aligned towards those implemented at national and regional level. Together, this would create 
a more efficient European framework for cluster support.  

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(1st ed.), Stockholm: Ivory Tower. 

Technopolis  (2008)  Analysing  ERDF  co-financed  innovative  projects,  draft  Final  report 
prepared  in  the  framework  of  the  European  Commission  study  on  the  ERDF  co-financed 
innovative projects and comparative analysis, April 2008. 

Wennberg,  K.  &  Lindqvist,  G.  (2008)  “How  do  entrepreneurs  in  clusters  contribute  to 
economic growth?”, SSE/EFI Working Paper Series in Business Administration, No 2008:3, 
Stockholm: Stockholm School of Economics.  

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GLOSSARY 

1. Definitions related to clusters 

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, 
services, resources, suppliers 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  mean  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  strengthen  cluster  development,  which  can, 
but  must  not  necessarily  be,  based  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 dedicated individual persons that manage 
a cluster initiative (←). 

Cluster  mapping  is  the  indirect  identification  of  clusters  (←)  in  a  given  geographical  area 
based  on  statistical  methods  measuring  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  cluster’s  premises,  facilities  and  activities.173  They  are 

169 

170 

171 

172 

173 

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 
See the “2006 Innobarometer on cluster’s role in facilitating innovation in Europe”, available at 
http://www.proinno-europe.eu/admin/uploaded_documents/FL187_Innobarometer_2006.pdf 
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”. 
See,  for  instance,  the  results  and  methodology  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.  
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 

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considered as new and highly efficient forms of innovation support providers that provide or 
channel  specialised  and  customised  business  support  services,  especially  to  SMEs.  Cluster 
organisations are often also in charge of managing cluster initiatives (←). 

Cluster  policy  refers  to  a  wider  set  of  specific  government  policy  interventions  aiming  at 
strengthening existing clusters (←) or facilitating the emergence of new ones. Cluster polices 
may take different forms and follow different objectives, such as industrial and SME policy or 
research  and  innovation  policy.  Cluster  policies  range  from  framework  policies  setting 
general  political  objectives  to  defining  measures,  allocating  funding  and  organisational 
responsibilities, and setting specific rules for participation in programmes. Cluster policies are 
in  most  cases  supported  and  implemented  by  specific  cluster  programmes  (←)  of 
governments or cluster initiatives (←).  

Cluster policy-maker means the policy-makers responsible 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  new  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  measures  and/or  cluster 
initiatives  (←),  a  public  body  or  organisation  in  charge  of  its  implementation  and  specific 
rules for participation in programmes.  

Cluster sectors – or cluster categories – are those so-called traded cluster industries, which 
have a choice as to where to locate and serve 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 services – that mainly serve local 
markets because they are neither viewed as being exposed to direct competition across regions 
nor as tending to “cluster together”.  

2. Description of current and planned EU initiatives in support of clusters 

The  Cohesion  policy  comprises  the  financial  instruments  of  the  European  Regional 
Development Fund (ERDF), the European Social 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  programming  period  (2007-2013)  to  research  and 
innovation. Under the “Convergence” Objective (Article 4 of the ERDF Regulation), Member 
States  are  allowed  to  use  ERDF  funds  to  co-finance  R&D,  innovation  and  entrepreneurship 

174 

175 

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/en/oj/ 2006/c_323/c_32320061230en00010026.pdf 
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, Agricultural, 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.  
For  more 
regional_policy/sources/docoffic/official/regulation/pdf/2007/publications/guide2007_en.pdf 

the  Cohesion  policy  2007-2013 

information 

about 

see  http://ec.europa.eu/ 

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activities through public-private partnerships and clusters. Furthermore, under the “Regional 
competitiveness  and  employment”  objective  (Article  5),  ERDF  funds  can  be  used  to 
stimulating innovation and entrepreneurship in all sectors of the regional and local economy 
by supporting business networks and clusters. Trans-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  States  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 circumstances. The Guidelines explicitly 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  Network177  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  network  is  made  up  of  close  to  600  local  partner 
organisations  in  more  than  40  countries,  including  the  27  EU  member  states,  three  EU 
candidate  countries  (Croatia,  the  former  Yugoslav  Republic  of  Macedonia  and  Turkey), 
members of the European Economic Area (EEA) and 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  developed  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  research  policies,  structures,  programmes 
and organisations.178 The aim of this service is to support 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 2006, 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  cooperation  have  already  been  implemented,  ranging  from  cluster 
visiting schemes and matchmaking events to partnership agreements for the creation of open 
sectoral  business  platforms  of  clusters.  The  next  generation  of  cluster  projects  under  the 

176 

177 

178 
179 

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 
More information about the Enterprise Europe Network can be found at: http://www.enterprise-europe-
network.ec.europa.eu/index_en.htm 
More information about ERAWATCH is available at http://cordis.europa.eu/erawatch/index.cfm 
More information about the Europe INNOVA initiative is available 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 

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Europe INNOVA initiative will focus on the creation of strategic partnerships between cluster 
organisations under a “European Innovation 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 under 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  internationalisation  of  innovative  SMES  by 
improving  access  to  markets,  capital  and  knowledge.  A  Call  for  Proposals  is  expected  for 
autumn  2008  with  an  estimated  budget  for  the  next  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  integrated  and  leveraged,  as  widely  as  possible, 
into the new Enterprise Europe Network (←). 

The  European  Cluster  Alliance  is  an  open  trans-national  cooperation  platform  for  cluster 
policy-makers established under the PRO INNO Europe initiative in 2006, bringing together 
more  than  70  public  partners  including  national  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  first  steps  for  fostering  practical  cluster  policy 
cooperation in Europe. In the new phase starting in 2009, the Alliance will particularly focus 
on developing better policies for stimulating 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  through  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  cluster  programmes.  It  was  presented  at  the 
European  Presidency  Conference  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 addition to the measuring and identification of regional clusters 
based on employment data, the European Cluster Observatory’s website further provides case 
studies of cluster policies and other information.184 It is the intention to further improve the 
website in 2009 towards a full-fledged information service on clusters and cluster initiatives 

180 
181 

182 

183 

184 

More information on the CIP is available at http://ec.europa.eu/cip/index_en.htm 
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 
More information about the European Cluster Alliance, and how to join it, is available at 
http://www.proinno-europe.eu/index.cfm?fuseaction=page.display&topicID=223&parentID=0  
The European Cluster Memorandum is available at http://www.proinno-europe.eu/ 
NWEV/uploaded_documents/European_Cluster_Memorandum.pdf 
See the website of the European Cluster Observatory at http://www.clusterobservatory.eu 

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by providing additional information about cluster organisations, their activities, services and 
their  environment  as  well  as  offering  match-making  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 the objective to advice the European Commission 
on  strategic  objectives  to  better  facilitate  the  emergence  of  more  world-class  clusters  in 
Europe. The Group will consist of 20 outstanding independent experts from policy authorities, 
business and academia that will be selected through 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 recommendations for preparing future 
policy actions. The Group is expected to be fully 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 authorities (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 sharing access to research and testing facilities.  

The European Pilot Initiative for Excellence of Cluster Organisations is a new initiative to 
be  launched  under  the  Europe  INNOVA  initiative  with  the  objective  to  raise  the 
professionalism  of  cluster  organisations  (←)  in  Europe.  A  quality  standard  and  a  European 
label  for  excellent  cluster  organisations  will  be  developed  on  the  basis  of  the  EFQM 
Excellence Model  186 as well as cluster management training 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  Presidency  Conference  on  innovation  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 Declaration calling upon the European Commission to 
prepare  concerted  actions  to  further  support  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 will discuss the measures suggested by this 
Communication  as  well  as  their  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 

186 

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/docoffic/official/regulation/newregl0713_en.htm 
Detailed information about the EFQM model of the European Foundation For Quality Management can 
be found at: http://www.efqm.org/ 

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The INNO-Policy TrendChart provides a database, policy briefings 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  assessment  and  to  identify  examples  of 
good  practice,  thus  improving  the  basis  for  decision  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  good  practice  available  in  other  regions,  by 
integrating  ideas  developed  through  interregional  cooperation  (INTERREG  IVC)  and  urban 
development  network  (URBACT  II)  programmes  into  the  region’s  mainstream  Operational 
Programme for implementing Structural Funds. It aims to address some of the core issues that 
Europe  is  facing  by  the  identification  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 initiative can be used to assist Member States and regions in their 
efforts to further improve their innovation 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 development  of  strategic 
research  agendas  by  regional  public  authorities  and  other  stakeholders.  Particular  emphasis 
will  be  put  on  areas  with  a  clear  economic  development  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 Programme (FP7) with an allocated budget of 
126 million Euro for the period 2007-2013. Two Calls for proposals were launched in 2008 
with a budget of around 10 million Euro and another Call for proposals will be launched in 
2009 with an indicative budget of around 16 million Euro. 

187 

188 

189 

More  information  about  the  INNO-Policy  TrendChart  is  available  at  http://www.proinno-europe.eu/ 
index.cfm?fuseaction=page.display&topicID=52&parentID=52 
More information about this initiative can be found at: 
http://ec.europa.eu/regional_policy/cooperation/interregional/ecochange/index_en.cfm 
Further information about this initiative can be found at: http://cordis.europa.eu/fp7/capacities/regions-
knowledge_en.html 

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