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TCI 2015 Industry Clusters and Entrepreneurial Ecosystems: Competing Agendas or Synchronised Policy?

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By Allan O'Connor & Rowena Vnuk, presented at the 18th TCI Global Conference, Daegu, 2015.

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TCI 2015 Industry Clusters and Entrepreneurial Ecosystems: Competing Agendas or Synchronised Policy?

  1. 1. Industry Clusters and Entrepreneurial Ecosystems: Competing Agendas or Synchronised Policy? Allan O’Connor, University of Adelaide, Australia Rowena Vnuk, University of Adelaide, Australia Parallel Session 1.2 Analysis of Cluster Models and Cluster Ecosystems
  2. 2. The Starting point Clusters and entrepreneurial ecosystems Australian Cluster Observatory: www.clusterobservatory.com.au
  3. 3. Entrepreneurship, Commercialisation and Innovation Centre Cluster Definition • “Clusters are geographical concentrations of interconnected companies, specialized suppliers, service providers, firms in related industries, and associated institutions … in particular fields that compete but also cooperate” – Porter, M.E. (1998) “Clusters and the New Economics of Competition”. Harvard Business Review, Nov-Dec 1998. University of Adelaide 3
  4. 4. Entrepreneurship, Commercialisation and Innovation Centre Clusters: But why… • Clusters are important. They can increase innovation, productivity and competitiveness, and boost regional and national economic growth; • Clusters emerge spontaneously. Clusters can emerge only if and where there is a competitive advantage to begin with; • Cluster development feeds on start-ups and firms moving into the cluster. Therefore access to capital and a positive attitude to risk is essential; • Clusters grow because firms share and create knowledge and specialised labour; and because of the presence of a network of support services and a complex fabric of social relationships. University of Adelaide 4 Source: Advanced Institute of Management Research (2005?) ‘The Cluster Effect’
  5. 5. Entrepreneurship, Commercialisation and Innovation Centre The Adapted Diamond Model (Porter 1990) University of Adelaide 5 Firm strategy, structure and rivalry Related and supporting industries Factor & resource Conditions Demand ConditionsCluster processes ∑ increased innovation, productivity and competitiveness greater regional and national economic growth
  6. 6. Entrepreneurship, Commercialisation and Innovation Centre Entrepreneurial Ecosystem (EE) Definition • ‘a set of interconnected entrepreneurial actors (both potential and existing), entrepreneurial organisations (e.g. firms, venture capitalists, business angels, banks), institutions (universities, public sector agencies, financial bodies) and entrepreneurial processes (e.g. the business birth rate, numbers of high growth firms, levels of ‘blockbuster entrepreneurship’, number of serial entrepreneurs, degree of sell-out mentality within firms and levels of entrepreneurial ambition) which formally and informally coalesce to connect, mediate and govern the performance within the local entrepreneurial environment’ (Mason & Brown 2014) University of Adelaide 6
  7. 7. Entrepreneurship, Commercialisation and Innovation Centre EE: But why? • To improve socioeconomic performances – Greater employment – Better wealth distribution – Reduce cost of living – Higher living standards • To improve market efficiencies – Product/service distribution – Reduce transaction costs (supply and demand side) • To increase industry effectiveness – Benefits of co-location – Greater innovation and technology advances • To facilitate private investment in growth economies – More start-ups – Greater business capital investment University of Adelaide 7
  8. 8. Entrepreneurship, Commercialisation and Innovation Centre The EE model University of Adelaide 8 Industry Structures Factor Conditions (Institutional, Cultural, Social, Financial) Resource Conditions Demand Conditions Entrepreneurial processes ∑ increased innovation, productivity and competitiveness greater regional and national economic growth
  9. 9. Entrepreneurship, Commercialisation and Innovation Centre Common Dimensions of Assessment • Market and Demand Conditions (External) – E.g. Technology, Social & cultural, Economics, Environmental • Factor and Supply Conditions (Internal) – E.g. Technology, Human Capital, Finance, Environment, Infrastructure • Power and Control Dynamics – Dominant players, bottlenecks • Value Appropriation Dynamics – Number of participants, Commodity, Niche or Specialisation • Business level behaviours – Collaborative, Competitive, Networks, Knowledge Spill-over and Transfer • Temporal and Policy Dynamics University of Adelaide 9
  10. 10. Cluster and EE differences • Clusters – Emerge from established firm competitive advantage – Firms are embedded in industry dynamic – Firms seek to exploit common markets and resources – Policies are built around agglomerated firms – Networks built around firm level cultures, languages and histories converging from the past • EEs – Create positions of firm level competitive advantage – New firms seek to embed in industry dynamics – Firms seek to occupy market gaps and gather unique resources – Policies are centred upon atomistic start-up firms – Networks built around the individual and start-up cultures, languages and future opportunities diverging from the past University of Adelaide 10
  11. 11. Entrepreneurship, Commercialisation and Innovation Centre Integration University of Adelaide 11 Human Action (Leadership, social capital, networks and linkages) Factors & Resources (Physical resources, financial capital, labour and human capital, knowledge, R&D) Historical Structures (Culture, institutions, identity and image, competitive and collaborative behaviours) Specialisation (Cluster Initiatives) Diversity (Entrepreneurial Ecosystem) Strategic Innovation of Place Feedback Industry & Markets (Structure, power, Customer accessibility, diversity, wealth and competition)
  12. 12. Entrepreneurship, Commercialisation and Innovation Centre Thank you! Allan O'Connor & Rowena Vnuk Australian Cluster Observatory: www.clusterobservatory.com.au Entrepreneurship, Commercialisation and Innovation Centre University of Adelaide, AUSTRALIA 5005 Ph : +61 8 8313 0188 e-mail: allan.oconnor@adelaide.edu.au Web: http://www.ecic.adelaide.edu.au/

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