This document discusses industrial clusters through two case studies. It defines a cluster as a geographic concentration of interconnected businesses in a particular field. The semiconductor industry in Silicon Valley and the automobile industry in Detroit are provided as historical examples of successful clusters. Benefits of clusters include access to resources, information, institutions, customer needs and technology. Potential downsides are homogeneousness, monopolization and high business costs. Current issues facing clusters include lack of knowledge sharing, liquidity and government support. Solutions proposed are strong leadership, start-up support, open innovation and collaboration between government, institutions, universities and companies. Case studies of the Tsukuba Science City cluster in Japan and the Silicon Valley cluster in the US are then described.

1. Industrial Cluster

2. Table of contents
1. What is cluster and history
2. Merit and demerit of cluster
3. Current issues and solutions
4. Case model A
5. Case model B

3. What is cluster and history
 Cluster is a geographic concentration of interconnected businesses, suppliers, and associated
institutions in a particular field.(Michael E. Porter)
 A cluster is different from the classic definition of
industry sectors because it represents the entire
value chain of a broadly defined industry from
suppliers to end products, including supporting
services and specialized infrastructure.

4. What is cluster and history
 Two most impressive industry clusters in the history
of the United States are the semiconductor industry
in Silicon Valley and the automobile industry in
Detroit.
 An industry cluster can start in a number of ways.
Development
Example
Geographical cluster
Silicon Valley and Hollywood
Sectoral clusters
Marine (south east England)
Photonics (Aston Science Park, Birmingham)
Horizontal cluster
Knowledge management
Vertical cluster
Supply chain cluster

5. 2. Merit of cluster
Enhance productivity
① Access to resource
(Investment and employee)
② Access to dedicated information
③ Access to Institutions and Public Goods
④ Access to customer need and technology
⑤ Low transaction cost

6. 2. Demerit of cluster
Homogeneousness
Because of long and fixed relationship among
cluster, innovation is getting to be restrained
Monopolization
Less completion makes inefficiency of
technology
 High business cost
Area centralization causes the bottle neck of
establishing plant and high logistic cost

7. 3. Current issues and solutions
Knowledge
Univer
sities
A lack of
good cycle
good liquidity
Because of
Gover
nment
Inno
vation
Capacity
Company closure
Government
support shortage
Compa
nies
Institu
tions
Support
Startups
Incubation

8. 3. Current issues and solutions
Solutions
 Strong leadership of government and companies
Startups
Government
support
Governme
nt
Open
Innovation
Institu
tions
Invitation
Companies
Univer
sities

9. 4.Case1 Tsukuba science city
1963: The cabinet approved construction of the
national project,“ Tsukuba Science City”
1980; The 43 research and educational institutes
were relocated or newly built.
Population in Tsukuba Science City; 213,135
(As of February, 2010)
This includes 7,517 foreign residents
(approximately 3.5%)
Research institute; approximately 300
This means approximately 30% (31 institutes)
of Japan‟s public research and education institutes are
concentrated in Tsukuba.

10. Tsukuba International strategy zone
‘SOGO TOKKU’
Tsukuba is one of seven „International strategy zones‟.
4 Projects are on going.
They are trying to achieve
the visible goal within 5 years.
Life Innovation
Green Innovation
Algal Bio Mass
industrygovernmen
t-academia
MATCHING
Personal Care Robot
Tsukuba Innovation area
for nano-technology

11. Residents Life and Environment of area
in Tsukuba research city
Main characteristics of this area;
Research city → high intelligence researchers and their families are living in
Over 7000 Foreigners → cross cultural environment
Most „Cutting edge‟ research institutes → needs of specific safety management
Around 1980
Re-born to
Neon-lighted city
2005-

12. 5. Case 2 Silicon Valley

13. It grew up around Stanford University
– Stanford’s dean of
engineering and provost
Frederick Terman
• During 1940s-50s:
encouraged faculty and
graduates to start their own
companies.
• after WW2: proposed leasing
of Stanford’s lands for use as
an office park. -> now it is
called Stanford Research Park
• Found venture capital for
civilian technology start-ups

14. Human resource, money, technology and
legal solutions are all there
University
Law
Firm
Venture
Capital
Internet/Soft
ware Industry
Silicon
Valley
Programming/
Service
Industry
Semiconduct
or Industry
Computer
Industry

15. Thank you