What Drives Success For Firms In Innovation Clusters

The last few years have seen a tremendous amount of growth in innovation clusters and ecosystems.  The theory goes that by placing a large number of like minded institutions in one place, innovation will thrive.  Such ecosystems typically contain a mixture of startups, academics, corporates, government agencies and support services such as lawyers and venture capitalists.

Whilst the allure is unquestionable, and the logic intuitive, the evidence to date suggests that such facilities can often do more harm than good, as startups equate membership of these facilities as job done, and their drive to grow is blunted.

A recent paper from researchers at the University of Copenhagen explores what factors contribute to success in such innovation ecosystems, and can these factors be cultivated by those who run such clusters?

Finding success in a cluster

The paper identifies a number of things that cluster managers can do to encourage innovation among residents in the cluster.  These include:

• Stimulate network formation – managers can stimulate the growth of formal and informal networks by sharing details about various local assets in their region, including talent, logistics or connections.
• Facilitate connections – they also advocate cluster managers taking a more active ‘matchmaking’ role, especially between companies and research institutions. This is a valid point, as most research into barriers to university/business collaboration points to time issues on the academics side, and cultural issues on the corporate side. Having a trusted intermediary can help to overcome both.
• Attract a diverse pool of residents – both of these points are enhanced if the cluster consists of a wide range of participating organizations.

“The more innovative assets in the cluster and the better their networking and heterogeneity, the better the national and international competitiveness of the cluster initiative and participating companies will turn out,” the authors say.

Of course, you might argue that many of these things are rather stating the obvious, which is a conclusion I could have some sympathy with.  The authors also openly admit that their work was restricted to Germany, but the findings seem so intuitive that it’s hard to imagine that they wouldn’t apply elsewhere.

It’s quite possible that despite the recommendations being very intuitive, actually performing them well remains easier said than done.  In that sense, hopefully the paper will provide some support for those attempting to do just that within innovation clusters.