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The Effects of Cluster Policy on Innovation

Nesta Working Paper 12/05
Issued: March 2012
JEL Classification: O14, O25, O38, O31
Keywords: Cluster, policy, innovation, evaluation High growth firms, growth process, SVAR, rivalry, firm growth


This paper is part of the Compendium of Evidence on the Effectiveness of Innovation Policy Intervention. It examines the evidence on cluster policy intervention It first reviews the main arguments underpinning cluster policy. It subsequently focuses on a number of recent experiences in supporting clusters across the OECD, and further highlights the challenges associated with the evaluation of these initiatives and available evidence on their outcomes. It then focuses on the evidence of a number of programmes (16) that are selected for closer scrutiny. Finally, some broad implications for policy are drawn, in particular in relation to the need for policies to improve their clarity and focus in their choice of objectives and rationales, the need to allow for evaluation early on in the process, the use of flexible and adapted interventions that are realistic rather than a rigid cluster model, together with a more careful targeting and a better balance between a hands-off approach and direct steering of clusters.

The report draws on available cluster policy evaluation exercises and related academic literature to report on the impacts and outcomes, both soft and substantive, of cluster policy.


Elvira Uyarra, Ronnie Ramlogan

The Nesta Working Paper Series is intended to make available early results of research undertaken or supported by Nesta and its partners in order to elicit comments and suggestions for revisions and to encourage discussion and further debate prior to publication (ISSN 2050-9820). The views expressed in this working paper are those of the author(s) and do not necessarily represent those of Nesta.