20th TCI Anniversary Commemorative Book: The past, present and future of clusters

20 Years of TCI
network/the
Past, Present
and Future of
Clusters

When the TCI Network was founded
two decades ago, it was a bold initiative
by a group of individuals from different
countries and organisations that shared
one common belief: that the cluster-based
approach towards economic development
and competitiveness emerging at the
time based on the work of Michael Porter
and others had huge potential, and was
something to be brought closer to a wider
group of practitioners. Two ideas played a
particularly strong role in their thinking:
* First, that the focus should be on
practice, i.e. on how to translate the
concept of clusters into real programs,
organisations, and impact on the ground.
* And second, that the network should
be organised on a global level, because
the concept had global relevance and
the experiences gained anywhere
around the world were valuable.
The fact that we are in 2017 coming
together in Bogota, Colombia, to celebrate
the 20th anniversary of the TCI Network is
a testament to the power of these ideas,
and to the dedication of our founders
and those that followed to develop the
organisation. The TCI Network is strong,
with a robust secretariat in Barcelona, with
a dedicated board of 14 individuals from all
parts of the network, and with local groupings
in Latin America, in Oceania, and in Asia, a
deep base in Europe, a growing presence in
North America, and important linkages into
Africa. We all have been lucky to benefit from
this willingness to come together and invest
in a common platform; we are particularly
indebted to the hosts of our annual
conferences that are showcased in this book.
The TCI Network has stayed true to
its founding ideas, but it has also seen
important changes over the years. In the
beginning the focus was on consolidating and
communicating the cluster approach to a wider
community, moving beyond the initial group
of practitioners. Over time, the main mission
of TCI became helping these practitioners
to refine and develop their cluster-based
activities, and to place cluster efforts into
the broader context of innovation and
competitiveness policies. Practically, this has
seen TCI move beyond the global conference
as an annual window into the world of clusters
and provide activities around evaluation,
peer reviews, mentoring, staff exchange,
disseminating of academic research, and
more. TCI has also become active in advocacy,
sharing the experience of its members with
Dear TCI friends,
20 years of TCI Network | the Past, Present and Future of Clusters 2

Christian Ketels
PresidentTCINetwork
Boardofdirectors
international organisations and policy makers.
New activities are being launched as members
identify areas of common interest. Partnerships
are developed with other networks working on
related issues. And the footprint of activities
around the globe is continuously deepening.
What will the future hold? This book tries to
explore some of the issues facing clusters,
cluster policies, and cluster initiatives. The
need for finding new avenues for enabling
sustainable growth is urgent as ever. Many
traditional approaches based on macroeconomic
management or economy-wide enhancements
of the business environment have proven to be
often insufficient. The interest in location- and
sector-/issue-specific initiatives is larger than
ever. But the pitfalls in moving from abstract new
ideas to effective implementation are manifold.
I am convinced that the TCI Network has a huge
contribution to make to these discussions in the
coming years. Our focus on practice is what is
critical to move towards real impact, and our
global scope is right for the economy that we
live in. The cluster framework remains a uniquely
powerful tool to understand location- and sector-
specific sources of competitiveness, and to
mount effective public-private action to enhance
performance. But to seize this opportunity we
cannot stand still. We will need to find new ways
Let the next
decades begin!
to engage our members and the broader group of
economic development professionals we are part
of, grounded in a more robust business model.
And we need to be a driver and part of the wider
efforts to develop the framework for cluster-based
economic development further, incorporating
new ideas and new realities of the global
economy. As a network, I am sure we can do this.
3

Dear cluster practitioners, policymakers,
researchers, and businesspeople,
Eventhough clusters,as geographic
agglomerations of specialisedindustries,have
existedfor centuries,thefocusonclusterpolicy
andpractice(through clusterinitiatives)is
much more recent.The pasttwodecadeshave
beenmarked by a growinginterestinterritorial
competitiveness and an increasedfocusonthe
part ofnations andregions in pursuingsustainable
andacceleratedeconomic growth. Modern
industrial policies and productivedevelopment
agendas,basedon clusterinitiatives andother
tools forthepromotion oflocaleconomic
development,have becomemainstream,asa
complement to moretraditionalapproaches
to competitiveness basedonhorizontal
agendas which aim atimprovingthebusiness
environmentfor all sectorsoftheeconomy.
Colombia is no stranger tothisglobal
phenomenon,andthrough its National
Competitiveness,Science,Technology,and
Innovation System,ithasrecentlydesignedand
implemented a setof policies,inparticular,a
NationalProductiveDevelopmentPolicythatseeks
to diversifyand upgrade itseconomy,asawayto
address its stagnating productivitychallenge.In
contrastto pastefforts,whichprivilegeda“top-
down”approach,thesenewpoliciesemphasisea
“bottom-up”one,throughwhichnotonlysectors
and/orstrategic areas areprioritisedatthelocal
level, butitis atthelocal levelwheremuchofthe
actionandagendasaretakingplace,undertakenby
localprivate,public,and research/academicactors.
Thischangeinparadigm,alongwithagrowing
globaltrendofimplementingclusterinitiatives to
catalyselocalandregionalcompetitiveness,has
resultedinamultiplicationofeffortsinvarious
regionsofthecountryinusingclustersasthe
main toolforimplementinglocalproductive
developmentagendas.Todate,theColombian
ClusterNetwork(RedClusterColombia)has
mappednearly90clusterinitiativesthroughout
thecountryinthelastfewyears.Thishas
madeColombiaaLatinAmericanleaderin
theimplementation ofsuch agendas.
Inparticular,Bogotahasbeenworkingontwo
setsofcomplementaryinitiatives,inwhichthe
BogotáChamberofCommercehasaleading
rolethat provides thebasis foroneofthemost
interestingandprofoundproductivedevelopment
agendas,notonlyinColombia,butalsoinLatin
America. Firstly,Bogotahas been implementing
itsResearchandInnovationSmartSpecialisation
Strategy(RIS3),throughwhichactorsfrom
boththepublicandprivatesectorsandfrom
academia,arefocusingresourcesandefforts–in
particularthoserelatedto science,technology
andinnovation–onfivestrategicareasthatare
totallyalignedwiththecomparativeadvantages
andvocationofthecityandtheregion:Bio-Pole,
whichincludessectorsandclustersrelatedtothe
lifesciences;BogotaCreativeRegion,including
sectorsandclustersofthecreativeandcultural
industries;BusinessServices,whichincludes
activitiesandclusterssuchasfinancialservices,

MÓNICA DE GREIFF
President
BogotáChamberofCommerce
KPO,and BPO;AdvancedKnowledgeHub,
which seeks toenhanceBogota’seducation
and research capacities;andSustainableCity-
Region,which addresses regionalsustainability
challenges through entrepreneurialsolutions.
Atthesametime,Bogotaanditssurrounding
region has been implementingthemost
ambitious cluster-baseddevelopmentagenda
in the country.Bogotaiscurrentlyworking
on 16 cluster initiatives,alignedwithitsRIS3,
through whicheffortsaredirectedatidentifying
andaddressingbottlenecks that limit the
competitiveness ofthefollowingeconomic
agglomerations:Apparel,Jewellery,Footwearand
Leatherproducts,Electric Energy,Construction,
Business andEvents Tourism,Gastronomy,
Graphic Communication,Cosmetics,Financial
Services,SoftwareandIT,Dairy,Health,Pharma,
Creative and ContentsIndustry,andMusic.
Whatis happeninginBogotaandinthewholeof
Colombia withregardscluster-baseddevelopment
agendas was surelyoneofthereasonswhyTCI
chosethis citytohostthisspecialedition-the
20th-of its GlobalConference.Itwasprecisely
due to TCI’s 20thanniversarythatwedecidedto
put togetherthis commemorativebook,through
which we aimtobothderivelessonsfromthe
past20years oftheclusterconceptand,more
generally,oflocalcompetitiveness agendas,
and to look atthefutureandatwhatthenext20
years will bringintermsofthesediscussions.
Thelatterisveryexciting,especially-butcertainly
notexclusively-foracountrylikeColombia,
enteringaneweraofpost-conflict.Inanever-
changingworldfacingcomplexchallenges,such
asastagnantproductivity,climatechange,and
socialandeconomicinclusion,acluster-based
approachpromotedbytheregions,willbecrucial
tosuccessfullyaddressingthesechallenges.
Thus,thisbookisjustan
initialquotaforanon-going
discussionthattheTCInetwork
shallfosterandnurture.
Wetrulyhopeyouenjoyit.
5

Contents
Introduction
TCI Global
Conference/
TESTIMONIALS/
CONFERENCES
p.8
p.32 p.34 p.38
The past
Clusters Cluster
policy
Cluster initiatives,
associations and organisations
Clusters
and Cluster
Policy in the
next 10 Years
p.32
p.31
p.30

p.40 p.42 p.44 p.48
p.70p.68
p.52 p.58 p.60 p.63
The present
Conclusions
and key
takeaways
The Future
References
Cluster
mapping
Cluster
evaluation
Snapshots of
cluster initiatives
around the world
Cluster landscape
and challenges
in Latin America
Global trends
shaping cluster
context
Thecluster
concept
and beyond
Modern
cluster
policy
associations and
organisations
ANNEX 1/TCI Board
p.40
p.66
p.50

TCI Global
Conference/
TESTIMONIALS/
CONFERENCES
20 Years of TCI 820 years of TCI Network | the Past, Present and Future of Clusters

TCI Global
Conference1st/
Barcelona, ES / 1998
Nuts and bolts of
cluster development
HOST: TCI Network
#TCI1998 Barcelona Professionals from
+30 countries attended @tcinetwork,
first global conference sharing practice &
knowledge about #cluster development
#TCI1998 @MichaelEPorter
inaugurated @tcinetwork headquarters
in #Barcelona: the first global network
of #cluster practitioners was established
ThefirstconferenceinBarcelonaledtothe
establishmentofTCI(TheCompetitiveness
Institute,atthattime)asaprofessional
organisation.Thiswasaparticularlymeaningful
eventasitgathered,forthefirsttime,a
largegroupofpioneersworkingincluster
developmentallovertheworld.Asthe
maintheme“TheNutsandBoltsofCluster
Development”suggests,thediscussioncantered
onthestateoftheartofanewapproachto
regionaleconomicdevelopmentthatcombined
strategicanalysiswithaction-orientedinitiatives.
Aspartofthisinitialmovement,Cataloniawas
especiallyproudtohostthisfirstconference.
TESTIMONIAL Alberto Pezzi
TESTIMONIALS / CONFERENCES9

TCI Global
Conference
TCI Global
Conference
2nd/
3rd/
Varese, IT / 1999
Glasgow, UK / 2000
The challenge of mature
and emerging clusters
HOST: TCI Network /
Club dei Distretti
Clusters in the new
millennium
HOST: Scottish Enterprise

The second conference was held in Varese, northern Italy, a territory that is particularly
rich in natural clusters/industrial districts. The discussion focused on clustering as
a global phenomenon and the theme “The Challenges of Mature and Emerging
Clusters” showed a growing need to adapt cluster development methodologies
to diverse contexts and to different stages of development. The conference
introduced, for the first time, a closer look at clusters through benchmarking cluster
visits, and, since then, clusters tours have became a key element of TCI events.
TESTIMONIAL Alberto Pezzi
#TCI1999 Varese The challenge of mature and
emerging #clusters at @tcinetwork 2nd global
conference: global defies for local communities
www.distretti.org co-organised #cluster
benchmarking visits at #Lumezzane
and #Biella clusters #TCI1999 Varese
As one of the first regions in the world to actively embrace the concept of cluster development,
Scotland was proud to host the 3rd TCI conference to share experience, insights and learning on
leading policy and practice in cluster development. The conference brought new people, ideas
and connections to Scotland and played an important role in shaping our approach to cluster
development, and a long-term investment in stimulating and supporting the growth sectors.
In the years since then, the principles of cluster development have remained strong at the heart
of our collective activity. We work collaboratively to identify our sectors’ competitive advantages,
agree on strategies and actions to help address common challenges boost, the competitiveness
of our clusters, and capitalise on shared opportunities for broader long-term economic growth.
TESTIMONIAL Madeline Smith
#TCI2000 Glasgow was
recognised as a huge
success to #Scotland and
played an important role
in shaping our approach to
#cluster development
@tcinetwork has been alongside us
on our #cluster journey in #Scotland,
stimulating our initial thinking, informing
our long term fundamental approach
& helping continually refresh and
update our ideas #TCI2000 Glasgow

TCI Global
Conference4TH/
Tucson, US / 2001
Clusters and the new
economy
HOST: Greater Tucson
Strategic Partnership for
Economic Development
This was the first conference in the Americas, not forgetting the 1997 gathering in
Chihuahua, MX, that lead to the inception of TCI-The Competitiveness Institute.
Tucson, Arizona, had been at the forefront of cluster-based economic development
for over a decade and the conference helped us to showcase Arizona’s knowledge
economy clusters before an international audience. Regional clustering was
being adopted in all corners of the world as a basis for economic and business
development and the practices of clusters were evolving fast. Only one month
after 11S, discussions focused on the relationship between the new economy and
regional clusters. The rise of the new economy was supercharging existing clusters,
powering the development of new clusters, fostering ties between clusters, and
providing opportunities to link clusters in the developed and developing worlds.
TESTIMONIAL Bob Breault
#TCI2001 Tucson was a great opportunity
for analysts and decision makers
from around the world to learn from
the #Tucson #cluster experience
#TCI2001 Tucson showed how big impacts
of the new economy were being felt in the
dynamic interplay of regional #clusters

#TCI2002 key outcomes:
measurement and evaluation
as the next big challenge;
moving from analysis to
implementation; facilitating a
better understanding of how
clustering concepts can help
government transform itself
TCI Global
Conference5TH/
Cairns, AU / 2002
Connecting clusters
HOST: Queensland
Government / Cairns
Region Economic
Development Corporation
The conference reaffirmed the positive contribution that industry
clusters make to the development of host countries and regions.
At a time of heightened global investor uncertainty, governments
and business must work collaboratively to minimise common
risks and to strengthen pathways to trade and investment.
Delegates agreed that the specific benefits of the cluster
approach include the achievement of the critical mass required
for business development, effective infrastructure development
and effective marketing; providing a vehicle for ‘people to people’
connections (intangible relationship building); capitalising on the
strengths of a group of firms without compromising the initiative
of individual members; driving outcomes in innovation, trade
and investment. We did not, however, influence national policy!
It was a memorable conference. The dinner was held on
‘Double Island’ to showcase the magical environment of
the region. The ferry broke down and we had to finish the
journey in small tender boat. It was quite an adventure!
TESTIMONIAL Tracy Scott-Rimington
#TCI2002 many of the
Australian delegates made
professional and #cluster
connections that have
endured to the current today

TCI Global
Conference6th/
Gothenburg, SE / 2003
Innovative clusters,
a new challenge
HOST: VINNOVA /
NUTEK / ITPS / ISA
The City of Ottawa and its many
conference partners were honoured
to host the 2004 conference and to
follow in the footsteps of TCI’s family of
successful host cities. The conference
offered a chance to meet the research,
government and business leaders
who helped to transform Ottawa’s
economy, creating new opportunities
for growth through collaboration and
partnerships. The program followed
eight different tracks in order to
deepen in key areas of cluster activity.
Those members pursuing the same
categories of interest were engaged in
continuous dialogue throughout the
conference, in miniforums, and they
were provided with track facilitators
with a vast amount of cluster knowledge
and experience to guide them through
the conference and achieve results.
TESTIMONIAL Michael Murr
#TCI2004 offered a chance to meet the research,
government and business leaders who helped to transform
#Ottawa’s economy creating new opportunities for
growth through collaboration and partnerships
#TCI2004 conference program followed eight different
tracks; facilitators with a vast amount of #cluster
knowledge and experience guided participants
through the conference and to achieve result

TCI Global
Conference7th/
Ottawa, CA / 2004
Building innovative
clusters for competitive
advantage
HOST: City of Ottawa
The 2003 conference in Gothenburg brought together participants from different professional
environments involved in various ways in innovative clusters and innovation systems. The conference
provided methodologies and deep understanding on how to boost collaboration for innovative
clusters, innovation being a key factor of competitiveness, with reference made to human resource
development and skills training, and to the role of the education system and universities. A highly
interactive program was organised with top roundtables on the forefront of clustering, mini forums
on the practice of cluster strategies, learning workshops with real cases of mature clusters and action
workshops for emerging clusters. The cluster visits, academic summit and introductory course on
basics of clusters, made up a program that met the needs of participants with varied interests and
backgrounds. The Cluster Initiatives Green Book (Sölvell, Lindqvist, Ketels), a reference on the state of
the art of cluster practice at that time and a key publication on clusters, was presented in Gothenburg.
TESTIMONIAL Lars Eklund
Each session of the #TCI2003 Gothenburg
conference was a combination of a
keynote speech (inspiration), a moderated
roundtable (practice) & focussed
workshops (learning and action)
The #Cluster Initiatives Green
Book (Sölvell, Lindqvist,
Ketels) was presented at
#TCI2003 in Gothenburg

TCI Global
Conference8TH/
Hong Kong, HK / 2005
Enter the dragon: China's
emergence and international
competitiveness
HOST: The Hong Kong
Institute of Economics
and Business Strategy
The main focus of the 2005 conference was on China and its impact on the
world. China’s emergence onto the world stage created unprecedented
opportunities and challenges to business people and policy makers from
all over the world. China had become a market, an investment location,
a production platform and a competitor. Many of the sessions in the
program referred to China’s rise along with a relevant amount of the more
traditional TCI issues including a stream on rethinking competitiveness.
TESTIMONIAL Michael Enright
Cluster study visits during #TCI2005 included
tours to #Guangdong and #HongKong to
learn how Greater Pearl River Delta came to
dominate industries locally and globally
#TCI2005 in #HongKong was an opportunity
to make contacts with Chinese counterparts
and to make linkages with Asian clusters

At that time, the French government had just launched a national cluster policy,
balanced with the various local/regional initiatives from the early 2000s. The
conference gathered 437 participants from 62 countries, visiting 8 cluster tours,
and debating the topic of “Governance and business involvement in cluster
initiatives”. The outcome shed light on the fact that governance is a matter
of power, trust and interdependence. Business involvement depends directly
on the size of companies. As the event took place in the Palais de la Bourse,
in the heart of the city, the participants were able to walk to all the different
venues, and even dance at the very first TCI party following the gala dinner!
TESTIMONIAL Frédéric Miribel
Governance and companies as
cornerstones of #cluster initiatives
was the focus of #TCI2006
conference in #Lyon
#TCI2006 in Lyon beat all the
records of participation with 425
participants from 65 countries
TCI Global
Conference9th/
Lyon, FR / 2006
Governance and business
involvement in cluster
initiatives
HOST: Chamber of Commerce
and Industry of Lyon

TCI Global
Conference
TCI Global
Conference
10th/
11th/
Portland, US / 2007
Collaboration, innovation
and sustainability
HOST: Oregon Economic
Development Department
Cape Town, ZA / 2008
Clusters meeting the
challenge of globalisation
HOST: Trade & Industry
Development / Economic
Development / Tourism
in Capetown

The Oregon Economic Development Department and our many partners in Oregon
and Washington were committed to the success of the 2006 conference and they
invested effort, creativity and expertise into holding a memorable 10th Anniversary
event. The conference attracted economic development departments in nearly
all 50 U.S. states and big international delegations. We brought in strong industry
sponsorship and engaged industry in the conference and the topic of cluster
development, which was important for our state. Participants particularly valued
the chance to learn about Portland, one of the cities that had boosted initiatives to
combine sustainability with economic growth, and its business results. Sessions about
climate change, long-term competitiveness, and the impact of entrepreneurship
were part of the program. There was local and organic food to be enjoyed!
TESTIMONIAL Amy Keiter
#Portland's success in combining
sustainability with economic growth and its
positive business results could be tested at
#TCI2007 #Green Building Walking Tour
Boeing, IBM, Intel, Wal-Mart
explained their business strategies
in local clusters to improve local
competitiveness #TCI2007 #Portland
Being the first TCI conference in Africa, TCI2008 in Cape Town placed a particular emphasis
on the role of cluster initiatives in emerging economies, and the sharing of lessons between
cluster practitioners from both developed and developing economies. Sessions with a
regional focus on Africa, Latin America and India, and the programme was made up of
topics such as commodity dependence, inequality and marginalisation, land reform, skills
and professional development through clusters. Cape Town offered a great opportunity for
attendants to meet with colleagues, policymakers, researchers, business entrepreneurs,
cluster managers and facilitators and to engage in lively discussions in a superb atmosphere.
TESTIMONIAL Nigel Gwynne-Evans
The welcome reception at the top of
Table Mountain with its spectacular
sight of #CapeTown sunset was
the meeting point for delegates of
TCI and the international #cluster
community at #TCI2008
#Cluster practitioners from
developed and developing
economies sharing experiences
in lively discussions in
a superb atmosphere in
#TCI2008 #CapeTown

TCI Global
Conference12TH/
Jyväskylä, FI / 2009
Learning clusters -
adapting to the new
competitiveness scenario
HOST: Regional Council
of Central Finland
Our goal when we designed the 2009 conference was to use the
thousands of years of experience of the TCI members to jointly
create new solutions to develop competitiveness and manage
global change. Vision and leadership, the added value of clusters,
interaction and learning in networks, innovation processes in
clusters and the aptitude to identify new business opportunities
were common themes for all clusters. But we mainly wanted to
stress learning as a key tool with which to deal with challenges
and we played with the idea of clusters as networked learning
organisations - learning clusters. With that purpose in mind, we
created a unique learning process for the conference where the
expertise from the conference participants was key. We particularly
asked them not to cling on to sectorial thinking when placing their
presentations, but instead think of what challenge or solution
their case represented and where it best fitted in the conference
process: sharing information, identifying patterns, finding new
models or testing new solutions. Delegates coming to Central
Finland could obtain ideas and inspiration from speakers from
different disciplines, an innovation developer, a futurist, a journalist,
and even a philosophy professor and experience different session
formats, from clinics to an outdoor seminar and a sauna immersion,
all documented in a daily newspaper. The TCI crowd enjoyed the
Kalevala magic night wearing their countries’ traditional costume!
TESTIMONIAL Anna Korpi
Learning #clusters, clusters
as networked learning
organisations was the
inspriation to design #TCI2009
in #Jyväskylä #CentralFinland
Delegates at #TCI2009 in
#Jyväskylä #CentralFinland
could get ideas and inspiration
from speakers from different
disciplines, an innovation
developer, a futurist, a journalist
and even a philosopher

TCI Global
Conference13TH/
Delhi, IN / 2010
Competitiveness, innovative
clusters and prosperity
HOST: Institute for
Competitiveness India
Delegates from across the globe attended the TCI2010 conference to share their
thoughts on competitiveness, economic development, and the benefits of cluster
formation. Some of the highlights of the forum included cluster tours in Delhi
(IT & Automotive Cluster) and Noida (Media Cluster), Industry focus sessions on
automobiles, IT, Education, Climate Change, etc. and interesting panel discussions
on competitiveness and poverty, public policy implications of competitiveness,
etc. Over 80 eminent speakers attended the conference, including Michael
Enright, Klaus Haasis, Brian Roberts, Wolfgang Lehmacher, Torger Reve, Ana
Korpi, Michael Steiner, and Janamitra Devan (World Bank), among others.
TESTIMONIAL Amit Kapoor
#TCI2010 in #Delhi was an experience
to remember, an immersion on Indian
#clusters and a bridge to find paths for
prosperity through #collaboration
#TCI2010 in #Delhi was one of the most
multi-cultural conferences TCI has held, with
a good representation of the developing
world from Africa, Asia and South America

TCI Global
Conference14th/
Auckland, NZ / 2011
Competitiveness
at the edge
HOST: ATEED-Auckland
Tourism, Events and
Economic Development
The TCI2012 conference in the
Basque Country explored the
theme of ‘constructing place-
based competitiveness in times
of global change’. The focus was
on understanding how firm- and
cluster-level strategies combine
in the construction of place-based
strategies that ensure sustainable
competitiveness, issues that continue
to shape debates in the Basque
Country today. Over 450 delegates
met in Bilbao and San Sebastian, and 7
cluster tours provided an opportunity
to share experiences and reflect on
the competitiveness trajectory of
a territory with strong tradition in
cluster policy. Hosting the conference
and continued active engagement
in TCI is helping to evolve and shape
that trajectory into the future.
TESTIMONIAL James Wilson / Mari Jose Aranguren
Remember this? In 2012 we met in the
#BasqueCountry for our #TCI2012
conference, hosted by @orkestra &
@Irekia #clusters #competitiveness
Cluster pioneers: Looking back to
#BasqueCountry #TCI2012, bringing
together cluster policy shapers from
around the world to share their vision

Hosting the TCI2011 conference in Auckland provided an opportunity to connect and make new friends
from many places around the globe. We needed our economy, our business people and our sectors to be
globally relevant and internationally connected. We were inspired by experts, we gained insights, and
made new connections from visiting delegates and workshop leaders. In turn, we shared some of our
world-class people, businesses, and clusters. The three Cs: clusters, collaboration and connectedness
are the key messages we took from the week, and we look forward to the conference being a catalyst
for a more competitive, globally relevant Auckland. Without doubt, the Conference was a timely
reminder on how cluster-based competitiveness can fit into broader economic development policy and
we appreciated the efforts of TCI members in drawing together a submission to the Auckland Plan.
TESTIMONIAL Tony Caughey
The Kia Ora newsletter
recaps top "kiwi"moments at
#TCI2011 in #Auckland, as
the Powhiri Maori Welcome
and the yacht racing on
#Auckland harbour, a
fantastic plan to break the ice
and to forget about the jetlag
Did you know that #TCI2011 won
a bronze medal at New Zealand
Sign and Display Awards for
its networking exhibition area?
The ‘New Zealand Lounge’ was
designed to create a New Zealand
inspired space for delegates to
network and enjoy breaks
TCI Global
Conference15th/
Basque Country, ES / 2012
Constructing place-based
competitiveness in times of
global change
HOST: Orkestra - Basque
Institute of Competitiveness

TCI Global
Conference
TCI Global
Conference
16th/
17th/
Kolding, DK / 2013
Designing the future
- Innovation through
strategic partnerships
HOST: The Region of Southern
Denmark / REG X
Monterrey, MX / 2014
Creating shared value through
clusters for a sustainable future
HOST: SEDEC - Nuevo Leon Economic
Development Secretariat,
Nuevo Leon State Government
and Nuevo Leon Clusters

The TCI2013 conference in Kolding, Denmark, was an important ingredient in the
further development of the Region of South Denmark’s cluster programme, the
development of the clusters in South Denmark and cluster development in Denmark
in general. Social media was used throughout the conference to bring new partners
together. Among others, the Glasgow School of Art tweeted that they were
looking for partners to develop an exchange program for students. An opportunity
seized by the Kolding School of Design, which is a key actor in the South Denmark
Design Cluster. The two cluster organisations Offshoreenergy.dk and Wellfare
Tech in South Denmark also obtained a number of new contact points to potential
commercial links with Brazil, Abu Dhabi, Austria and Australia, among others.
TESTIMONIAL Lotte Langkilde
The @tcinetwork song was unofficially
presented at #TCI2013 in #Kolding
Find out the lirics @tcinetwork
The Every Encounter Equation= short
presentations+interactive discussions+social
media was put into action at every parts
of the #TCI2013 conference in #Kolding
The TCI2014 conference in Monterrey, Nuevo Leon, addressed the question of how clusters
contribute to creating shared value among organisations and in regions and communities.
The future economic, social and environmental development depends on the capacity
of organisations to operate under a model of across-the-board value creation. The role
of clusters supporting this effort is critical in creating a satisfactory long-term outcome.
The TCI2014 conference provided a unique opportunity for global delegates to advance
the understanding of shared value creation and to work towards practical solutions.
TESTIMONIAL Manuel Montoya
Participants at the C2C meetings
in #TCI2014 #Monterrey found
potential partners and explored
opportunities of cooperation
in international projects
The #clusters in #NuevoLeon
had a main role in the whole
#TCI2014 organisation; they
also hosted cluster visits
where they openly shared their
achievements and also difficulties
in the daily life of the #cluster

TCI Global
Conference18TH/
Daegu, KR / 2015
Clusters in a creative
economy. New agendas for
companies and policy makers
HOST: KICOX - Korea Industrial
Complex Corporation
The theme of “Clusters in a Creative Economy. New Agendas for Companies and
Policy Makers” led to a variety of discussions on clusters in a creative economy
and to opportunities to exchange experiences of international cluster policies. The
TCI2015 conference announced that the Republic of Korea’s industrial complex
is growing into a global industrial cluster, not a mere agglomeration of industrial
complexes. In addition, the conference provided a forum to discuss future cluster
development strategies by sharing the Republic of Korea’s progress through a
successful industrial complex policy and cluster strategy. Finally, TCI2015 had become
a new leap forward for leading global cluster collaborative networks around Asia.
TESTIMONIAL Hyeyoung Cho
#TCI2015 in #Daegu was
the best attended
@tcinetwork conference
ever with 900 participants
from 86 countries
The first #cluster
stories of TCI series
Why Cluster Matters
were recorded during
#TCI2015 in #Daegu

TCI Global
Conference19TH/
Eindhoven, NL/ 2016
Global changes - Challenges
for innovation clusters
HOST: Brainport Development
NV and Wageningen UR
The TCI2016 conference in Eindhoven was a very fruitful and interactive conference with innovation
clusters being the focal point of attention. Brainport Development organised it together with
Wageningen University & Research to strengthen, in particular, high tech and food clusters in the
Southeast of the Netherlands and also to learn and discuss cluster policy. We welcomed more than
500 people, among policymakers, cluster managers, entrepreneurs, opinion leaders, academics and
visionaries. There were cluster tours, worldwide top speakers and many highly interactive working
sessions, all accompanied by pleasant informal and culinary moments. Within our region, we have
strengthened our cluster network and position by attracting financial partners and organising cluster
meetings before the conference, with public parties, educational parties, and cluster organisations.
TESTIMONIAL Joep Browers
Exchange of
experiences on
innovation #clusters in
surprising formats was
the key at #TCI2016
to learn from practice
in #Eindhoven
The #TCI2016
conference app provided
high engagement
from participants
in #Eindhoven to
learn, connect,
interact, and share.

TCI Global
Conference20th/
Bogota, CO / 2017
The future of clusters
through cross-country &
cross-regioncollaboration
HOST: BogotÁ Chamber
of Commerce
20 Years of TCI 2820 years of TCI Network | the Past, Present and Future of Clusters20 years of TCI Network

With twenty years gone by, the TCI2017 conference marks a milestone
for TCI and for cluster policy and practice. The fact that it has been
two whole decades since the first TCI conference obliges us to take a
look at what has occurred during this time and draw some conclusions,
but at the same time reflect upon the future of the cluster concept,
clusters and competitiveness policy and practice, and TCI as an
organisation. Moreover, this special edition of the conference coincides
with anti-globalisation sentiments, as well as nationalistic and populist
movements, making themselves felt in different parts of the world.
This makes the task of strengthening collaboration between regions
and between countries even more important. With 3 tracks aiming at
better policy, better practice, and better business, this Conference also
seeks to construct a bridge between modern industrial policy literature
and practice and the competitiveness and cluster framework, as well
as deepening TCI’s relationship with other multilateral organisations.
Finally, given the special anniversary, TCI2017 will remain in the
memory of its participants as having hosted the greatest party ever.
TESTIMONIAL Marco A. Llinás
29 TESTIMONIALS / CONFERENCES

20 years of TCI Network | the Past, Present and Future of Clusters
Clusters and
Cluster Policy
in the next 10
Years
James R. Wilson, Anastasiia Konstantynova
and Mari José Aranguren
James R.Wilson is Senior Researcher at Orkestra, faculty at
Deusto Business School and a Director ofTCI Network; Anas-
tasiia Konstantynova is Researcher at Orkestra; Mari José
Aranguren is Director of Orkestra and Professor of economics
at Deusto Business School.
The authors would like to acknowledge the input of members
of theTCI Board of Directors who participated at an ideas
workshop held in Barcelona in June 2017 (see Annex 1), the
contributors of specific inputs that are included in the section
‘The Present’, and the valuable comments on earlier drafts
of this chapter from Daniel Gómez, Christian Ketels, Marco
Llinás, Diego Peña, Jorge Ramírez and PatriciaValdenebro.
Any inaccuracies or errors are our own.
30

Introduction/
Reflecting on the
future of clusters
and cluster policy
1. KETs represent a group
of technologies that have
a wide range of product
application, and provide
the technological basis
for innovation across a
wide range of industries.
See: https://ec.europa.
eu/growth/industry/poli-
cy/key-enabling-techno-
logies/description_en
TCI Network was founded during the early years
of cluster policy. Following the publication of
Michael Porter’s hugely influential Competitive
Advantage of Nations, the 1990s were a time
when ‘clusters’ was first becoming established
as a key construct for guiding competitiveness
policy. Since then, the cluster concept has
demonstrated remarkable staying power and
reach, such that today clusters are a cornerstone
of contemporary competitiveness policy the
world over. The vast majority of countries and
their constituent regions offer some form of
support for and/or analysis of clusters as a core
element of their competitiveness, industrial, and
development policies. In line with this, a huge
number of cluster organisations and initiatives
have been established throughout the world.
Clusters and cluster policies have not remained
static over the last quarter of a century, and TCI
Network has been in the vanguard of analysing,
debating, and shaping their evolution by bringing
together key players from the academic, policy,
and practitioner spheres. As socio-economic
contexts, systems, and processes continually
change, so do the structure of clusters, the
challenges facing them and the types of policy
support required. Indeed, in the last few years
especially, rapid developments in digital, bio,
nano, and other key enabling technologies
(KETs)1
have started to disrupt many traditional
economic structures and associated policy
instruments, and new economic and social
challenges are potentially changing the
significance of clusters and the future of cluster
policies. As TCI Network celebrates its 20th
anniversary, it is an opportune moment to look
forward and reflect on what the future holds.
This chapter aims to reflect on and discuss the
main trends, challenges and opportunities
facing clusters and cluster policies over
the next 10 years. It is structured in three
main parts. Firstly, there is a reflection on
where we have come from, summarising
thepast trajectory of the cluster concept
and its translation into a key policy tool
and the focus for so many cluster initiatives
around the world. A series of cases are then
used to characterise thepresent state of
cluster analysis and cluster initiatives.
Finally, we explore what the future may hold for
clusters, cluster policy and cluster initiatives/
organisations. The chapter is concluded by
summarising some of the main takeaways.
31 INTRODUCTION

The pastUnderstanding the past is an important
starting point for reflecting on and shaping
the future. When it comes to clusters we can
turn to more than a quarter of a century
of cluster analysis and support measures,
documented by thousands of publications
(see Graph 1) and practical experiences
in cluster mapping, cluster initiatives,
cluster policy, and cluster evaluation.
Clusters
Today’s cluster concept can trace its roots back
to Alfred Marshall’s insights on the advantages of
agglomerations of economic activity in ‘industrial
districts’ at the end of the 19th
Century. Towards
the end of the 20th
Century Giacomo Becattini
and others built on the industrial district concept
to explore the experiences of Italian regions.2
The idea of a unique ‘industrial atmosphere’,
generated where firms in similar activities are
located close by, has since inspired a large number
of regional case studies aiming to understand the
advantages of spatial proximity. These findings
are reflected in different ways in concepts such
as industrial complexes, innovation poles, local
and regional innovation systems, local production
systems, networks, local high-tech milieu, learning
regions, ecosystems, and of course clusters.3
By far the most influential development of
Marshall’s agglomeration logic in terms of practical
application and policy reach is Michael Porter’s
definition of clusters, seen as “geographic
concentrations of interconnected companies,
specialized suppliers, service providers, firms in
related industries, and associated institutions
(e.g. universities, agencies, and trade
associations) in particular fields that compete
but also cooperate” (Porter, 1998, p. 197).
Taking on board widely-acknowledged ‘positive
externalities’ derived from spatial agglomeration
–such as tacit knowledge spill-overs, labour
market pooling, reduced transaction costs, and
2. See, for example: Pyke
et al (1990) or Becattini
(1990).
3. See, for example: Asheim
(2001), Asheim & Gertler
(2006), Cooke & Morgan
(1998), Keech et al
(2012), Scott (1998).
Here we aim to summarise this
rich knowledge base so as to build
common ground for reflecting on
future scenarios for clusters, cluster
policies, and cluster initiatives.
A quarter
of a century
of cluster
knowledge
GRAPH 1
ARTICLES
PUBLISHED,
TOTAL, BETWEEN
1991 -2017

Source: Own elaboration,
based on data from Google
Scholar (www.scholar.
google.com).
economies of scale— Porter’s clusters have
a distinctive emphasis on the coexistence of
competitive pressures alongside cooperative
dynamics. They are also distinguished as
‘traded’ or ‘local’ clusters. Traded clusters
reflect activities that serve markets (or have
potential to serve markets) beyond the regions
where they are located, and that are therefore
exposed to international competition. Local
clusters meanwhile serve only local markets.
While local clusters play a strong role in providing
employment and in supporting the development
of the region’s traded clusters, it is the traded
clusters that account for most research &
development (R&D), generate higher-wages,
higher-skilled employment, and have higher levels
of productivity. Traded clusters might therefore be
seen as the ‘engines’ of regional competitiveness.
In terms of practical understanding and
application of the cluster concept, there is
considerable heterogeneity. Clusters can vary
in size (e.g. based on number of establishments,
companies, employees) and in form (e.g. hub
& spoke, satellite platforms, state-anchored),4
they can be present in different sectors and value
chains (e.g. from core industries like automotive,
wood and furniture, via agricultural products,
to service oriented activities), and of course in
very different regional and national contexts.
The evolution of clusters also depends on trends
in anchor sectors and specific industry life-
cycles, and the appropriate geographic scale
of clusters can vary significantly depending on
the activity (ranging from metropolitan areas,
to sub-national regions, to cross-regional,
national or even cross-national geographies5
).
4. See Markusen (1996).
5. The importance of
geographical proximity
for cluster dynamics
makes it difficult to
talk about clusters at
a national scale, other
than in small countries.
However, clusters might
be supra-regional or
supra-national to the
extent that they often
cross administrative
boundaries.
5,587
1991-2000 2001-2010 2011-2017
Industrial
clusters
Cluster
iniciative
Cluster
policy
7,75034,750
THE PAST33

Evolution
of cluster
policy uptake
Cluster policy
As the benefits of industrial
agglomerations and clusters –in their
different interpretations— became
understood, public policies towards
clusters started to emerge. Porter’s
emphasis on clusters as a practical
tool for policy-makers to map
and build strategies for territorial
development was particularly
influential, and clusters have become
to be seen as a ‘way of thinking’ about
regional economic development. They
encourage policy-makers to consider
the interaction of a wide range of
elements in the regional competitiveness
environment, which has significant
potential advantages in terms of more
joined-up, cost-efficient and strategic
public policy for competitiveness.
The rapid uptake of cluster policies
can be traced in three main phases,
which are reflected in Graph 2.
GRAPH 2
The broadness of the cluster concept, along
with its links into related concepts, has resulted
in considerable heterogeneity in cluster
policy. Different cluster policy programmes
operating in distinct contexts use a range of
instruments to address a variety of specific
policy goals, all under the general premise of
fostering relationships and actions that support
the competitiveness of clusters. In this sense,
cluster policy might best be seen as an ‘umbrella
term’ that encapsulates a fairly wide range
of policy measures that share core common
elements. Under these common elements,
cluster policy experiences vary in terms of
level of application (e.g. (sub/supra) regional,
provincial and city), type of actors driving design
and implementation (e.g. from top-down to
bottom-up initiatives), funding sources (e.g.
innovation, regional, competitiveness, industry,
investment, etc. programmes), and specific goals
and objectives (e.g. exports, growth, innovation,
business environment, internationalisation, etc.).
Looking to more recent history, cluster policies
have integrated well with the emergence of
modern industrial policies aiming to

Phase 1:
Pioneers
Phase 2:
Entrepreneurs
Phase 3:
Mainstream
1990s mid-1990s to mid-2000s from the mid-2000s
Pioneer countries and regions
get acquainted with the cluster
approach and take first trial steps
(such as mapping clusters, building
working groups, and encouraging
new institutions) to develop
competitiveness or innovation
policies based on this new approach.
These activities are based on a
trial/test approach, with the aim of
exploring potential advantages.
First results from pioneer experiences
generated a strong impulse for
spreading cluster policy. Encouraged
by some positive results and interest
from cluster policy beneficiaries, but
still with limited experience around
key success factors, ‘entrepreneurs’
in many regions and countries
advance cluster policy through
experiment-based implementation.
Previous experiences have now
established the cornerstones of
successful cluster policy, and it
becomes increasingly mainstreamed.
Extensive number of cluster policy
stakeholders illustrates benefits
from joint cluster activities and
cluster based policy support. It
becomes the norm for countries
and regions to have some form of
engagement with clusters as part
of their competitiveness policy.
reignite productivity growth (Lin & Monga
2017; Crespi et al. 2014; Warwick 2014; Wade
2012). Cluster policy differs from traditional
industrial policies in that it builds on sets
of activities, targeting the development
of whole value chains rather than specific
sectors. However, its emphasis on cooperative
relationships among triple helix agents from
business, research and government fits very well
with the focus of modern industrial policies on
public-private-research interaction determining
the prioritisation of economic activities (Rodrik
2004; Foray 2014). Indeed, clusters have played
key roles in emergent smart specialisation
strategies (Aranguren & Wilson 2013; European
Commission 2013), where they support the
‘soft’ capacity of public policy to address
coordination failures that present barriers
to efficient allocation of targeted innovation
efforts. More generally, cluster policies provide
a pool of 25 years of practice and experience
with public-private-research interaction that
are being integrated into modern industrial
policies, enhancing trust and confidence in
their effectiveness to boost productivity,
competitiveness, and territorial development.
35 THE PAST

This pool of experience is particularly important
because cluster policies, as all competitiveness
policies, are strongly context dependent. The
appropriate mechanisms to support clusters
depend on both regional and cluster specifics, which
condition their design and implementation. Yet
getting this support right has been demonstrated
to strengthen economic development in various
ways, and in particular through the capacity of
cluster policy to facilitate constructive public-private
engagement that provides valuable intelligence for
optimising other competitiveness policies. Graph 3
highlights some stand-out challenges and stand-out
learnings from past experiences with cluster policy.
GRAPH 3
Some specific
challenges
and learnings
from 25 years of
cluster policy
Three stand-out challenges
1
Identification,
selection and
prioritisation of
clusters for support,
especially with regards
to embryonic or
emerging clusters;Source: Author´s elaboration built on re-
viewed literature (with specific reference
to European Commission, 2016).

Three stand-out learnings for “good policy”
12 23 3
Balancing use of
appropriate quantitative
and qualitative
indicators within
suitable methodological
frameworks that can
support the design,
implementation, and
evaluation of cluster policy;
Practical
implementation
of cluster support
mechanisms: public
vs private driven,
scale and scope of
clusters, appropriate
organisational
form to support.
Cluster policy can play
a key role in improving
policy efficiency in
other areas, especially
when integrated in
an overall framework
for competitiveness
environment
development.
Detailed and in-depth
analysis of clusters,
markets, and policy-
related factors have
proven to facilitate
prioritisation of
clusters to support;
Establishment of
shared vision and
understanding
among cluster policy-
makers, implementers
and recipients via
constructive and
comprehensive
dialogue;
THE PAST37

associations, and
organisations
Over 20 years of experience with cluster policy
has also illustrated the variety of different
tools, instruments or initiatives that can be
used for cluster development. Porter identifies
a broad range of intermediary ‘institutions for
collaboration’ –including chambers of commerce,
industry associations and university alumni
associations– that can have important impacts
on cluster competitiveness. The 2003 Cluster
Initiative Greenbook (Sölvell et al. 2003) –based
on qualitative (around 20 case studies) and
quantitative (results of 250 responses from a Global
Cluster Initiative Survey) analysis– made the more
specific term “cluster initiative” popular. Cluster
2017
Beg.
2000s
Non-institutionalised
Source: Own
elaboration, based on
reviewed literature
Cluster
association/
CMO
Cluster
initiative
graph 4
Cluster
initiatives
Importance as a tool
inclusterpolicy
initiatives are referred to as ‘partnership projects
to promote cluster competitiveness’ or ‘a tool to
‘lubricate’ clusters and make them more dynamic.’
Graph 4 illustrates how the general vision and
understanding of the precise role and form of
cluster initiatives has evolved over the last 20
years, with a tendency towards more-formally
institutionalised forms6
, and increasing use
of the term ‘cluster association’ or ‘cluster
managing organisation (CMO)’ to describe such
organisations. While initially cluster initiatives
tended to have a loose structure of working
groups or volunteer based initiatives dealing
with cluster specific issues, in recent years
these have evolved towards legally registered
entities with well-defined organisational
structures, activities, and strategies.
For example, in one of the first references to a
“cluster initiative”, Lagendijk (1998) referred
to the “initiation of different activities based

6. By ‘more-formally
institutionalised’ we
mean institutions that
are registered in the
official public register
as a legal public/private
or public-private entity
and exhibit the typical
characteristics of a
formal organisational de-
cision-making structure.
A cluster initiative is /
Sölvell, Lindqvist,
& Ketels (2003):
partnership projects
to promote cluster
competitiveness
ESCA (2010):
cluster managing
organisation - a
management
agency that
coordinates
activities of cluster
participants
OECD (1999):
new forms of
governance and
incentive structures
based on networks
and partnerships
Enright (2000):
specialised
organisations
associated with
regional clusters
institutionalised
on promotion of cluster concept”, noting the
advantages of bringing together bottom-up
and top-down processes, and therefore giving
a new role for public policies in the frame of
territorial development. This fits well with later
work (OECD 1999) that explains the origin of
cluster initiatives “in a trend towards new forms
of governance and incentive structures based
on networks and partnerships” (p. 8). Among a
number of practical experiences and academic
viewpoints gathered in the OECD publication,
cluster initiatives were still not clearly defined in
terms of institutions or organisations. Based on
a survey in 2000, however, a definition emerged
as “specialized organisations associated with
the regional clusters (e.g. associations of firms,
specialized institutions, or specific cluster
organisations)” (Enright, 2000, p. 14), with a
large number of such organisations identified.
Over subsequent years the attention given
to cluster initiatives has increased, and they
are often referred to as cluster associations
or cluster management organisations to reflect
their increasingly formal institutionalisation.
The growth and institutionalisation of cluster
initiatives was largely driven by increasing demands
from cluster actors on their operational capacities,
and was pushed in particular in Europe by cluster
benchmarking methodologies developed by
the European Secretariat for Cluster Analysis
(ESCA), which later introduced certification
attributing clusters with bronze, silver, and gold
labels. Nevertheless, still today we can find cluster
initiatives around the world of all types: formal
and informal; hierarchical and flat; and offering
all kinds of activities for their (non-)members.
Regardless of the juridical or organisation
form, what they broadly have in common is
the aim of “bringing different types of firms
and organisations together around one supply
chain or one common resource or technology,
thus improving economic integration as well
as fostering communication and the transfer
of knowledge between firms” (OECD 1999).
THE PAST39

The present
As means of characterising the current ‘state
of clusters’ this section presents a series of
short cases and snapshots from around the
world, contributed by different TCI Network
members. They aim to reflect the current
state of art in both cluster analysis and in
cluster policy and cluster initiatives.
The section begins with a reflection on the
state of art in cluster mapping (from Christian
Ketels) and cluster evaluation (from Madeline
Smith, James Wilson and Emily Wise). It
Cluster mapping*
When TCI was founded, much of the analysis
of clusters was based on case studies. These
studies had the advantage of reflecting the
richness of clusters and their dynamics. They
provided deep learning on specific clusters
and developed a conceptual framework for
describing them. What they were not able to do,
however, was to test the general validity of the
cluster framework and to quantify the empirical
role that clusters played in the overall economy.
In the late 1990s Michael Porter launched at his
Institute for Strategy and Competitiveness the
first cluster mapping to address these concerns
head on. Its ambitious goal was to derive
data-driven, comprehensive, and transparent
cluster definitions that allowed the comparison
of individual clusters across locations and
assess their overall role in the economy. The
definitions were based on the evidence of
local spill-overs and externalities revealed in
actual co-location patterns of industry-specific
employment across the United States.
The results were powerful. The data
distinguished local from traded industries,
two parts of the economy that are both
important but subject to very different
competitive circumstances and with different
levels of prosperity generation capacity.
They showed that groups of related traded
industries concentrate geographically, with
concentrations in ‘strong’ clusters driving
higher performance. And they revealed how
regions have each their own distinct cluster
portfolio, with strong clusters as a key driver
of regional performance (Porter 2003).
With more and better data becoming available,
the definitions were increasingly refined. The
key break-through was to identify a small
number of transparent design choices that had
to be made while leaving the remainder of the
continues with a collection of snapshots
characterising cluster policies and initiatives
around the world (The Netherlands, Russia,
Republic of Korea, and Australia), drawn from
TCI Network’s video-blog series on “Why
clusters matter.” Reflecting the celebration
of TCI Network’s 20th
global conference in
November 2017 in Bogota, Colombia, the
section concludes by bridging from the present
into the future with a specific reflection from
Jaime Echeverri on the cluster landscape and
associated challenges in Latin America.
* Written by Christian H.M.
Ketels (Harvard Business
School, USA).

cluster definition process to be driven entirely
by the data (Delgado et al. 2016). The emerging
cluster data was then used to explore issues
like the relationship between cluster presence
and employment growth, entrepreneurship,
resilience, and regional prosperity (Delgado
et al. 2016; Ketels & Protsiv 2013).
Comparable data sets were first created
for the United States (US), followed by the
European Union (EU) and Canada. They capture
economic activity (measured by employment,
establishments, and payroll) by cluster
category for different levels of geography
(US: county, metropolitan area, economic
area, state; EU: NUTS7
-2 and higher; Canada:
Census Metropolitan regions, provinces). A
range of other countries, including Mexico
and the Republic of Korea, have recently
started efforts based on this methodology.
Governments have drawn on this work to launch
cluster portals that make this data available
for policy and economic development
practice. In the United States, the
Economic Development Administration
(Department of Commerce) supported the
2014 launch of the US Cluster Portal8
. The
European Commission hosts the EU Cluster
Portal9
on its site since 2015; the first
version had been launched in 2007. These
portals provide comparable ‘open data’
on the cluster composition of regional
economies and the geographic footprint of
specific cluster categories across regions.
What’s next? Research has only just
started to explore the data available.
Policy and cluster practice have to learn
how to best use this data, and how to
integrate it with other sources of data
related to cluster-specific business
environment conditions and market
dynamics. The next two decades of
cluster mapping promise to be at least
as exciting as the two previous ones!
7. NUTS (Nomenclature
of territorial units for
statistics) is a hierarchical
system for dividing up
the economic territory of
the EU.
8. www.clustermapping.us
9. http://ec.europa.eu/
growth/smes/cluster/
index_en.htm
“Policy and cluster
practice has to learn how
to best use this data”
“Data distinguished local from
traded industries, two parts of the
economy that are both important
but subject to very different
competitive circumstances”
41 THE PRESENT

Cluster
evaluation*
Given the popularity of clusters in the policy
sphere, there is significant demand to better
measure and understand their impacts. This has
led to considerable debate in the recent years
among cluster practitioners and academics
around the topic of cluster evaluation.
No ‘generally accepted standards’ for evaluating
clusters have been established among practitioners.
Regions and countries working with cluster policies
each develop their own approach, seeking to provide
evidence on the impact of supported clusters on
companies and regional development so as to
motivate continued investment in cluster efforts.
Most monitoring and evaluation of cluster
programmes is based on tracking quantitative
outputs of cluster efforts10
, and typically fall
short of demonstrating the impacts of cluster
policies, for example by comparing with control
groups. They also struggle to adequately
capture the more qualitative elements so
essential for successful clusters, such as the
role of trust-building and leadership. They
therefore tend to give only limited insights.
Academic analysis has also struggled to overcome
the challenges of cluster policy evaluation and has
been unable to have much influence on practice.
Until very recently most academic analysis tended
to fall into two camps: qualitative case studies
highlighting the relevance of contextual elements;
or evaluations seeking to quantify direct effects
in terms of specific, narrowly-defined outcomes,
often captured with imperfect data/indicators.
Given the limitations of any one methodology,
there is an emerging consensus on the need
to use mixed methods (Aranguren et al. 2014;
Schmiedeberg 2010; Wolfe & Gertler 2004), capable
of integrating different approaches such as social
network analysis (Smith & Brown 2009; Giuliani
& Pietrobelli 2016) or participatory evaluation
(Aragón et al. 2014). The emergence of such new
approaches offers exciting possibilities, but they are
often ignorant of the data-collection possibilities
that exist in practice or the specific needs of cluster
practitioners (after all, evaluation learning should
be useful to practitioners, not a burden). As such,
there remain significant gaps between theory and
practice around cluster policy evaluation, including:
* Written by Madeline
Smith (Institute for De-
sign Innovation, Glasgow
School of Art, UK) James
R.Wilson (Orkestra
and Deusto Business
School, Spain), and Emily
Wise (Lund University,
Sweden).
10. These approaches could
measure in terms of
critical mass (number
(#) of actors engaged),
linkages (# and type of
new linkages established
within and outside of the
cluster), innovation (#
of articles, patents, new
collaborative innova-
tion projects between
knowledge institutions
and industry, etc.), com-
mercialisation (# new
products and services),
and/or entrepreneurship
(# new companies). In
addition, information on
financial leverage and
“case stories” on the
cluster’s contribution
to broader systemic
developments (e.g.
investments in new RDI
infrastructure, attraction
of foreign talent, etc.)
may be collected.

“No ‘generally
accepted standards’
for evaluating clusters
have been established”
To move forward with these challenges there
are strong arguments for better blending
academic expertise and analysis with the
real-time and evolving experience of policy
makers and practitioners that are ‘closer’ to
the most relevant data (Smith et al. 2016).
This is something that the TCI Network Cluster
Evaluation Working Group11
is working to
address, bringing together participants from
academia and policy in a series of dedicated
workshops (in Scotland, Northern Ireland,
Poland, Spain, and Norway) as well as at TCI
11. http://www.tci-ne-
twork.org/evaluation
annual global conferences. Already this has
resulted in the development and validation
of an evaluation framework based on the
notion of what would expect to be found
in the ‘perfect cluster’, alongside a specific
survey question bank that is being used to
promote future comparative analysis around
the human elements that drive clusters. These
dynamics should provide strong foundations
for future advances, and are a prime example
of TCI Network members collaborating to
better inform and enhance cluster practice.
1 2 3 4 5
Aneedtoimprovehow
wecapturethemore
qualitative‘human
element’(orcooperative
dynamic)thatisessential
forunderstandingthe
processesandlinkages
betweenactorgroups
thathelpbuild,grow,and
evolvesuccessfulclusters.
A need to convert
emerging academic
analyses into the
development of
pragmatic indicators/
approaches that
have feasible data
requirements
in practice.
A need for a better
understanding of
the selection and
combination of
techniques and tools as
appropriate to different
circumstances.
A need to develop
approaches capable
of dealing with
complexity from the
interactions that
exist across policy
levels, instruments,
and initiatives.
A need to place
stronger emphasis
on policy learning,
rather than the more
common narrow
focus on audit.
“There are strong arguments for better
blending academic expertise and analysis
with the real-time and evolving experience
of policy makers and practitioners”
THE PRESENT43

Snapshots of
cluster initiatives
around the world
The Netherlands
The snapshots presented below are based on the transcripts
of interviews and articles by different TCI members,
and highlight the importance, relevance, and state of
art of clusters and cluster policies in their countries and
regions. We include here only a handful from many
more examples that can be found online in the “why
clusters matter” series at www.tci-network.org/.
“They started a project together,
where they tried to investigate
the challenges they could
share and master together”*
7 years ago some small and medium enterprises
(SMEs) in high tech industries, mostly suppliers
of large companies as ASML Holding, were
wondering about their future. They were
uncertain whether their position in the value
chain of those large OEMs (Original Equipment
Manufacturer) would even exist in 5 or 10 years, so
they started a project together called “mastering
the future of manufacturing”, where they tried
to investigate the challenges they could share
and master together. They even needed a second
project, which took another 2 years to get those
challenges right and well formulated. But at the
end those 7 companies talked about the results
of the project with the large OEMs in our region.
These 7 companies started a new cluster that
was supported by Brainport Development as a
development agency. In 2 years they attracted
almost 100 other manufacturing companies, small
and bigger ones, and they started a shared agenda
which they still work on today. In this agenda they
have 3 kinds of programmes. The first two are
a technology programme and a labour market
and unemployment-related programme. They
started their own training programmes together
with existing school programs and started what
is now called Brainport Industry College. The
third project is getting into international markets.
Most of the suppliers in this cluster work for the
large OEMs in our region, companies like ASML,
FEI, NXP, Phillips Health. Since a few years they
went out together to Germany, US, to find new
OEMs that allow them to work with them.
This story of 7 companies that started 7 years ago
and form now a cluster of almost 100 companies
is a success story that is worth sharing with you.
* Joep Browers, Brainport
Development; video
transcription “Why
clusters matter?”,
recorded during
the 18th TCI Global
Conference, in Daegu,
Republic of Korea
5 November 2015.

Russia
“Helped to enhance
comprehensive support
to emerging industries and
to build an innovative
ecosystem around them” *
Russian cluster policy started in 2010, and in only
5 years more than 200 cluster initiatives emerged.
It helped to enhance comprehensive support to
emerging industries such as IT, biotechnology,
waste technology, clean technology and to
build an innovative ecosystem around them.
The second goal of the cluster policy in Russia
is to revitalise old traditional agglomerations in
* Evgeniy Kutsenko,
Higher School of
Economics in Moscow,
video transcription
“Why clusters matter?”,
recorded during the 18th
TCI Global Conference,
in Daegu, Republic of
Korea,
5 November 2015.
aerospace, automotive, nuclear, petrochemical,
chemicals etc., and it is important to extend
value chains and diversify into new markets.
And the third important goal is to boost
the competitiveness of small and medium
enterprises in traditional sectors, like wood,
furniture, food production, jewellery,
where financing collaborative projects
is one of the main instruments.
45 THE PRESENT

REPUBLIC
OF Korea
“Significantly contributed
to the facilitation of
the industry-academia-
research cooperation
and businesses of SMEs.”*
In 2005 KICOX (a governmental organisation
specialising in the management and support of
industrial parks) adopted the cluster concept
and launched the Program for Competitiveness
Improvement of Industrial Clusters (Cluster
Development Program) to leverage clustered
businesses to build the network of resident
enterprises and partnerships among adjacent
universities, research organisations, and business
support organisations. The Cluster Development
Program aims to create synergism and improve
competitiveness of each sector by enabling
resident enterprises to build organic partnerships
with universities, research organisations and
business support organisations located
in areas adjacent to the parks. Through
technology transfers, the businesses can
solve technical problems and reinforce
tech competitiveness. Industrial parks
have played pivotal roles in local economic
growth through the Cluster Development
Program. As businesses of specific
industries were continuously clustered,
parks were evolved into clusters specialised
in specific industries. The Program also
significantly contributed to facilitation
of the industry-academia-research
cooperation and businesses of SMEs.
* Based on the article
“Benefits of adopting
a cluster approach in
the Republic of Korea,
by KICOX - Korea
Industrial Complex Corp”,
written by Kicox for TCI
Newsletter12
,
28 August 2015.
12. http://www.tci-network.
org/news/954

Australia
“We hope to see some
good strong competitive
clusters in the future.”*
Clusters in Australia have had a chequered
history; we have some strong clusters
that started around 20-25 years ago,
particularly around South Australia.
Over the years sometimes the clusters are
in and sometimes are out. Just recently we
found there is a renewed interest in clusters in
Australia. The strong clusters that have been
there for a long time have survived with their
own means, through their memberships, and
have wonderful business outcomes for their
members. And there are a lot of smaller cluster
initiatives that perhaps struggle more without
government support at any level, and some of
these drive, some of them don’t go ahead.
We are now looking forward to a brighter future
with clusters in Australia –we now have some
strong interest coming through from our Federal
government and we hope to see some good
strong competitive clusters in the future.
* Tracy Scott-Rimington,
Regional Development
Australia, Brisbane,
video transcription
“Why cluster matter?”,
recorded during the 19th
TCI Global Conference,
in Eindhoven, The
Netherlands, 9
November 2016.
47 THE PRESENT

Cluster landscape
and challenges in
Latin America*
Growth in Latin America has been unequal. One
of the factors to help breach inequality gaps
between countries and regions within them is
associated to the capacity to create new wealth
based on the intellectual and social capacities
developed by their citizens. To do so, long-term
social agreements and common objectives
that motivate leadership and guide common
purposes and efforts will have to be established.
In this sense, the cluster initiatives can serve as
This will require the construction
of synergetic capital in the form
of the articulation of different
forms of capital associated to
collective constructions of future
visions that are social, cultural,
economic and institutional. This
will mark differentiating elements
in the path of the region’s
progress and cluster-based
development strategies that
demand a confluence of interests
and of continuity. The evidence
shows that the regions that take a
chance on the impulse of strategic
clusters advance more quickly.
Corporate ecosystems contribute
to consolidating the economy and
increasing company competitiveness,
at the same time as they allow the
resources available for common
purposes to be maximised. Interaction
with universities, technological
institutions, social organisations
and governmental entities is good
practice in cluster strategies that
will contribute to the development
of countries and their regions. The
clusters will gradually become
the step required to connect
the social actors: companies,
academia and the government.
Private initiative is the best way
to drive a society’s progress, and
cluster strategies where market
opportunities and the demands
of innovation and collaboration
come together will allow greater
generation of individual value and
the creation of collective wealth for
the continent. In addition, private
leadership facilitates the continuity
of mid- and long-term processes.
There will be greater openness in
companies to collaborate and create
shared value within their regions.
Develop social
capacities to work
in medium and long-
term perspectives.
Construction of
institutional,
social and
corporate fabric.
Private
leadership.
1 2 3
Seven challenges:

A cluster-based
development strategy
facilitates the focus of
productive development
policies in that it can
contribute more aptly given
the strategic choices made
for regional economies.
To do so, sound public
policy in Latin America
for the development
and drive behind cluster
initiatives may lead to a
structural advance in its
path to development.
an efficient instrument to help develop
regional strategies to leverage their
growth based on their strengths.
A society is what it knows how to do.
Thus, societies that learn and become
more sophisticated progress more
quickly. Development strategies
based on clusters make this new
reality possible for the continent.
Inthissense,LatinAmericawillface
sevenchallengesduringthenext
decadeinordertosetthebasesforthe
establishmentofclusterstrategies
andinitiativesonthecontinent:
Sharing good practices shortens
learning periods, fosters trust,
creates greater wealth, and
promotes collective intelligence.
In Latin America, the level of
advancement in cluster strategies
is unequal and structuring
mechanisms to share learnings
creates better conditions for
the development of businesses.
During the next decade bridges
will be built between the industries
of different regions and nations
where the clusters will serve as
interlocutors and promoters of
interregional collaboration.
A multipolar world facilitates
connections with global value
chains and this relationship
will generate new specialised
knowledge, opportunities
and development to
drive the multiple cluster
initiatives on the continent.
The development of
cluster initiatives requires
professionals that can
facilitate the structuring
and development of the
strategies and that guarantee
a good management of
such initiatives. Above
all, it requires specialised
institutions that can deliver
their services pertinently.
* Written by Jaime Echeverri
(Medellin Chamber of
Commerce, Colombia).
Collaboration
and knowledge
transfer
between
countries.
Connection with the
best international
practices.
Professional
and institutional
skills building.
Construction
of public
policy.
4 5 6 7
THE PRESENT49

The Future
Building on the past trajectory of clusters and
snapshots of the present state of clusters in
different parts of the world, this section asks
where clusters and cluster policies are heading
in the future. An important input to the analysis
in this section are the reflections undertaken
Global trends that are shaping
the overall context in which
clusters and cluster policies
are taking place. These include
trends associated with ICT and
the digital revolution, as well as
the delicate interplay between
local and global dynamics in
search for higher productivity.
Trends relating to the cluster
concept itself and encouraging
us to re-think clusters and
beyond. These reflect, above
all, the changing boundaries of
clusters as technologies, markets,
and value chains evolve.
1
2
Graph 5
Images from
Barcelona
workshop
by the Board of Directors of TCI Network
at a workshop held in Barcelona in June
2017 (see Annex 1 map and the quotations
highlighted on the following pages).This
workshop brought together a wealth of cluster
knowledge and experiences from around the

Trends relating to modern
cluster policy, as clusters
increasingly become the
key channel for organising
public-private engagement in
the context of new forms of
industrial policy (e.g. around
smart specialisation strategies).
Trends relating to cluster
initiatives/associations/
organisations, including the
broadening of stakeholders,
the evolution of the roles
played by cluster organisations,
and associated changes
in the desirable skill-sets
of cluster managers.
3
4
world to discuss the current and future trends
shaping clusters and cluster policy development.
The analysis presented here combines these
reflections with our own insights and a range
of other documentary sources. Our aim is not
to be comprehensive, but rather to explore
ideas that may provoke ongoing reflection,
future discussion, and analysis among the
cluster community worldwide. To facilitate
this, the reflections are structured around four
broad groups of trends/issues (see Graph 5).
51 THE FUTURE

The emergence, evolution
and impacts of new
technologies
The first macro-trend refers directly to the growing
influence of new key enabling technologies
(KETs) associated with engineering and scientific
developments. In reference to UNIDO (2013), the
following technologies will drive the manufacturing
and production processes of the future: photonics,
biotechnology, nanotechnology, micro-technology,
advanced materials, and Information and
Communication Technologies (ICT).
For example, developments in nanotechnology
build novel improved physical, chemical, and
biological properties of phenomenon and
processes, and therefore potentially impact on the
production of almost any manufacturing good.
Following UNIDO (2013), the specificities of these
technologies are in their multidisciplinary and
trans-sectoral nature, which can be associated
with high-knowledge intensity, high R&D costs
and rapid innovation cycles. They therefore tend to
have a disruptive influence on work and production
patterns, value chain building, and international
cross-sector connections. Moreover, the changes
facilitated by these technologies impact not only
on production costs and timescales, but also on
the way products and services are conceived,
generated, and delivered between suppliers, buyers,
and to end-customers. The changes are complex
and unpredictable in nature, and they create a
disruptive ground for innovation and new forms
of value chains that will have repercussions for (in
particular ‘traded’) clusters and cluster policies.
As to ICT or digital technologies, McKinsey (2016)13
has suggested a “new era of digital globalization”
that will affect all public and private actors, from
large multinationals, SMEs, and start-ups, to
individuals, government, and other organisations.
We should expect that this will also shape new forms
of clusters, cluster ecosystems, and their boundaries.
Some of the influences can be seen in online
platforms and spaces (e.g. Amazon, Facebook,
Twitter, Alibaba, EBay, etc.), through which all kinds
of information are relatively easy accessible in a
short period of time, and through which networking
is possible with any partner situated in almost any
corner of the world. This is making negotiations
and decision-making extremely fast and global in
reach, as well as more inclusive, as almost any kind
of company can enter and participate in global
commerce, reaching suppliers and/or customers
worldwide. Digital technologies also impact on the
reach and complexity of supply chains and influence
Global trends
shaping cluster
context
There are transversal, macro-level or global trends
that are already shaping the overall context in which
clusters and cluster policies are taking place, and
are likely to continue to do so over the next decade.
In particular, two groups of trends stand out. The
first group is related to the emergence, evolution
and impacts of new technologies. The second group
reflects the interplay between global and local
dynamics in the drive for businesses and places to
boost productivity and ensure sustainable prosperity.

product life-cycles, making them shorter, more
flexible, responsive and faster in integrating new
technologies and innovations (UNIDO 2013).
Combined with other advances in new
technologies, such as Additive Manufacturing
(AM) and Artificial Intelligence (AI), digitisation
can become a ‘game changer’, revolutionising
traditional production and manufacturing
systems. These trends are likely to radically alter
the geography of production (e.g. by removing
much of the imperative for locating manufacturing
in places where labour is cheap). Indeed, in a
recent article for McKinsey (2017)14
, Bromberger
and Kell suggest that AM offers benefits over
traditional production methods that in the long
run can completely remodel the way products are
designed and built, as well as distributed, sold,
and serviced. Thus, the “factories of the future”
are potentially very different to those of the past;
according to the Economist (2017)15
the sports
producer Adidas is planning to apply 3D-printing
technologies in new fully-automated factories,
which will allow the company not only to bring
products to market faster and with lower-cost,
but also to make products tailored to individual
customers’ own designs, something that is
currently costly and time consuming. This will in
turn affect the local and international patterns
of trade, cluster, and value chain building.
Changes in manufacturing associated with the
digital revolution are often grouped under the term
“Industry 4.0” or “Digital Economy/Industry”16
.
Following Smith et al. (2016), there are three main
dimensions of change in relation to Industry 4.0:
technological change, social change, and change
in the business paradigm. In the last dimension
the main challenge has been seen in facilitating
SME participation in digitalised/automatised
supply chains, which are often associated with
high costs and risks, reduced flexibility, and
reduced strategic independence. This is one area
where clusters and cluster policies could play
an important role in responding to and shaping
the impacts of these emerging technologies.
As technologies revolutionise production,
they also impact on the character and form of
jobs and labour markets. As forecast by the
World Economic Forum (2016) in their report
on The Future of Jobs, one of the main trends
in the era of these new technologies will be
the massive dislocation of jobs from specific
industries, regions, and occupations. A central
challenge, in which clusters need to play a
key role, will be finding strategic place-based
responses to newly emerging forms of work
(e.g. the ‘gig’ economy) that maintain both
economic competitiveness and social cohesion.
Indeed, cluster policies and cluster organisations
“More ‘online clusters’
with the groups of similar
interests online”
“Cluster organisations
must exploit ICT and
stay ahead of trends”
13. https://www.mckinsey.
de/files/mgi_digital_glo-
balization.pdf
14. https://www.mckinsey.
com/business-functions/
operations/our-insights/
additive-manufactu-
ring-a-long-term-ga-
me-changer-for-manu-
facturers
15. https://www.economist.
com/news/briefin-
g/21724368-recent-ad-
vances-make-3d-prin-
ting-powerful-competi-
tor-conventio-
nal-mass-production-3d
16. This describes the orga-
nisation of production
processes based on
technology and devices
autonomously commu-
nicating with each other
along the value chain
(Smith et al. 2016).
THE FUTURE53

will need to be continually alert to the way
in which production and labour relations are
changing, so as to act in ways that ensure the
greatest socioeconomic benefits from them.
Technological developments are also inevitably
changing the ways in which clusters and
cluster organisations themselves operate,
something that is already being reflected in
the embracing of virtual platforms by the
cluster community. Examples include:
European Collaboration Platform17
,
an online community where cluster
practitioners (and beyond) share
information and connect theme-
specific cluster initiatives around
similar interests, needs, calls, etc.
Virtual C2C Matchmaking in
area of Advanced Manufacturing
(Interreg Europe Clusters3 project)18
,
resulting in online introductions
and discussions between project
partner regions’ cluster initiatives
Balancing local and
global dynamics and
challenges
The second macro-trend recognises two related
but distinct pathways for clusters associated
with ongoing globalisation processes. On
the one hand, globalisation facilitates and
encourages greater internationalisation
of local production systems through their
integration into global value chains. On
the other, globalisation emphasises the
importance of locally-embedded clusters
as valuable sources of tacit knowledge
generation and as a focus for responding to
challenges that are inevitably locally-rooted.
Easierandcheapertransportation,alongwith
advancesinICTs,havefacilitatedincreasing
connectivityandmobilityofeconomicactivity.In
thiscontext,tradedclusterscan’tavoidhavingan
internationaloutlook,andweareseeingincreased
internationalcluster-clustercollaboration,aswell
astheemergenceof‘mega-clusters’thatcross
borders.19
SuchtrendsledBuciuni&Pisano(2015)to
ask“canMarshall´sclusterssurviveglobalization?”
Theyexploredtheinfluenceofglobalproduction
onthefutureevolutionofmanufacturingclusters.
Despitethehighmobilityofmanufacturingthey
findthatsomeofitssectorsareactuallyvery
sticky,andconcludethatfactorssuchastacit
knowledge,adaptationtotechnologicalchange
betweensuppliersandbuyers,andhuman
resourcepoolingarelikelytocontinuetogivelocal
clustersadvantagesinmanyactivities.Moreover,
increasedlocalconsciousnessaroundtherooting
19. For example the Bio
Innovation Growth
Mega Cluster or ‘Big C’,
which brings together
activities in Belgium,
The Netherlands, and
Germany (http://www.
era-ib.net/sites/default/
files/big_c_innovation_
cluster.pdf)

Looking forward, we would expect the structure of clusters
and the behaviour of cluster actors/institutions to continue
to reflect emerging technological developments. This
seems likely to include: a widening of the scope of cluster
relationships and connectivity; making more and more
sophisticated use of online spaces and platforms that connect
cluster actors within and between clusters; embracing the
potential of ‘big data’ analysis to improve cluster policy decision-
making and implementation; and using online tools and data
to shorten the detection and response time to emerging
trends, for example around potential skills shortages.
Twitter communications
and LinkedIn groups
with different cluster, value
chain, and competitiveness-
related issues.
17. https://www.clusterco-
llaboration.eu/
18. https://www.interregeu-
rope.eu/fileadmin/user_
upload/tx_tevprojects/
library/file_1502179920.
pdf
ofeconomicactivities–witnesstheriseintheuse
of‘locallabels’andpersistenttalkofa‘backlash’
againstglobalisation–alsoprovidesacounterforce
totheincreasedpossibilitiesformobility.
This trend of ‘back to local alongside being
global’ is likely to persist and intensify over
the next decade. It implies that businesses and
policy-makers need to be aware of the delicate
balance between strengthening local dynamics
and building international connectivity. Clusters
–as key bridges between firms and territories–
are well-positioned to navigate this balance
between local and global dynamics. From a policy
perspective many of the market/government
failures to which cluster initiatives respond are
only identifiable and addressable at the local
level. Yet clusters also provide a lever for tackling
from the ‘bottom-up’ pressing socioeconomic
challenges at the global level, such as the
widespread stagnation of productivity growth,
the degradation of the natural environment, and
the extent of inequality both within and between
places that is leaving large groups of people behind.
Indeed, a key strength of cluster-based
approaches to territorial development is
their adaptability to different contexts and
challenges. They facilitate the understanding
of existing territorially-embedded opportunities
and challenges in a way that enables the design
and implementation of a strategy based on
territory-specific conditions. This also makes
them highly adaptable to the nuances of specific
challenges, such as the continued misbalance
between places in terms of economic, social,
and technological development (see Table 1).
“Back to Local” “More
localised clusters: (i) urban
agendas (ii) unique clusters,
(iii) multi-level clusterisation”
“Interest in
international/global
– growing building
of mega clusters”
“Clusters have the
way to implement and
understand the trend
‘think global act local’”
THE FUTURE55

Indicator Difference One of the highest One of the lowest
Characteristics Ratio High/Low Indicator Value Country Indicator Value Country
GDP per capita, 2015 (current, $) 336 101,909.8 Luxembourg 303.7 Burundi
Income share held by
lowest 20%, 2012
5 10.20 Ukraine 2 Haiti
High technology exports
(% of manufactured
exports), 2012
489 48.9 Philippines 0.1 Samoa
Births attended by
skilled health stuff
(% of total), 2014
6 100 Armenia 15.5 Ethiopia
Improved water source
(% of population with
access), 2014
2 100 Japan 48.6 Angola
Improved sanitation facilities
(% of population with
access), 2014
9 100 Singapore 11.6 Togo
Source: Based on
World Bank Database
(www.worldbank.org).
TABLE 1
Selected indicators reflecting
economic and social
differences worldwide

United Nations Industrial
Development Organisation
(UNIDO) technical assistance
projects based on export cluster
promotion (e.g. Cosmetics
cluster in Colombia).
Efforts to bridge these differences continue, with international and national
(non-) government organisations trying to facilitate the development
of lagging territories through technical assistance, information, and
awareness-raising campaigns. In recent years, clusters have provided a basis
for a significant amount of economic development assistance, reflecting
the growing bank of positive experiences with the cluster approach and
with cluster policies. Some of the examples of such initiatives are:
Cluster policies and cluster initiatives will
continue to play a key role in future efforts to
bridge the development gaps between different
territories, based on their capacity to develop
context-specific strategies to strengthen
productivity. However, we would expect them
to play stronger roles in developing and
pursuing agendas of inclusive growth,
that also tackle inequalities within regions,
and in contributing to other pressing
challenges that tie together local and
global dynamics, such as climate change.
TCI Network regional
chapters in different
parts of the world, e.g.
Latin America Chapter,
Oceania Chapter,
Asian Chapter.
World Bank activities ranging from
publications such as Clusters and
Competitiveness: A Practical Guide
& Policy Implication for Developing
Cluster Initiatives (2009)20
to projects
in cluster development (e.g. 2015
project launch on agricultural
cluster development in Uganda).
United Nations FAO report (2012)
on Agro-based clusters in developing
countries: staying competitive in a
globalized economy21
presenting some
cases of cluster development across
Latin America, Asia and Africa.
20. http://siteresources.
worldbank.org/INTRA-
NETTRADE/Resources/
cluster_initiative_pub_
web_ver.pdf
21. http://www.fao.org/
docrep/012/i1560e/
i1560e.pdf
57 THE FUTURE

The second group of trends refers to changes
in the cluster concept itself, as it adapts to a
continually changing environment that is being
shaped by the general trends discussed above,
in particular, the emergence and evolution of
new KETs. These trends are provoking changes
in the boundaries of clusters, both in terms
of activity and in terms of geography. This,
in turn, is likely to generate a progressive
adaption and evolution of the cluster concept.
The cluster concept has never been static.
Particularly in recent years, an evolution in cluster
practice has taken place, from interpreting
clusters as being predominantly based around
specific value chains, to interpreting clusters as
being increasingly transversal(e.g. related to
specific technologies or markets). The European
Cluster Panorama 201622
, for example, analyses
10 emerging industry clusters in areas such
as advanced packaging, biopharmaceuticals,
digital industries, experience industries,
logistical services, and mobility technologies.
Thus, while clusters have always broken
down sectoral barriers, they have begun
to do so in new ways, and their boundaries
have changed and continue to change.
This trend is likely to continue over the next
decade, as KETs continue to foster the cross-
fertilisation of many existing value chains, and
to create new value chains. As one TCI Board
member argued at the Barcelona workshop, while
the old cluster model was pre-occupied primarily
with collaboration in the business-to-business
(B2B) supply chain, the current model takes a
wider ‘ecosystem’ perspective of the value chain,
and next steps will increasingly look to bridge
between value chains. Another way of looking
The cluster
concept and
beyond
at this is in terms of increasing relationships
between clusters, from B2B to C2C (cluster-
to-cluster) collaboration, or of ‘platforms’ that
bring together clusters in ways that facilitate
more effective cross-fertilisation of ideas. Either
way, the boundaries of existing clusters will
become more blurred and are likely to change in
line with new types of relatedness of activities.
Cluster boundaries are also likely to evolve
in terms of geography, both as a response
to changes in the relatedness of different
activities and as new ICTs continue to make
it easier to collaborate across different kinds
of distances. Physical proximity will still be
very important, as elements such as tacit
knowledge flows, pools of specialised human
capital, and trust-building for deep, strategic
collaboration will remain critical. However,
the combination of digitalisation, additive
manufacturing, and artificial intelligence look
likely to change the significance of proximity
in some aspects of production relationships.
Indeed, we are already seeing changes in
the workplace in many types of activity,
for example, with trends towards different
types of contractual arrangements, working-
from-home and the growing significance of
piecework. These types of changes are likely
to have impacts on how we define and work
with clusters in terms of proximity in the
future. Moreover, changes in how economic
activities cluster together and in the types of
relationships required for their continued success
will have knock-on effects with regards to the
practice of mapping and analysing clusters,
designing and implementing cluster policy,
and the day-to-day of cluster organisations.
22. See Ketels &
Protsiv, 2013.

20th TCI Anniversary Commemorative Book: The past, present and future of clusters

20th TCI Anniversary Commemorative Book: The past, present and future of clusters

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20th TCI Anniversary Commemorative Book: The past, present and future of clusters