In the meantime, the state co-funded the development of a similar McKinsey concept for the Braunschweig region, which has been pursued by the project Region Braunschweig GmbH since early cf. In , that project was finally integrated with the Wolfsburg AG, since Wolfsburg is one of the eight administrative units that make up the Braunschweig region. This section presents case study evidence on those dimensions that have been singled out as relevant for the organising capacity that may ultimately translate into improved regional resilience. Section 2 identified coherence and complexity as the main prerequisites for cluster policies to enhance a region's organising capacity, while governance and institutionalisation were also deemed influential.
On the other hand, cluster orientation was rather interpreted as an outcome, or indicator, as well as maturity which may also have a reinforcing impact. Just like cluster reference, these two dimensions are documented elsewhere Kiese : ff. The governance of regional cluster policy includes aspects of initiation and funding and is a reflection of regional governance structures combined with horizontal and vertical interactions, i.
According to the degree of their involvement, actors may be divided into shareholders and stakeholders see Table 1. By contrast, stakeholders are more loosely involved through e. Since we used substantial public agency as a definitional criterion of cluster policy, it is little surprising that all seven case studies of regional cluster policy are mainly initiated, funded and governed by counties and municipalities.
Looking solely at stakeholders, the cases of Dortmund, kompetenzhoch 3 , hannoverimpuls and Regensburg are purely state-driven. The Wolfsburg AG represents a typical public-private partnership as the cluster management organisation is jointly owned by Volkswagen and the city of Wolfsburg, while the constellations of shareholders are much broader in the mature industrial regions of Braunschweig and Nuremberg, representing tripartite alliances between local government, the business sector, and trade unions.
While there is a clear asymmetry of power with VW setting the agenda in Wolfsburg and Braunschweig, the Nuremberg case is characterised by a lengthy process of consensus building in which the resulting cluster portfolio represents a classical compromise between the three parties involved. Constellation of actors in regional cluster policies.
Source: translated from Kiese : The constellation of actors is linked to the type of economic region and the specific starting conditions and motivations for initiating cluster policies. Cities and regions with strong but declining manufacturing bases typically have stable and established networks of actors, described as the "weakness of strong ties" by Grabher for the Ruhr area.
Further to the scope of actors involved, the participation of trade unions is another feature of cluster policies in manufacturing regions. In the cases of Dortmund, Braunschweig and Nuremberg, trade unions provided critical conceptual impulses for the initiation of cluster policies, but their governance impact was rather limited by shrinking human and financial resources as a result of an eroding membership base cf. Contrasting the scope of actors and the engagement of trade unions, business participation appears unrelated to the type of economic region. As illustrated by VW's dominant role in Wolfsburg and the wider Braunschweig region and the contrasting problems of mobilising firms beyond individual projects in the Hannover case cf.
Kiese b , this rather seems to be a function of soft factors, such as the region's political economy or culture. The cluster policies of Dortmund, Wolfsburg and Central Franconia emerged bottom-up, i. In the other four cases, bottom-up initiative was triggered by incentives from higher governance levels in a counter-current fashion. These top-down impulses include Lower Saxony's Regional Growth Concepts for the regions of Hannover and Braunschweig, a regional development contest "Regionale " in North Rhine-Westphalia for the city triangle cf.
The coherence dimension captures the integration of actors and measures, which can range from a plethora of isolated activities pursued by competing actors to integrated and allencompassing concepts uniting all actors towards a common objective. In this dimension, the seven case studies display considerable variety. While the promotion of biotech, sensor technology and IT security in Regensburg appears independent, connected only by the urban municipality as the key initiator, the similarly decentralised competence initiatives in Central Franconia are at least linked strategically through the regional perspective report.
Coherence is also rather limited in the city triangle of Wuppertal-Solingen-Remscheid, since the three municipalities divided the responsibilities for the five fields of competence, despite the new regional development agency. A medium degree of coherence can be found in the regions of Hannover and Braunschweig, where institutional overlap tended to hamper a fully coherent cluster policy, at least for many years.
However, these restrictions do not apply to the cases of Dortmund and Wolfsburg, which may thus be seen as examples for highly coherent policies. Cluster promotion may rely on single measures or employ a combination of many different instruments, which is captured by the complexity dimension. Since this dimension was used to select the case studies, along with governance and maturity, it is hardly surprising to find relatively complex, i.
As for coherence, the most complex approaches can be found in Dortmund and Wolfsburg where cluster policy is interpreted so broadly that it stretches into the field of urban development and planning. Consequently, Dortmund is referred to as a case of strategic urban development planning by Ziesemer , while Wolfsburg's cluster policy is discussed as a case of urban governance by Pohl When compared to these cases, the complexity of cluster policies in the city triangle, central Franconia and Regensburg appear rather medium.
Contrasting most other dimensions, the institutionalisation of cluster polices appears unrelated to the type of economic region. Indeed, the variety of organisational forms indicates a considerable degree of strategic freedom. In Dortmund, a project team was formed within the municipal administration reporting directly to the Mayor, but after 5 years this was integrated into the city's sizeable economic development office.
Despite the similarity of these approaches, only the Wolfsburg and Braunschweig cases managed to integrate the business sector as shareholders when setting up their agencies as public-private partnerships. Although this is only the most formal form of business engagement in cluster policy, it does suggest that there is ample scope to increase the regions' organising capacity through a greater mobilisation of private sector involvement.
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While dedicated legal entities charged with promoting the development of entire cluster portfolios represent the highest conceivable degree of institutionalisation, decentralised competence initiatives to support individual clusters have been successively formed in the Nuremberg region since Most of them were organised as associations and run by a cluster or network manager.
The weakest forms of institutionalisation can be found in Regensburg and in Wuppertal-Solingen-Remscheid. While Regensburg runs its BioRegio as a municipal limited liability company, its strategic partnerships for sensor technology and ICT security became more strongly institutionalised over time as they were transferred from memoranda of understanding into associations. In the city triangle, cluster policy is implemented in a division of labour between the three municipal economic development units, despite the newly-formed regional development agency Table 2.
While we still know very little about the actual economic impact of regional cluster policies, our case studies provide ample evidence that they do indeed enhance the organising capacity of regions, which we assume to improve regional resilience. In the case of Dortmund , cluster policy led to a significant modernisation and professionalisation of the city's economic development agency. This was achieved through a focus on clusters and project-based work, the accumulation of know-how in the set-up and operation of ten mainly cluster-specific business incubators, as well as the organisation of the start-up contest "start2grow" which was held 31 times between and Although the majority of start-ups supported through these contests were located outside the ICT and microtechnology clusters, and even outside Dortmund, the dortmund-project led to a measurable improvement in the city's entrepreneurship ecosystem.
In a ranking of all German counties and urban municipalities by entrepreneurial activity, Dortmund jumped from bottom to top within the Ruhr area between and and occupied the 58th rank in Stadt Dortmund : 5. Between and , the number of new firm registrations per 1, inhabitants increased by Practitioners and observers from other parts of the Ruhr area have also envied Dortmund's ability to attract public funding for economic development projects over the previous decade, mainly for urban regeneration and incubator facilities.
Although organising capacity is hardly measurable, the ability to attract funding—especially in competitive procedures—may serve as a decent proxy. Based on a pre-existing broad coalition of stakeholders that became known as the "Dortmund consensus" and that had already facilitated the establishment of one of Germany's earliest innovation centres in , the dortmund-project may be seen as another catalyst for the city's organising capacity. In a similar fashion, cluster policy contributed to organising capacity in Wuppertal, Solingen and Remscheid.
Since kompetenzhoch 3. This process contributed to a transformation of regional identities and governance structures that culminated in the formation of the European Metropolitan Region of Nuremberg, which gained official recognition in It also strengthened the region's organising capacity that allowed Central Franconia to attract a disproportionately high share of state government funding, a likely outcome of organising capacity directly comparable to the Dortmund case.
In the case of Hannover , the main impact of cluster policy on the region's organising capacity can be found in the professionalisation of entrepreneurship support and a reduction of institutional overlap. Before the foundation of hannoverimpuls, some 30 regional organisations provided advice to start-ups, which is now much more co-ordinated. Institutional overlap initially increased when hannoverimpuls was set up in , but was then reduced through a holding structure comprising economic development, marketing and tourist promotion in In April , this holding was merged with hannoverimpuls under the latter's name.
In the Braunschweig region, the emergence of various initiatives from the mids can be attributed to the region's strong dependence on the automotive industry and the resulting vulnerability to cyclical downturns cf. These two organisations jointly produced a concept for regional development in As part of this process, the vision of Braunschweig as a region for transport competence emerged cf.
Consequently, there was no need for further analysis, but a clear perception of an implementation deficit in the region's economic development industry cf. The formation of the project Region Braunschweig GmbH in and its most recent integration with the Wolfsburg AG clearly helped improve the region's organising capacity, progressing from producing papers to implementing projects. However, there is still a strong dependence on the region's dominant carmaker VW for funding.
Centre for Evidence-based Policy Advice (IWH-CEP)
It should be stressed though that the link between cluster policies on the one hand and organising capacity or regional resilience on the other is by no means unilateral. As examples of crisis-induced regional cluster policies such as Nuremberg, Dortmund or Wolfsburg illustrate, cluster policies emerged in response to shocks and are thus an indicator and outcome of pre-existing organising capacity e. Cluster policies should therefore not be seen as an independent driver, but as an integral part of the organising capacity of regions.
Kiese : Their popularity is also evident across the seven regional case studies reviewed here. Marking the strong presence of the automotive industry and the related complex of mechanical engineering and process technologies in Germany as a whole, this sector also emerged as a prime target of cluster policies in many regions. Reflecting a certain degree of herd behaviour, the simultaneous promotion of clusters in the same industries and technologies is unlikely to yield competitive clusters in all regions, especially when cumulative effects and first-mover advantages are taken into account.
However, bandwagoning does not lead to a full convergence of cluster portfolios, which still reflect considerable variety across regions according to their previous patterns of specialisation. With regard to resilience, the critical question is to what extent a region's cluster portfolio is likely to foster narrow regional specialisation, unrelated variety based on a diversity of rather different activities, or related variety combining different industries and technologies that share a common knowledge base allowing inter-industry Jacobian knowledge spillovers cf.
Defining clusters as sets of related industries, Porter : argued that a variety of overlapping clusters should lead to a better economic performance of a region than a diverse array of unrelated clusters. His United States Cluster Mapping Project used modified locational correlations to group industries into 41 traded clusters, each comprising about 29 industries on average.
Overlap of clusters sharing the same industries was so common that on average each industry was found to be part of about two clusters. Our data on the cluster policy portfolios of seven German regions does not allow for a distinction between industries and clusters as in Porter's analysis. In addition to a uniform definition of clusters, this would require regional cluster policies to clearly define the boundaries of their target clusters using statistical industry classifications.
In practice, cluster policy portfolios mix industries and technologies without any regard for congruence between the two or their combination to form clusters. In the absence of such data, we are confined to a rather intuitive classification of the seven regions' cluster policy portfolios into the broad categories of specialisation, related variety and unrelated variety.
From the regions' cluster policy portfolios it is evident that none of the case study regions pursues a strategy of narrow specialisation that would undermine their capacity for resistance and recovery. However, it appears possible to classify and rank the regions' varied cluster policy portfolios according their intuitive degree of relatedness, which is listed in descending order in Table 3.
Cluster policy portfolios of regional case studies. Source: based on Kiese : The Nuremberg region's cluster policy portfolio appears to display most relatedness in its variety, mainly due to its emphasis on cross-sectional technologies that may potentially induce substantial spillovers into other industries. The resilience literature would suggest that this benefits the region's capacity for renewal and re-orientation, which it had already proven when the sudden decline of manufacturing employment struck in the early s.
The strong focus on cross-sectional technologies may furthermore reduce Central Franconia's resistance to external shocks. Through the combination of their traditional strengths in the automotive industry and some cross-sectional technologies, such as IT, the degree of relatedness is roughly medium for the three cases from Lower Saxony.
Within this sub-sample, relatedness appears to be most pronounced in the Braunschweig region and clearly less so in Wolfsburg, which is part of the former of course. Beyond relatedness, these three regions show some attempts at diversification into areas which are at first sight unrelated to their core competency in automotive, such as life sciences in Hannover or health, leisure and tourism in Braunschweig and Wolfsburg.
In the case of Wolfsburg, however, attempts at industrial diversification into tourism are led by VW's flagship automotive theme park AutoStadt , attracting around two million visitors per year cf. Wachs , which obviously reinforces the city's automotive cluster. It thus provides a typical illustration of diversification across industries within the same cluster.
At the other end of the scale, the variety exhibited in the cluster portfolios of Dortmund, Wuppertal-Solingen-Remscheid and Regensburg appears rather unrelated. In Regensburg, this unrelatedness resulted from responses to unrelated federal government contests. In Wuppertal-Solingen-Remscheid, unrelatedness reflects a political bargaining process in which each of the three municipalities wanted to have its leading industries included cf. Though regional economic resilience is not part of our empirical investigation, we consider it useful to outline three theoretical assumptions on how cluster policy portfolios could affect regional resilience, based on the four dimensions of resistance, recovery, renewal and re-orientation introduced by Martin Furthermore, we expect this effect to be mediated by the variety of a region's industry structure as shown in Fig.
From a theoretical perspective, specialised regions are likely to particularly promote incremental innovation and process innovation due to the impact of localisation economies as highlighted by Marshall, Arrow and Romer cf. We therefore assume these regions to be more exposed to sector-specific shocks and less likely to recover quickly from a temporary disruption due to the shortage of employment opportunities in other undisturbed sectors cf. In contrast, we expect the opposite for regions characterised by unrelated variety, i.
Hence, unrelated variety may be assumed to protect a region from substantial job losses potentially caused by sector-specific shocks for two reasons. On the one hand, sector-specific shocks are unlikely to disturb the regional economy as a whole, since there are no substantial input-output-linkages between regional industries cf. On the other hand, job opportunities in further undisturbed sectors improve the prospects of a widely efficient relocation of labour cf.
On the one hand, it is argued that the relatedness of industries facilitates the spreading of economic disturbances and consequently impairs a region's resistance to shocks cf. On the other hand, related variety is assumed to support product innovation and radical innovation in particular, as the recombination of knowledge bases from interconnected sectors tends to facilitate the development of new products or technologies cf. Furthermore, we expect this interplay to raise the long-term ability of regions for continuous economic renewal and, if necessary, also re-orientation.
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Linking this background to different types of cluster portfolios eventually leads us to three basic assumptions. First, a narrow cluster portfolio supports economic specialisation and consequently lowers a region's ability to resist and recover from economic shocks. Second, a broad cluster portfolio promotes unrelated variety and consequently enhances a region's ability to resist economic shocks.
Third, a broad and related cluster portfolio stimulates related variety and thereby reduces a region's ability to resist economic shocks, while at the same time enhancing a region's capacity for economic renewal and re-orientation. In this paper, we started from the proposition that cluster policies may contribute to regional resilience by strengthening a region's organising capacity.
We developed a multi-dimensional model of cluster policy, identifying the dimensions that are critical to a region's organising capacity. The contribution of cluster policies to regional resilience depends on the nature of cluster policy portfolios, which may foster greater regional specialisation on the one hand, or greater unrelated or related variety on the other. We then presented evidence from seven case studies of regional cluster policies in Germany to assess how and under what conditions these policies can strengthen a region's organising capacity to ultimately improve its resilience.
Our results show that all cases contributed to organising capacity albeit to different degrees, supported by varying though at least medium degrees of bottom-up governance, coherence, complexity and institutionalisation. However, the majority of cases display a tendency for cluster orientation to decline over time for reasons of political and bureaucratic rationality outlined elsewhere cf.
While it still remains a challenge to measure any causal impact of cluster policies on regional economic performance cf. Kiese , there is multiple evidence that cluster policies do contribute to a region's organising capacity through reinforcing regional governance structures, as well as through a professionalisation and strategic focusing of economic development services.
However, the most successful and mature regional cluster policies build on an already established organising capacity, which make them look like the egg rather than the chicken. We also ranked our case studies according to the contribution of their cluster portfolios to specialisation versus variety, finding different degrees of relatedness that cast some doubts on the usefulness of discrete categories.
However, Central Franconia's cluster portfolio comes closest to promoting related variety, which would increase the region's capacity for renewal and re-orientation at the expense of its resistance to external shocks. On the other hand, three regions were found to promote rather unrelated sets of clusters, which should improve their resistance to external shocks. The widespread decline of cluster orientation during implementation calls for cluster policies to be based on more rigorous and unprejudiced analyses of actual cluster potential.
In practice, many regions indeed targeted policy-driven or even wishful-thinking clusters cf. Enright It would make sense though to recommend clusters as an analytical tool and strategic device for understanding regional economies and organising collective action, rather than as an ideal outcome of economic development efforts—as evident from the world-wide quest to produce the next Silicon Valley cf.
It may help regional cluster policy and practice to include the procedural benefits for organising capacity in their sets of targets, although this is clearly a precondition as much as an end. Similarly, the issue of relatedness and their potential impacts on regional resilience have to date not been taken into account in the design of cluster policies and the selection of cluster portfolios.
For cluster policies to have sustainable impact, constant monitoring and independent including scholarly evaluation is needed to ensure they remain adaptive to gradual and disruptive changes in the environment, whether such changes be social, economic, political or technological.
As often, the research presented here raises more questions than it answers. First, there is still the unresolved challenge to evaluate the actual impact of cluster policies on regional economic performance, including resilience. It is a platform that bundles and structures activities in research, teaching, and policy advice. IWH-CEP pursues the objective of creating better foundations for a causal analysis of policy implemented across different sectors.
IWH-CEP is designed as a service unit and supports the activities in the research groups by providing access to a supra-regional research and policy advising network as well as access to data sets for causal analyses. IWH-CEP lies at the interface between three areas of responsibility and carries out coordination functions between them. The government intervenes in the market mechanism through a lot of policy instruments in order to achieve various economic objectives.
However, for policy makers, it is important to know whether the originally intended objectives are also achieved. Scientific methods can make a significant contribution to this. These are necessary to establish a clear connection between a policy instrument and its effect. Research and policy advice are organized via the different research groups of the IWH. This organizational structure allows to assess policy changes from both a macro and micro perspective and cover different sectors of the economy.
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