Country report: United Kingdom

Introduction

This report has been written as a part of the Europe INNOVA Cluster Mapping Project. One part of the project is a mapping of cluster policies, cluster institutions and cluster programmes in European Countries. For each country, a separate report has been written. Oxford Research AS in Nor- way has been responsible for the mapping of cluster policies. Oxford Research has developed the structure of the mapping and prepared the final reports. Most of the work has however been done by research institutes or consultancies in the different countries. These organisations are members of “The European Network for Social and Economic Research – ENSR” or partners in the Europe INNOVA Cluster Mapping Project. Based on the national reports, the main findings have been summarised by Oxford Research in a separate report. The Europe INNOVA Cluster Mapping Project has been financed by the European Commission. The views expressed in this report, as well as the information included in it, do however not necessarily reflect the opinion or position of the European Commission and in no way commits the institution.

Kristiansand, Norway, December 2007.

Harald Furre Managing director Oxford Research AS

Please find more information about the Cluster Mapping Project and the Authors of this report on: www.clusterobservatory.eu www.oxfordresearch.eu www.ensr-net.com

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Report written by: Gabriel Mas The Cluster Competitiveness Group, UK E-mail: [email protected]. Telephone: +34 669 86 55 03

Main ministries responsible for Finance/ Science/ Trade/ Interior Other implementing cluster policy Economy Research Industry x Key agencies responsible for Office of Science and Technology (OST), The small Business Service (SBS), The implementing cluster policy Secretary of State for the Environment, Transport and the Regions (DETR) Is cluster Yes No x policy their only task?

Are there any national cluster Yes x No Number of 2 programmes? programmes Are there any regional cluster Yes x No 21 programmes?

Source of financing National programmes Regional programmes National ministries x x EU structural fund x Regional budget x Business x Other x

Importance of cluster policy Low Medium High National level x Regional level x Policy papers on national level Yes x No Cluster policy over time Increased impor- Reduced importance Shifted tance x Since when has cluster policy been used? 1990-95 1995-2000 2000-05 2005- x Cluster development related to a particu- Yes x No lar person/organization? Individual Business org. Political party x Agency Research inst. Successful cluster programmes Scottish Food and Drink

Is there a cluster or Yes No A general council exists competitive council? x Degree of obstacles when No/Low Medium Important building cluster policy x General assessments of competitiveness? Yes x No

Role of clusters as framework in policy areas Low Medium High Business network policy x FDI attraction policy x Export promotion policy x Sectoral industry policy x Science and education policy x Competition and marked integration x Source: Oxford Research 2

1 Terminology

In each country there will be one or possibly several terms or phrases used to de- scribe clusters. In some cases, different terms represent “competing” perspectives on clusters and, as perspectives change over time, one term may gradually replace an- other. In UK there are at least four ways of describing clusters. • The UK Governments Department of Trade and Industry (DTI) defines clusters as concentrations of competing, collaborating and interdependent companies and institutions, which are connected by a system of market and non-market links. • Invest Northern Ireland defines clusters as geographic agglomerations of firms in the same or closely related industries. • Scottish Enterprise defines clusters as a group of industries and organisa- tions linked by a common goal or practice’. It is assumed that clusters are national models. • The Welsh Assembly’s Department of Enterprise, Innovation, and Net- works defines cluster as industries linked through vertical (buyer/supplier) or horizontal (common customers, technology, channels) relationships

Sources: United Kingdom Department of Trade and Industry; http://www.dti.gov.uk/ Invest Northern Ireland; http://www.investni.com/ Scottish Enterprise; http://www.scottish-enterprise.com/ Welsh Assembly Government’s Department of Enterprise, Innovation, and Networks; http://new.wales.gov.uk

2 Cluster development programmes and cluster organisations

In many countries, there are programmes set up specifically to promote cluster de- velopment. Such programmes can be carried out by existing actors (for example a government agency), or new actors can be set up to run them. Often, one of the purposes of such programmes is to help initiate cluster organisations, that is, the programme provides financing or otherwise promotes the formation of cluster- specific organisations, typically in some form of public-private partnership. A coun- try can have many (even hundreds) of such cluster-level organisations in operation.

2.1 Agencies for cluster policy implementation in the UK The Department of Trade and Industry (DTI) is the United Kingdom’s government branch responsible for, among other things, cluster policy. However, much of the responsibilities of the DTI have been transferred to regional authorities. DTI's ap- proach to regional policy is designed to build the capability of regions, putting greater emphasis on growth within all regions and strengthening the building blocks for eco- nomic success and boosting regional capacity for innovation and enterprise. The DTI's cluster policy is to generate stable conditions that foster the development of clusters, but not to artificially create them. Through recognizing that clusters are

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unable to operate in isolation. Four cross cutting themes were identified as being essential to cluster development: • Role of Higher Education Institutions (H.E.I’s) • Encouraging H.E.I’s to work with Office of Science and Technology (OST) who are responsible for knowledge transfer and exploiting funding programs for the exploitation of science. A report entitled Higher Educa- tion and Business Collaboration for Success details the collaboration be- tween HEI’s and business sectors. • Skills • The Department of Education and Science (DfES) and the DTI jointly published a report entitled Skills Strategy in 2003. This details how the Government, employers and industries can develop a demand-led educa- tion system to increase the regional level of skills. The report also identifies the need for raising skills and innovation in clusters. New services have been set up e.g. Learndirect and the Learning Skills Council. • Access to finance • The Small Business Service (SBS) was created to help small companies to access finance more easily. • Planning • DETR published Planning for Clusters in 2000, this lad to the review of the planning system carried out by the Office of the Deputy Prime Minis- ter (ODPM), and resulted in the publication of the Planning Green Paper published in 2001.

Regional Development Agency In the UK, Regional Development Agencies were developed under the Regional Development Agencies Act in 1998, due to the need for decentralisation in order for the work of the DTI to be performed on a regional basis. The RDA’s adopted cer- tain powers from the Government to perform its purposes of regional development. In addition the act permitted Ministers the right to delegate any part of their func- tions to their RDA. The RDA’s became responsible for: • Developing and reviewing the economic development strategies • Following the strategies to achieve outcomes. The Secretary of State was responsible to provide guidance on: • Any issues in the strategy formulation, adoption and revision • Determining the financial duties of the RDA • Subject to conditions and with approval of the Treasury, provide Gov- ernment grants, • and loans and overdrafts to allow the RDA to perform its duties. The RDAs were to design collaborative projects to engage the various actors in clus- ters to encourage innovation activity and knowledge transfer between the companies, universities, industry experts, training organisations, business associations and ven- ture capitalists. The devolution process, initiated in the 1990’s, has given increased competencies, but in different ways, to the Northern Ireland, Scottish, and Welsh “home nations” 4

These home nations have development agencies which report to their respective Assemblies, not the UK Department of Trade and Industry. The RDA’s, in turn, all report to the DTI (with the exception of the London Development Agency, which reports to the London Greater Authority). Northern Ireland follows a similar structure as the other English regional develop- ment agencies. It reports to the UK Department of Enterprise, Trade, and Innova- tion.

Development Agencies of Home Nations: • Invest Northern Ireland: Supports business growth and inward invest- ment, promotes innovation, research and development and in-company training, encourages exports and supports local economic development and company start. It is reports to the Northern Ireland Department of Enterprise, Trade, and Investment • Scottish Enterprise: The main economic development agency for southern and eastern Scotland, with 12 Local Enterprise Companies. Has incorpo- rated actions from the White Paper, particularly encouraging collaboration between the Government, Businesses and Higher Educational Institutes and ensuring public investment in research. Its strategy is outlined by the Scottish Executive’s ‘A Smart, Successful Scotland’. • Highlands and Islands Enterprise Network: Consists of the main body, Highlands and Islands Enterprise, based in Inverness, and nine Local En- terprise Companies. HIE's activities include: provision of business support services, delivery of training and learning programmes, assistance for community and cultural projects and measures for environmental renewal. These activities are primarily delivered by nine Local Enterprise Compa- nies.1 The agency does not appear to have an explicit cluster policy. The

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HIE Network’s economic development strategy is in line with the Scottish Executive's 'A Smart, Successful Scotland'. • Welsh Assembly Government’s Department of Enterprise, Innovation, and Networks. The Assembly Government supports the development of industry-led sector strategies where appropriate and engages in more gen- eral development work with sectors, clusters and broader groupings – for example, manufacturing or the rural economy. Regional Development Agencies of England: • Advantage West Midlands: Advantage West Midlands has a clear cluster development strategy. In 2002, ten clusters were identified to be led by private steering groups. In 2004 they developed three year plans and were allocated a budget. • East Midland’s Development Agency: The agency states that “We've helped set up cluster organisations to support our high performance clus- ters in motor sports, food, textiles, healthcare, creative industries and aerospace. We're currently undertaking a cluster review. This will feed di- rectly into the review of the Regional Economic Strategy.2” • East of England Development Agency: The EEDA has identified cluster development as an important way to support the accelerated growth , productivity, and competitiveness of the region’s businesses. • London Development Agency: The LDA has identified three key clusters for its economic development. These clusters are Brokering and Fund Management (influence of financial services on the city), Air Transport (primarily at Heathrow), and Cinema and Television (the growing creative arts and media sectors). • Northwest Regional Development Agency: The agency states that “De- veloping clusters is vital to the growth of the regional economy, creating jobs and adding value through the application of innovation and entrepre- neurship across the North West. We need to develop our creativity and competitiveness and so build a powerful and dynamic economy. The Clus- ter programme which the Agency is implementing with its industry part- ners is a major step in this direction.” In 2001 the agency announced that it would invest ₤24 million on cluster development projects. In particular, it would be invested in the aerospace, biotechnology, chemicals and ICT/New Media sectors • One Northeast: Believes that “Innovation will enable clusters of globally competitive manufacturers and service businesses to succeed in new mar- kets, with investment in research and development, a focus on design and marketing, and development of intellectual property, and regional compa- nies continually seeking higher value added product niche opportunities” • South East England Development Agency: SEEDA’s priority is to en- courage increased networking and collaboration among businesses located in potentially strong regional clusters such as biotechnology and media. SEEDA’s £1.2M Cluster Fund now has seven cluster projects up and running with a further ten projects under development. Further cluster activity along with the dissemination of the cluster projects will continue.

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The aim is to have between 12 and 15 SEEDA-supported clusters running in the South East during 2003/04. • South West of England Development Agency: The South West RDA has identified eight priority clusters for specific intervention, which have been selected because they are either strategically important for the region and would benefit from some targeted assistance, they are going through ma- jor transitions and need assistance to meet the challenges of that change, or they are small at the moment, but offer real opportunity for future growth in the region • Yorkshire Forward: Yorkshire and Humber is at the forefront of the clus- ter theory of economic development, actively investing in key business sectors to accelerate economic growth and encourage higher value added business. Yorkshire Forward has identified nine clusters that it believes will deliver economic growth in the future. These are Advanced Engineer- ing and Metals, Bioscience, Chemicals, Digital Industries, Food and Drink, Healthcare Technologies, and Environmental Technologies.

Sources: Advantage West Midlands; http://www.advantagewm.co.uk/business.html East Midlands Development Agency; http://www.emda.org.uk/supportingbusiness/supportclusters.asp East of England Regional Development Agency, A Shared Vision, The Regional Economic Strategy for the East of England Highlands and Islands Enterprise; http://www.hie.co.uk/about-us.html London Development Agency; http://www.lda.gov.uk/server/show/nav.001002003 Northwest Regional Development Agency; http://www.nwda.co.uk/SimpleContent.aspx?news=1&area=72&subarea=73&item=20029171709061135&yr=2001 One North East, Leading the Way, Regional Economic Strategy 2006 - 2016 Scottish Enterprise; The Framework for Economic Development in Scotland, Scottish Executive, 2004 South East England Development Agency, Board Meeting on July 16, 2003, Item 9: Sectors and Clusters; http://www.seeda.co.uk/about_seeda/board_members/board_meetings/papers/july2003/july2003- 9sectorsclusters.doc South West of England Development Agency; http://www.southwestrda.org.uk/sectors/index.shtm - Welsh Assembly Government, Wales: A Vibrant Economy, Yorkshire Forward; http://www.yorkshire-forward.com/www/view.asp?content_id=113&parent_id=37 DTI, Regional Economic Development: http://www.dti.gov.uk/regional/regional-development/index.html United Kingdom Parliament; http://www.publications.parliament.uk

2.2 National cluster programmes There are several national programmes for cluster development in the UK. Please see below for a general outline of these programmes: 1) Programme name: Innovation Society Initiative • Financing: • Source of programme financing (ministries, EU structural funds, re- gional budgets, etc): Department of Trade and Industry • Budget: ₤68 million • Time horizon: 1996-2000 • Actors:

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• Programme initiator: Secretary of State of the UK Department of Trade and Industry (DTI) • The Innovation Society Initiative (ISI) has its own program director who reports to DTI and responsible solely for this project. The po- sition was created in 1996. • The initiative cooperates with other government departments, across sectors, and with the EU, G7 and OECD. • Scope and target: • Geographic coverage: United Kingdom • Policy focus: Science and Technology Policy • The initiative was aimed to support an embryonic sector, innovation society, which was relatively weak compared to other European countries. • Programme contents: • One of the stated objectives of the initiative was to ensure that SMEs in all sectors of the UK economy improve their competitive- ness by utilising effectively all elements of information society. • The ISI was seen as a major DTI initiative brigading a number of programmes together under an ICT umbrella to provide a coherent range of activities in this area. The initiative would be evolutionary and flexible to avoid getting locked into activities, which in the light of experience were seen to be redundant, or irrelevant because of technological or commercial changes. A structured phased approach for implementation was proposed. • The priority areas: networks, goods and services, equipment, SW and systems, and particularly awareness building and best practice distribution for users and suppliers, application and demonstrating capabilities’ development, and adaptation and acquisition of tech- nology. • As a horizontal policy measure, the programme targeted all busi- nesses that could benefit from usage of information society tech- nology. • Level of R&D involvement: moderate; it attempted to bridge the gap from existing technological developments and businesses in the UK. • No financial support or training to the projects • The programme benchmarks progress against EU, and OECD standards. • Process: • Based on appointments • Top down approach • Evaluation: • The objectives in the ISI were aspirations and some of these were outside the scope of ISI activities. Most of the objectives were met, although it was difficult to identify and attribute the impact of the ISI. The annual benchmarking study helped in assessing the pro- gress of the UK and other countries in taking up ICT. The objec- tives given for awareness and best practice for users and suppliers were largely met. The objectives for developing applications and 8

demonstrating capabilities, and adaptation and acquisition of tech- nology, were only partly met as some of the objectives were outside the scope of the ISI • Planned future: Not stated

Source: Strategic Evaluation of the Information Society Initiative 1996-2000

2) Programme name: UK Business Clusters – A First Assessment • Financing: • Source of programme financing: UK Office of Science and Tech- nology • Budget: Not stated – Not entirely applicable as it is an assessment rather than a policy implementation program. • Time horizon: N/A • Actors: • Programme initiator: UK Office of Science and Technology • Carried out by Cluster Policy Steering Group • The actor was formed for this purpose in 1999 • The actor does not have other tasks apart from this programme • The Cluster Policy Steering Group was a ministerial level committee led by the Minister of Science. It brought together UK government officials, regional development agencies, academics, local govern- ment officials, private sector, and cluster experts. • Scope and target: • Geographic coverage: United Kingdom • Policy focus: Regional Policy • The mapping report classifies the different clusters throughout the UK in different categories (embryonic, emerging, mature, declining). • Programme contents: • The Report identified 154 clusters in the United Kingdom, repre- senting between 8 and 18 per UK region. The report groups the in- dustries making up the clusters in terms of interrelatedness, and also in terms of linkages with higher education institutions. • Activities – what are the prioritised areas?: As mentioned, the report identifies 154 clusters throughout the United Kingdom. Because it is a general mapping report, it encompasses a wide range of types of clusters, and it does not identify particular areas that are to be worked developed. It is left to the Regional Development Agencies to specify policy actions for the clusters identified in the report. • Ambitions/goals: The goal of the mapping project was to create the first UK-wide systematic study of existing clusters. This formed part of the strategy of the UK Clusters Policy Steering Group to identify barriers to cluster development and recommend appropriate new policy initiatives to Cabinet. • Target group: • No particular focus on SMEs • Level of R&D involvement: Low

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• The Programme is purely informational, and is aimed at assisting regional development agencies, i.e. it does not offer special aid to projects. • The programme is interregional within the United Kingdom • Process: • Top-down approach, based on a specific criteria • Evaluation: • Results so far/conclusions from evaluations: No evaluation has been yet been done. It is the responsibility of the Regional Devel- opment Agencies to evaluate progress in the clusters identified in this report. • Planned future: Since the results of the report were published, clus- ter policy is increasingly being taken forward at a regional level. There have been a number of RDA and DTI organised workshops and conferences aimed at increasing awareness of clusters and pro- moting best practices.

Source: Department of Trade and Industry, Business Clusters in the UK – A First Assessment

2.3. Regional cluster programmes Programme name: The Medical Technologies Opportunity Group • Financing: • Source of programme financing: Advantage West Midland’s Re- gional Budget • Budget: 1,089,000 Pounds (1,604,291 Euro) • Time horizon: 2006-2008 • Actors: • Initiator: Advantage West Midlands Regional Development Agency • Carried out by: Medical Technologies Cluster Opportunity Group (further: MTCOG) • The actor was formed for this purpose in 2004 and does not have other tasks apart from this programme • MTCOG includes private and public members. It is chaired by a board of 14 members of which 7 are from private and 7 from public sector. • Scope and target: • Geographic coverage: West Midlands • Policy focus: Industrial and enterprise policy • Embryonic stage cluster • Programme contents: • MTCOG reviews annually the strategic priorities for the cluster companies and oversees how these priorities should be translated into projects which the cluster funds from its allocated budget. • The objective of the MTCOG is to “match industry need to market opportunity”. In order to reach it, 4 areas have been identified: di- versification, innovation and product development, market access and procurement, and market intelligence. 10

• By 2008, the MTCOG should be able to develop and implement a single project that offers a range of financial support to companies in the cluster. • Target group: • The medical technologies cluster contains companies that operate in the market for any instrument, apparatus, appliance, material or other article, whether used alone or in combination, including the software necessary for its proper application, intended by the manu- facturer to be used for human beings. The supply chain and the NHS are recognised as important actors. • 80% of the companies are SMEs, but no specific strategy is set up for SMEs. • The cluster involves R&D institutions and supports R&D for ex- ample by creating a concept fund that fast tracks selected innova- tions, by identifying “Innovation Champions” to persuade key clini- cians test products and/or lead clinical trials or by creating a re- gional award to encourage university researches commercialise their ideas. • The cluster has some cross-country activities. In particular, it works closely with the UK Trade and Investment (UKTI) through a “Passport to Export” scheme which provides business opportuni- ties and guidance to potential exporters. • Process: • Based on appointments, selected according to companies’ ability to make strategic decisions on behalf of all the industries in the cluster. • Top down approach, based on cluster research • Evaluation: • Not yet conducted, but in 2008, a series of financial assistance guidelines has been foreseen to be established for cluster compa- nies.

Sources: Advantage West Midlands, The Medical Technologies Interim Cluster Plan; http://www.advantagewm.co.uk/downloads/medical-technologies-3-year-plan-.pdf Advantage West Midlands, Cluster Opportunity Group – Terms of Reference; www.wmictcluster.org/library/ictcog/ict_cog_tor.doc

Programme name: London Life Sciences Strategy and Action Plan • Financing: • Source of programme financing: London Development Agency Funds and EU Structural Funds where appropriate • Time horizon: 2003-2007 • Actors: • Programme initiator: Greater London Authority • Carried out by: London Development Agency • The actor was not formed for this purpose and has other tasks apart from this programme, such as infrastructure development, market- ing and promotion.

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• The project is managed directly from the London Development Agency, however a Life Sciences Leadership Group has been cre- ated to ensure that the appropriate balance is achieved and fragmen- tation is avoided. • Scope and target: • Geographic coverage: London Greater Area • Policy focus: Industrial and Enterprise Policy • The cluster is identified as being at an embryonic level of develop- ment. • Programme contents: • The goal of the programme is to develop a commercial life sciences cluster around London’s world class knowledge base. • Priority actions are those with a clear and compelling need to act; where the action addresses a market failure; where the partners in- volved display the capacity and willingness to move; where the ac- tion can work at an efficient scale. • Amongst foreseen actions are for example: bio incubators’, grow-on facilities’ and science parks’ construction; cluster pro- motion to those outside the existing networks; work with the inward investment teams in London and Invest in UK; support collaboration projects between London’s research base and companies; establish or support a seed fund. • Prioritised areas are therapeutics with a high level of knowledge and a significant number of new start-up companies with high growth potential; contract research organisations with a critical mass of skills; and biomedical engineering with strong knowl- edge base in supporting areas and the presence of some manu- facturing companies. • One of programmes’ actions plans includes helping institutions to offer their skills and facilities to external organisations, espe- cially companies. • Target group: • Life Sciences sector, which includes companies that use modern biological, bio manufacturing or bioinformatics to develop products or services, as well as the associated support organisations such as biosciences departments, medical schools, hospitals, medical re- search institutions and charities. • The programme can offer up to 750,000 pounds in financial sup- port to cluster companies in addition to business-related education and training. • No cross-country/interregional activities • Process: • Based on appointments • Top down approach • Evaluation: • In 2006, only the advisory aspect of the plan was behind schedule.

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• The London Greater Authority will place emphasise on an “Bio- London Pavilion” to showcase the level of expertise in the Life Sci- ences sector.

Sources: London Development Agency, London Life Sciences Strategy and Action Plan http://www.lda.gov.uk/server.php?show=ConWebDoc.311 London Development Agency, Q3 Self Assessment 2005- 2006 http://www.lda.gov.uk/upload/doc/LDA_Self_Assesment_Q3_2005-2006.DOC

Programme name: Production Industries in London, Strategy and Action Plan 2006-2008 • Financing: • Source of programme financing: London Development Agency Budget • Budget: ₤ 15 million • Time horizon: 2006-2008 • Actors: • Programme initiator: Greater London Authority • Carried out by: London Development Agency (LDA) • The actor was not formed for this purpose and has other tasks • In 2004, four working groups were established by commission members, manufacturers and partner organisations to oversee the development and implementation of the action plan. LDA provides them with a secretariat and project managers whose task is to ensure that the action plan is implemented effectively and monitored regu- larly. • Scope and target: • Geographic coverage: Greater London Area • Policy focus: Regional Policy • A declining cluster • Programme contents: • The goal of the programme is to ”strengthen the competitive per- formance of the established manufacturing base and improve op- portunities for its retention in London. • The key strategy is to build on existing support for manufacturers. New initiatives are introduced only where there are identified gaps in current provision. • The programme approaches actors in the following markets: medium sized firms that have the capacity and desire to imple- ment change; sub-sectors; those that demonstrate growth po- tential (viability of company and of products), regardless of size or sub-sector. • Target group: • SMEs are the main target market for the strategy, 89% of the sector and the programme is aimed specifically at improving the competi- tiveness of SMEs. • Level of R&D involvement: low

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• The programme offers training services to SMEs, advises to intro- duce best manufacturing practices, processes and technologies, and best practice visits. • The strategy does call to closely cooperate with the National Manu- facturing Strategy Implementation, and to also work with other Re- gional Development Agencies if there is a possibility for joint ac- tion. • Process: • Based on appointments • Top-down approach • Evaluation: • The project has not yet been evaluated. It will be conducted accord- ing to the performance indicators identified by the UK National Manufacturing Society. These indicators cover output (showing the level of value added), investment (showing levels of new invest- ment), innovation (using R&D expenditure as a proxy for total pro- ductivity), productivity (using labour productivity as a proxy for to- tal productivity), and skills (showing qualifications held at different levels of the workforce). • Planned future: Some actions are already well advanced, others re- quire more developmental work before they can be fully imple- mented

Source: London Development Agency, Production Industries in London, Strategy Action Plan 2005 – 2008 http://www.lda.gov.uk/upload/pdf/PI_in_London.pdf

Programme name: The Regional Innovation Strategy for Northern Ireland • Financing: • Source of programme financing: UK Department of Enterprise and Trade • Budget: Not Stated • Time horizon: 2004-2006 • Actors: • Programme initiator: The Department of Enterprise and Trade (DETI) • Carried out by: Invest Northern Ireland • The actor was not formed for this purpose and has other tasks apart from this programme • A departmental board consists of officials from DETI, from Invest Northern Ireland and from Northern Tourist Board. • Scope and target: • Geographic coverage: Northern Ireland • Policy focus: Science and Technology Policy • Targeted clusters are embryonic • Programme contents: • Northern Ireland does not have a critical mass of innovative com- panies, and Business Expenditure on R&D is decreasing. The main objective of the programme is to create a culture and environment 14

within which Northern Ireland will prosper by using its knowledge, skills, and capacity to innovate. • The Regional Innovation Strategy (RIS) includes the collaboration of the Government, industry, education and academia, R&D, skills development, creativity, innovation and commercialisation. • Due to the predominant number of SME’s and development of col- laborations between universities and companies, the Further Educa- tion sector has a definite role to play in creating a skilled and flexible workforce. • Target group: • Higher Education Institutions and SMEs • Level of R&D involvement: high • The programme does not offer financial support or training for the time being; it is designed to create specific strategies for the future. • The programme has some cross-country/interregional activities. In- ternational benchmarking will also play a major part, in order to create a global knowledge base with the UK, EU and worldwide. The intention is to benchmark Northern Ireland’s innovation sys- tems against plausible comparisons and exploit a mutually beneficial cross-regional partnership to become globally competitive. • Process: • Based on applications or appointments?: N/A • Top down approach • Main elements in applications if that is used: N/A • Evaluation: • After the RIS was published, Northern Ireland has tried to keep the innovation polices linked with the national innovation policy devel- opments, as they influence the objectives and implementation of the RIS future plans. • The priorities are now to create a coherent R&D and innovation in- frastructure in Northern Ireland; enhance the use of R&D and in- novation by the private sector; develop a culture of innovation and enterprise; sustain the regional innovation network.

Source: The Department of Enterprise, Trade, and Investment, The Regional Innovation Strategy for Northern Ireland, 2004 - 2006

Programme name: Scottish Tourism: The Next Decade • Financing: • Source of programme financing: Scottish Assembly Government • Budget: Not stated • Time horizon: 2006-2016 • Actors: • Programme initiator: Scottish Enterprise • Carried out by: Scottish Enterprise • The actor was not formed for this purpose and has other tasks apart from this programme

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• Directed by Enterprise Ireland in cooperation with VisitIreland, monitored by ECOTEC Research and Consulting. • Scope and target: • Geographic coverage: Scotland • Policy focus: Regional Policy • Targeted cluster is mature • Programme contents: • The goal of Scottish Enterprise is to keep pace with global trends over the next 10 years through economic and environmental sus- tainability. • Amongst the actions can be mentioned: the creation of a tourism research network involving the industry, culture, and heritage or- ganizations, the enterprise agencies, academics, local authorities, and VisitScotland; the creation of a development and training action plan; ₤1.2 Billion of direct investment in affordable housing over 2 years; e-technology introduction to all actors; a national transport strategy considering all modes of travel and the needs of everyone. • The prioritised areas of the programme are: innovation, product de- velopment, destination development, and business leadership. • Target group: • Entire Tourism Sector • No particular focus on SMEs • Level of R&D involvement: low • A special organisation was created to provide training in the areas of management and leadership, and workforce skills. • No cross-country/interregional activities • Process: • Based on appointments • Top down approach • Evaluation: • Evaluation of results set to be released in 2007. The evaluation has 14 concrete targets that are to be reached. These • Planned future: An Implementation Group is to oversee the pro- gress of the action plan on an annual basis, and adjustments are made accordingly. There is no specified future beyond 2007

Source: Scottish Assembly Government, Scottish Tourism – The Next Decade http://www.scottish-enterprise.com/publications/scottish_tourism__the_new_decade_- _a_tourism_framework_for_change.pdf

Programme name: Micro & Opto Electronics, Cluster Review & Strategy • Financing: • Source of programme financing: Scottish Enterprise Budget • Budget: Not Stated • Time horizon: 1999-2010 • Actors: • Programme initiator: Scottish Enterprise • Carried out by: Scottish Enterprise 16

• The actor was not formed for this purpose and has other tasks apart from this programme. • Programme is organised an implemented by Enterprise Scotland in close cooperation with the universities and research institutions of the area. • Scope and target: • Geographic coverage: Scotland • Policy focus: Regional Policy • Targeted cluster is mature • Programme contents: • The goal of the strategy is to grow competitive and sustainable in- dustries based on innovation, which enhance and exploit the re- search, design and development capabilities of businesses, research institutes and universities in Scotland • Amongst the actions: the creation of intermediary technology institutes to provide market-driven and demand-led funding for commercially focused R&D; creation of fellowships to increase the number of spin-out companies from higher education insti- tutions and to support potential entrepreneurs as they attempt to start-up new technology businesses; creation of proof of concept fund to support the pre-commercialisation of leading- edge technologies emerging from Scotland’s universities, re- search institutes, and NHS trusts. • Target group: • Public and private actors in the microelectronics and optoelectron- ics sector • No particular focus on SMEs • Level of R&D involvement: very high; the cluster strategy focuses on fostering R&D and encouraging commercialisation of research. • The programme offers financial support through fellowship pro- grams. • No cross-country/interregional activities • Process: • Based on appointments • Top down approach • Evaluation: • The cluster strategy was launched in 1999, and since then there have been several successful actions that have been implemented, such as: • The Institute for System Level Integration (ISLI) now has the largest dedicated system on chip centre in the UK; a complete Scottish supply chain for diode pumped solid state lasers for defence and other applications is now in place – 5 years ahead of schedule; the industry celebrated its first listing in four years; the number of indigenous design companies has more than doubled, and the number of designers engaged in R&D has raised nearly two thirds.

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• The strategic goals set forth in 2005 for 2010 are to build critical mass in key market areas, strengthen local an international net- works, develop a workforce for the future, increase global competi- tiveness, and promote company creation, growth, and sustainability in Scotland.

Source: Scottish Enterprise, Micro & Opto Electronics Cluster Review and Strategy http://www.scottish- enterprise.com/publications/moct_review.pdf

Programme name: Northwest Regional Economic Strategy • Financing: • Source of programme financing: Northwest Regional Budget • Budget: ₤45 billion • Time horizon: 2006-2026, with a focus on 2006-2009 • Actors: • Programme initiator: Northwest Regional Economic Development Agency • Carried out by: Northwest Regional Economic Development Agency, with the assistance of a Regional Advisory Group of the private, public and voluntary/community sectors • The actor was not formed for this purpose and has other tasks apart from this programme, although the Regional Advisory Group’s re- sponsibility is to solely oversee the development of the strategy and make modifications if necessary. • Regarding regional sectors, the clusters are lead by cluster organisa- tions funded by the North West Regional Development Agency • Scope and target: • Geographic coverage: Northwest Region • Policy focus: regional policy, outlining broad measures • Targeted clusters are mature • Programme contents: • The main objective is to create a dynamic, sustainable international economy which competes on the basis of knowledge, advanced technology and an excellent quality of life for all. • The prioritised areas are: biomedical, energy and environment, ad- vanced engineering, food and drink, digital and creative industries, business and professional services. • Target group: Knowledge based, widely traded companies that have international growth potential. • No particular focus on SMEs at the programme level, but the indi- vidual cluster strategies may consider SMEs significant in their sec- tors. • The strategy does outline R&D initiatives, but not specifically inter- twined with the cluster policy. No specific actions are outlined. • The strategy does not outline financial support or training programs for the clusters. • The programme has no cross-country/interregional activities. • Process: 18

• Top down approach, based on the significance of the clusters to the Northwest economy • Evaluation: • A formal evaluation is to be released in 2009. The evaluation will be based upon gva growth, job creation, firm formation, reduction of no qualifications, increase in graduate qualifications, employment

rate, reduction in deprivation, and reduction in CO2 emissions • Planned future: Not stated

Source: Northwest Regional Development Agency, Regional Economic Strategy http://nwda-cms.amaze.co.uk/ResourceImages/RES06v2.pdf

Programme name: Chemicals Northwest • Financing: • Source of programme financing: Northwest Regional Development Agency • Budget: Not stated • Time horizon: From 2000 onward • Actor: • Programme initiator: Northwest Regional Development Agency (NWDA) • Carried out by: Chemicals Northwest • The actor was formed in 2000 to be the cluster manager for the chemical sector, and it does not have other tasks apart from this programme. • Chemicals Northwest is an industry-led non-profit chemical cluster support organisation created as part of the NWDA’s Cluster Devel- opment Programme. • Scope and target: • Geographic coverage: Northwest Region • Policy focus: Science and Technology Policy • Targeted cluster is mature • Programme contents: • Chemicals North West aims to improve the sustainability of the in- dustry for the long term. • The 4 key activity areas are: skills (to ensure that the level of exper- tise in the industry remains high), sustainable development (to en- sure that the chemical industry continues to meet the needs of the present without compromising the ability of future generations to meet theirs for example by increasing the efficiency of the supply chain interactions), innovation (to provide practical solutions to drive innovation in all areas of business, bringing together key groups from academia and industry), and image (through networks, employees, media, local communities, schools, public bodies, and MPs). • Target group:

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• Industrial manufacturers, distributors & traders, representative bod- ies, training providers, educational institutions, business & profes- sional services organizations • There is a special program for SMEs through advise and business support. • Level of R&D involvement: high; many of the programs involve cooperation with Higher Education in order to foster innovation and R&D in the sector. • The program offers several training programs and financial support for specific projects. • The programme works closely with other regions in the United Kingdom, particularly with universities and research institutions. • Process: • Based on applications • Top down approach, based on a report by the Chemistry Leader- ship Council • Main elements in applications if that is used: Basic application, re- questing activity of the company, size, and small fee. • Evaluation: Not yet published • Planned future: Not stated

Source: Chemicals Northwest http://www.chemicalsnorthwest.co.uk/main/template.asp?sectionid=19

Programme name: Yorkshire Regional Economic Strategy • Financing: • Source of programme financing: mostly regional budget, but also some EU structural funds • Budget: ₤331.65 Million, of which ₤107.78 Million is destined to driving business innovation, enterprise, and growth of key clusters • Time horizon: 2006-2015 • Actors: • Programme initiator: Yorkshire Forward • Carried out by: Yorkshire Forward • The actor was not formed for this purpose and it has other tasks apart from this programme. • The Strategy was created and is to be implemented by Yorkshire Forwards • Scope and target: • Geographic coverage: Yorkshire and Humber • Policy focus: Regional Policy • The strategy encompasses numerous clusters of all stages of devel- opment • Programme contents: • The strategy has six objectives: more businesses that last; competi- tive businesses; skilled people benefiting business; connecting peo- ple to good jobs; transport, infrastructure, and environment; stronger cities, towns, and rural communities. 20

• The prioritised areas (clusters) are: digital industries, food and drink, advanced engineering and metals, chemicals, bioscience, environ- mental technologies, and healthcare technologies. • Amongst the activities for the chosen clusters are: facilitate inte- grated work within each cluster incorporating activity on networks, skills, investment/investor development, innovation, enterprise, supply chains, trade, e-business and ICT adoption, employment, in- clusion, physical infrastructure, resource efficiency and environ- mental opportunities, marketing, etc.; promote process and product innovation in businesses across the region; stimulate social enter- prise (including linking them into supply chains). • No particular focus on SMEs at the strategy level, but the involve- ment of SMEs is determined at cluster level • The strategy does highlight the importance of R&D and increasing the linkages between the private sector and higher education institu- tions, but it does not relate this to cluster policy. • Financial or training assistance are determined by cluster policies • No cross-country/interregional activities • Process: • Top down approach • Evaluation: • There has not yet been a formal evaluation • Planned future: NN

Sources: Yorkshire Forward, Regional Economic Strategy http://www.yorkshire-forward.com/asset_store/document/corporate_plan_2005-10_full_135212.pdf

Programme name: Food and Drink Cluster for Yorkshire Forward • Financing: • Source of programme financing: Yorkshire Forward Budget • Budget: Not Stated • Time horizon: 2006 - 2010 • Actors: • Programme initiator: Yorkshire Forward, following the Regional Economic Strategy • Carried out by: Yorkshire Forward • The actor was not formed for this purpose and does have other tasks apart from this programme • Run directly by Yorkshire Forward, in close collaboration with pri- vate sector • Scope and target: • Geographic coverage: Yorkshire and Humber • Policy focus: Industrial and Enterprise Policy • Targeted cluster is mature • Programme contents: • The goal is to be the innovation and enterprise region of choice for new, emerging, and established food and drink businesses.

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• Examples of activities promoted through the cluster: promote the benefits of the region in emerging, niche market which can deliver margin benefits over traditional categories, through establishing clear, knowledge links between academia and industry; regional co- ordination of a targeted dietary awareness and education pro- gramme that will be integral to the Olympic legacy post 2012, and provide a healthy and sustainable workforce to help deliver eco- nomic growth as well as providing new commercial opportunities associated with health eating; promote innovation to avoid being lost in a sea of amorphous fascias, through product and packaging innovation. • The prioritised areas are: breweries, seafood processing, and ethnic foods. • Target group: All businesses involved in the production of food and drink in the Yorkshire Humber region. • No particular focus on SMEs • There is no strategy designed specifically for augmenting R&D • The programme offers businesses support to market food products internationally, with legislation, access to several grants, and with innovation and technology transfer (linkages to academia) • No cross-country/interregional activities • Process: • Based on appointments • Top down approach • Evaluation: • Since April 2005, the cluster work has resulted in 497 new jobs, 427 safeguarded jobs, 41 new businesses, 765 businesses supported, and 443 learning opportunities. It has exceeded the target goals. • The future strategy focuses on exploiting the following opportuni- ties: expanding the food and drink sector in the international mar- ket, focus on the emergence of new food and drink sectors, focus on the health living agenda, and increase consumer interest in food and drink provenance.

Source: Yorkshire Foward, http://www.foodyorkshire.co.uk/asset_store/document/food_&_drink_strategy_for_yorkshire_&_humber_153018.pdf

Programme name: One Northeast, Regional Economic Strategy 2006-2016 • Financing: • Source of programme financing: One Northeast (Regional Budget) • Time horizon: 2006-2016 • Actors • Programme initiators: The strategy was endorsed by the North East Assembly, the Association of North East Councils, the Learning and Skills Council, the Northern Business Forum, the North East Health Forum, Voluntary Organisations Network North East, Cul- ture North East, and One NorthEast • Carried out by: One NorthEast

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• The actor was not formed for this purpose and it has other tasks apart from this programme • Scope and target: • Geographic coverage: North East England • Policy focus: Regional Policy • Targeted clusters are declining and embryonic • Programme contents: • The goal of the regional economic strategy is to make North East England a region where present and future generations have a high quality of life and that the region exceeds/reaches UK average gross value added per head by 2016. • The strategy focuses on the following areas: • Promoting and encouraging start-ups • Provision of high quality and appropriate information, advice and guidance to companies; improving skills for business; the future of business support; specialist sector based support; spe- cialist issue based support; utilising information and communi- cations technology, access to finance in the North East; global opportunities – increasing exports and attracting and embed- ding companies within the region’s economy. • Enabling the transition to a more innovative economy through developing business capacity and excellent design; hubs for in- novation; structural change delivered through the energy and environment, healthcare and health sciences, and process indus- tries. • The prioritised areas are: chemicals and pharmaceuticals, automo- tive, defence and marine, food and drink, energy, knowledge inten- sive business services, commercial creative, tourism and hospitality, and health and social care. • Target group: • SMEs are a central part of the strategy. • Is there a particular focus on SMEs? Yes, SMEs play an important role in the strategy • Level of R&D involvement: High, R&D is encouraged through numerous grants and linkages with local universities • Financial support is offered through numerous programs: access to selective finance for investment, research and development grants, loans and equity funds. • No cross-country/interregional activity, but the programme outlines international best practices. • Process: • Based on appointments • Top-down approach, based on research • Evaluation: • The strategy has just been developed, and no evaluation has been done yet

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• Planned future: An annual evaluation will be conducted by the de- velopment agency, and it will make any necessary adjustments to the strategy

Source: One North East, Regional Economic Strategy, http://www.onenortheast.co.uk/lib/liReport/9653/Regional%20Economic%20Strategy%202006%20-2016.pdf

Programme name: North East Chemicals Vision and Action Plan • Financing: • Source of programme financing: One North East (Regional Budget) • Budget: Not stated • Time horizon: 2004 - 2012 • Actors: • Programme initiator: One North East, in accordance with the Re- gional Economic Strategy • Carried out by: North East Chemistry Leadership Council (NECLC) • The actor was formed for this purpose in 2004 and it does not have other tasks apart from this programme • The NECLC represents the regional industry at regional, national, and international levels. It is supervised by One England. • Scope and target: • Geographic coverage: North East England • Policy focus: Industrial and Enterprise • Targeted cluster is mature • Programme contents: • The report focuses on three areas: Trade and Investment (regional promotion, development of a targeted marketing approach, clarify- ing public actors’ roles); Innovation, R&D (facilitate collaboration between industry and academia for product creation, process devel- opment or new ways of doing business), Skills Development (com- munication on national and regional initiatives, consolidating actors into a smaller number of larger specialised providers or association type providers); Manufacturing Excellence and Productivity (identi- fying the current baseline situation and existing world class per- formance) • Activities – what are the prioritised areas?: Attraction of a skilled workforce and regional manufacturing excellence; strengthening of activities through seamless industry and public sector initiatives to implement lean manufacturing practices, improvement of manufac- turing excellence and support innovation; new bulk petrochemical investments will be attracted to consolidate and support existing ac- tivities based on the value of access to the EU and cluster linkages. • The North East chemical cluster will be recognised as a site of sub- stantial commercial growth by strong, clear leadership and excel- lence in its skills base, R&D, manufacturing excellence and targeted support. This success will be built on raising the region’s interna-

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tional profile among existing companies, potential investors, and the next generation of entrepreneurs and talented personnel. • Target group: • Petrochemical sector, pharmaceuticals and specialties, supply coat- ings and materials, and specialty chemicals • Is there a particular focus on SMEs? Yes, as outlined above • Level of R&D involvement: Yes, this plays a central role, as out- lined above • The strategy does not offer financial support of training programs • Some cross-country/interregional activities: The North East Chemical Leadership Council has developed the cluster strategy in collaboration with Yorkshire Forward, and the North West Eco- nomic Development Agency. • Process: • Based on appointments • Top-down approach • Evaluation: • No evaluation has been done

Source: One North East, http://www.onenortheast.co.uk/lib/liDownload/2054/025rep.doc?CFID=4779336&CFTOKEN=11386419

Programme name: The Innovation and Technology Council • Financing: • Source of programme financing: West Midland Region Budget • Budget: Not stated • Time horizon: 2004 onward • Actors: • Programme initiator: Advantage West Midlands • Carried out by The Innovation and Technology Council. • The actor was formed for this purpose in 2004 • The actor does not have other tasks apart from this programme • The role of the Science and Technology Council is to advise Advan- tage West Midlands’ Board by providing business and academic leadership. It tries to shape decisions regarding investment in tech- nologies and their exploitation. • Scope and target: • Geographic coverage: West Midlands’ • Policy focus: Science and Technology Policy • Are clusters in a certain stage of the lifecycle targeted (embryonic, emerging, mature, declining)? N/A • Programme contents: • What – give a short description: • Support to universities to commercialise research • Vision Works: A programme offering infrastructure for entre- preneurs • Grants for Research and Development. 25

• ₤250k to ₤1m funding to established technology-led busi- nesses. • Activities – what are the prioritised areas?: The prioritised areas are: • Helping businesses to continue innovating and developing products • Increasing the number of business that are investing in innova- tion and exploiting R&D intensive opportunities. • Ambitions/goals: To reinvigorate the West Midlands’ economy by exploiting emerging, innovative technologies in existing and new globally competitive businesses • Target group: • Medical and Healthcare Technologies, Digital Media, Advanced Ma- terials, Transport Technologies, and Energy • No particular focus on SMEs • Level of R&D involvement: Very high, it is the focus of the pro- gramme • What does the programme offer the projects? (i.e. financial support, training): Research and development grants, advice to people think- ing of starting a business, lobbying to national agencies, and gov- ernment bodies, for funding • Does the programme have any cross-country/interregional activity?: It works with the National Technology Strategy Board, The Higher Education Funding Council for England, and the European Union. • Process: • Based on applications or appointments: N/A • Top-Down approach • Main elements in applications if that is used: N/A • Evaluation: • Results so far/conclusions from evaluations: • Planned future: The strategy will be used as a framework in the ap- plication of European funding. Its ongoing development of the in- novation strategy will also influence the development of the Re- gional Economic Strategy

Source: West Midlands Innovation and Technology Council, http://www.advantagewm.co.uk/introducing-the-west-midlands-innovation-and-technology-council.pdf

Programme name: Supporting Technological Development and Business In- novation • Financing: • Source of programme financing: EU Structural Funds • Budget: ₤ 362m • Time horizon: 2007 - 2013 • Actors: • Programme initiator: East Midlands Development Agency • Carried out by East Midlands Development Agency • The actor was not formed for this purpose

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• The actor does have other tasks apart from this programme • The East Midlands’ Development agency acts as a facilitator for companies to receive EU Structural funds • Scope and target: • Geographic coverage: East Midlands, with a focus on Nottingham, Derby, Leicester, Lincoln, Lincolnshire, Derbyshire Peak District, North Nottingham, and North Derbyshire. • Policy focus: Industrial and Enterprise Policy • Targeted clusters are declining • Programme contents: • The region is eligible for funding under the Competitiveness and Employment strand of the successor Structural Funds Programmes. The allocation for the East Midlands is approximately £362 million. • Activities – what are the prioritised areas?: Foster an Innovation Culture; Facilitate Technology Transfer; Enable Business Innova- tion; Maximise the Benefits of the ICT Revolution. It is aimed to support projects in the most disadvantaged areas of the region. • Ambitions/goals: Encourage businesses to be more competitive by being innovative and making better usage of information and com- munications technology. • Target group: • Engineering, Food & Drink, Healthcare Industries, Creative Indus- tries, Clothing & Textiles, Environmental • Is there a particular focus on SMEs? Emphasise to target knowledge intensive, high growth and added value SMEs. In declining clusters, an emphasis is placed on enabling SMEs to become proactive in developing new technologies • Level of R&D involvement: The purpose of the project is to incite investment in R&D • The programme offers the projects financial support • The programme does not have any cross-country/interregional ac- tivities • Process: • Based on applications • Top Down approach, based on the Regional Economic Strategy • Main elements in applications if that is used: Project Details, Or- ganisation info and partners involved, Need and demand for pro- ject, Details of project implementation, Strategic fit, Eligibility, Ex- pected outputs and outcomes as a result of project, Costs and fund- ing details, , Risk Assessment, Availability of other options, Delivery arrangements, Project Activities, • Evaluation: • No evaluation has been done • Planned future: Not stated

Sources: East Midlands Development Agency, http://www.emda.org.uk/erdf/newmini/esf.asp?selected=04

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Programme name: The East Midlands Clothing and Textiles Cluster • Financing: • Source of programme financing: East Midlands’ Development Agency • Budget: Not stated • Time horizon: 2002 onward • Actors: • Programme initiator: East Midlands’ Development Agency • Carried out by East Midlands Clothing and Textile Cluster • The actor was formed for this purpose in 2002 • The actor does not have other tasks apart from this programme • The programme was initiated by the East Midlands’ Development Agency, and managed by the East Midlands Clothing and Textile Cluster. The cluster cooperates with Government Offices Midlands, trade associations, trades union, academic institutions, and other in- dustry related organisations. • Scope and target: • Geographic coverage: East Midlands Region • Policy focus: Industrial and Enterprise Policy • Targeted clusters are mature • Programme contents: • The proposed actions of the cluster are: • Global Trading: encourage flexible trading structures which em- brace home manufacturing and sourcing that can balance the re- quirements of cost, volume, quality, product innovation and speed to the market. • Fast-Turn/Niche Markets: Encourage flexible, highly responsive multi-seasonal businesses that gain market access through enhanced knowledge of market segmentation, design and product develop- ment. This will lead to employment growth in the long-term with development of highly serviced products/brands, particularly fash- ion and niche markets. • Textile Innovations: Through technically advanced products and processes, the cluster will optimise new market opportunities that build on the cluster’s core strengths across related industries. • Activities – what are the prioritised areas?: Global Trading; Fast- Turn/Niche Markets; Textile Innovations • Ambitions/goals: The East Midlands will house a dynamic, flexible, market led and internationally competitive clothing, textiles and footwear cluster. • Target group: • Is there a particular focus on SMEs? Yes there has been. Five hun- dred SMEs have benefited from the creation of the Designer Fo- rum in Nottingham. The cluster will augment its focus on SMEs • Level of R&D involvement: Low • The programme offers the projects some business training

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• The programme does not have any cross-country/interregional ac- tivities • Process: • Based on appointments • Top-down approach • Evaluation: • Results so far/conclusions from evaluations: The cluster has re- sulted in the investment by the regional government in a ₤350,000 Designer Forum in Nottingham. This provides incubator units, business advice and a technology hub that makes digital media equipment available. Several programs have been launched to suc- cessfully help companies to become exports. • Planned future: The cluster will allocate more resources to help SMEs become more competitive.

Source: Cluster for the East Midlands Textiles, Clothing, and Footwear Industries http://www.emcat.org.uk/?c=901

Programme name: East of England Regional Economic Strategy • Financing: • Source of programme financing (ministries, EU structural funds, re- gional budgets, etc): Regional Budget and EU structural funds • Budget: Not Stated • Time horizon: 2004 - 2021 • Actors: • Programme initiator: East of England Regional Assembly • Carried out by East of England Regional Development Agency • The actor was not formed for this purpose • The actor does have other tasks apart from this programme • The East of England Regional Assembly issued the strategy report, which was conducted by the East of England Regional Develop- ment Agency. The implementation of actions are delegated to nu- merous agencies throughout the region. • Scope and target: • Geographic coverage: East of England • Policy focus: Regional Policy • Targeted clusters are embryonic and mature • Programme contents: • What – give a short description: Policies to strengthen the regional clusters include: Creation of an innovation centre; strengthening of links between enterprise and the knowledge base; supporting net- works and skills initiatives for specific sectors; overseeing interna- tional alliances; inter-regional initiatives • Activities – what are the prioritised areas: Sectors that are important in delivering the vision of the regional economic strategy and sec- tors that are otherwise important for the strength of the regional economy

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• Ambitions/goals: A leading economy, founded on its world-class knowledge base and the creativity and enterprise of its people • Regarding cluster policy, the goal is to build on the region’s com- parative advantage on research and development • Target group: • Biosciences, Automotive industry and Motorsport, Construction, Energy, Lifesciences, High-technology manufacturing and advanced engineering, food and agriculture, environmental goods and ser- vices, creative and cultural industries, finance and business services, high-tech manufacturing and advanced engineering, ICT, public sector modernisation, tourism, and transport gateways • No particular focus on SMEs • Level of R&D involvement: All of the clusters were chosen in rela- tion to their capability of increasing competitiveness with improve- ments in R&D • The programme does not directly offer either financial support or training, but it outlines the need to establish R&D grants • The programme proposes making synergies with other clusters in the UK where there is the need • Process: • Based on appointments • Top-Down approach • Evaluation: • An evaluation is currently taking place based on a survey • Results so far/conclusions from evaluations: Thus far, the results show that little progress has been made to achieving the strategic goals set out by the programme. • Planned future: The planned future will announced upon the com- pletion of the revision process

Source: East of England Development Agency, Regional Economic Strategy http://www.eeda.org.uk/files/A_Shared_Vision_full(3).pdf

Programme name: East of England Energy Group • Financing: • Source of programme financing: East of England Development Agency and the private sector (based on membership fees) • Budget: • Time horizon: • Actors: • Programme initiator: East of England Development Agency • Carried out by East of England Energy Group • The actor was formed for this purpose • The actor has no other tasks apart from this programme • Created by the East of England Development Agency in accor- dance with the regional economic strategy. The cluster is a public- private organisation, as fee is required to participate.

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• Scope and target: • Geographic coverage: East of England • Policy focus: Industrial and Enterprise Policy • Targeted cluster is mature • Programme contents: • Some actions that have been implemented thus fare include: • Building a community of partners who are deciding how they want to cut their emission of CO2 to meet a target of 60% re- duction by 2025 • Sustainable Energy Business Network: Brings together key or- ganisations from government and industry and will take a lead- ing role in energy strategy and economic business development in the East of England. • Pushing Offshore Wind Energy Regions: the project discusses and assesses environmental issues of offshore wind farms, the development of a reliable regional supply chain for the offshore wind sector, and skills development issues. 24 organisations take part, with representatives from Germany, the UK, Den- mark, the Netherlands and Belgium. • Activities – what are the prioritised areas?: Skills issues, Supply Chain Development, International Trade, New Business Opportu- nities, and Innovation and Technology • Ambitions/goals: to stimulate, promote and be a catalyst for the development of a world class energy sector, based in the East of England, capable of competing in a global marketplace • Target group: • Commercial organisations working with the energy industry or its supply chain, who generate some or all of their global turnover from operations based in the East of England, upon which a mem- bership fee is based. • No particular focus on SMEs • Level of R&D involvement: Low • The programme acts more as a networking arena and a way to align objectives • The programme does have some cross-country/interregional activi- ties, through the Pushing Offshore Wind Energy Regions described previously • Process: • Based on applications and membership fee • Top down or bottom-up approach in selection of clusters to sup- port?: N/A • Main elements in applications if that is used: Basic company infor- mation • Evaluation: • No evaluation has been done • Results so far/conclusions from evaluations: • Planned future: Not stated

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Source: http://www.eeegr.com/membermaster/t_member_apply.php

Programme name: Regional Economic Strategy for South West of England • Financing: • Source of programme financing: South West of England Assembly • Budget: • Time horizon: 2006 - 2015 • Actors: • Programme initiator: South West of England Development Agency • Carried out by South West of England Development Agency • The actor was not formed for this purpose • The actor does have other tasks apart from this programme • The South West of England Regional Development Agency dele- gates responsibilities of the different sections of the strategy to the appropriate regional government body • Scope and target: • Geographic coverage: South West of England • Policy focus: Regional Policy • Targeted clusters are of varied nature • Programme contents: • Regarding the area Successful and competitive business, the key priorities are: • Support Business Productivity • Encourage New Enterprise • Deliver Skills for the Economy • Compete in the global economy • Promote Innovation • Activities – what are the prioritised areas?: Successful and competi- tive business (investment, enterprise, skills, competitive environ- ment, innovation); Strong and inclusive communities, Effective and confident region • Ambitions/goals: South West of England will have an economy where the aspirations and skills of our people combine with the quality of our physical and cultural environment to provide a high quality of life and sustainable prosperity to everyone • Target group: • ICT, Advanced Engineering and Aerospace, Food and Drink, Tour- ism and Leisure, Marine Technologies, Creative Industries, Bio- technology, Environmental Technology • SMEs are dominant players in the region and the policy actions are incorporate this segment of the economy • Level of R&D involvement: High, in varied capacities for the dif- ferent areas of the strategy • The programme offers different aid to the projects depending on the cluster at hand • The programme does not have any cross-country/interregional ac- tivities 32

• Process: • Based on appointments • Top down approach • Evaluation: • Not yet completed • Results so far/conclusions from evaluations: • Planned future: An exhaustive evaluation will be conducted in 2009, and modifications to the plan of action will be made accordingly

Source: http://download.southwestrda.org.uk/file.asp?File=/res/general/RES2006-2015.pdf

Programme name: RegenSW • Financing: • Source of programme financing: South West Regional Development Agency • Budget: Not stated • Time horizon: Not stated • Actors: • Programme initiator: South West Regional Development Agency • Carried out by South West Renewable Energy Agency • Was the actor formed for this purpose, and if so, when? : Not stated • Does the actor have other tasks apart from this programme?: No it does not • The project is fully funded by the South West of England Devel- opment Agency, but managed by RegenSW. • Scope and target: • Geographic coverage: South West England • Policy focus: Industrial and Enterprise Strategy • Targeted cluster is mature • Programme contents: • What – give a short description: The organisation helps develop all aspects of the cluster by: • giving independent advice to decision makers • acting as a sounding board for developers • offering business advice to renewable energy projects of re- gional or national importance • gathering market intelligence • stimulating an informed public debate about renewable energy • Activities – what are the prioritised areas?: N/A • Ambitions/goals: to increase the amount of high quality renewable energy projects on the ground; to secure short-term growth by sup- porting business in the renewable energy sector; to position the re- gion for long term economic growth by developing early leadership in renewable energy technologies • Target group:

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• Project Developers (companies, landowners, farmers, foresters, and individual entrepreneurs) ; manufacturers, equipment suppliers, con- tractors and consultants; companies and not-for-profit bodies; local community groups; elected members and officials of local and na- tional government • No particular focus on SMEs • Level of R&D involvement: Low • The programme offers the projects training, advice, and market re- ports • The programme does not have any cross-country/interregional ac- tivities • Process: • Based on applications • Top down or bottom-up approach in selection of clusters to sup- port?: N/A • Main elements in applications if that is used: Subscription to the mission statement. It is free of charge, as organisation is fully funded by the development agency. • Evaluation: • Results so far/conclusions from evaluations: No evaluation has been conducted • Planned future: Not stated, dependent upon the review of the eco- nomic strategy in 2009

Source: South West Renewable Energy Agency, http://www.regensw.co.uk/

Programme name: South East England’s Sector Consortia • Financing: • Source of programme financing: South East of England Develop- ment Agency • Budget: ₤250,000 per year, in addition to funding received from grants, commercial sponsorship and business contributions • Time horizon: Not Stated • Actors: • Programme initiator: South East of England Development Agency • Carried out by South East England’s Sector Consortia • The actor was formed for this purpose in 2005 • The actor does not have other tasks apart from this programme • The sector consortium is the collective name for six companies formed in 2005 by business people in South East England. The consortium is funded by the South East of England Development Agency. • Scope and target: • Geographic coverage: South East of England • Policy focus: Regional Policy • Targeted cluster is mature • Programme contents: 34

• Within the region’s economic development work, the Sector Con- sortia are positioned as the regional focal point for their sectors and the primary conduit for South East of England Development Agency’s investment in priority sector. The consortia connects the businesses with the policy markets, business support organisations, researchers and investors who can help whose businesses improve their performance • Ambitions/goals: To enable South East England’s companies win more business and be more profitable • Target group: • EnviroBusiness, Marine, Media, Aerospace, Health Technologies, Built Environment Sectors • No particular focus on SMEs • Level of R&D involvement: Low. The consortia does consist of re- searched who help form policy measures • The programme allows for the possibility to influence gov. agencies • The programme does not have any cross-country/interregional ac- tivities • Process: • Based on appointments • Top down or bottom-up approach in selection of clusters to sup- port?: N/A • Evaluation: • Results so far/conclusions from evaluations: Examples of some of the achievements in 2005 include: • Secured capital grant funding for the waste recycling sector • Completed a scoping study for the creation of a Knowledge Trans- fer Network for the energy sub-sector • Secured a pioneering investment in shared marine manufacturing facilities to offer smaller firms access to state-of-the-art production processes • Influenced the National Aerospace Technology Programme • Launched the South East Media Network Council • Commissioned a scoping project to set the scene for a Knowledge Network for the digital content sector in the South East • Initiated the South East Biotechnology Advisory Service • Planned future: Not stated

Source: South East England’s Sector Consortia, Annual Report for 2005/2006 http://www.seeda.co.uk/Publications/Business_&_International/docs/SectorConsortiaAnnualReport2005-06.pdf

Programme name: A Winning Wales • Financing: • Source of programme financing: Welsh Assembly Government, EU Structural funds, and donations.

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• Budget: For the entire economic development plan, ₤1.5 billion from EU Structural funds (2000-2006) and ₤ 3 billion from private, public, and voluntary organisations. • Time horizon: Not stated • Actors: • Programme initiator: Welsh Assembly Government • Carried out by sub-regional governments • The actor was not formed for this purpose • The actor does have other tasks apart from this programme • A Winning Wales, a document prepared by the Welsh Assembly, laid out the economic development and cluster policy, but it is to be implemented by the sub-regions. • Scope and target: • Geographic coverage: Wales • Policy focus: Regional Policy • Targeted clusters are of varied nature • Programme contents: • The policies described in the Government Strategy are to be applied in each sub region. Spatial Plan groups have been established to im- plement the local development projects on behalf on the Assembly. • The framework for economic development policy not only includes sector strategies, but it was also to coincide with other economic factors e.g. health, the environment and education The sectors fit in to the action plan through having the support to allow companies to develop through encouraging businesses to become more com- petitive • Activities – what are the prioritised areas?: Improving the knowl- edge, research and development, and innovation capacity, manufac- turing, financial and business services, green economy, international trade, social enterprise sector. • Ambitions/goals: to Modernise the industrial structure of the Welsh economy to ensure that Wales has a higher share of employment in high-growth, high-skill and high value-added industries and occupa- tions, and moves up from the assembly-line branch-factor economy. • Target group: • Automotive, Aerospace, Agri-food, High technology, Pharmaceuti- cals/Bio-chemicals, Financial Services, Creative Industries, Con- struction, Tourism, and Social Care • Is there a particular focus on SMEs? Yes there is, but not explicitly stated in the cluster policy. • Level of R&D involvement: High • What does the programme offer the projects? (i.e. financial support, training): It offers financial support and training in numerous ca- pacities, but it is the sub-regions that will implement these tasks • Do the programme have any cross-country/interregional activity?: No it does not • Process: • Based on appointments 36

• Top down approach • Evaluation: No evaluation has been completed yet • Planned future: Not stated

Sources: http://new.wales.gov.uk/docrepos/40382/4038231141/40382112561/228730?lang=en

2.4 Successful cluster programmes Launched in 1999, Scottish Food & Drink is an industry-led strategy which sets am- bitious targets for growth by 2010: grow sales of food and soft drinks from £4.2 bn to £7.4 bn treble exports to £1.5 bn increase value-add from £1 bn to £2.5 bn in- crease manufacturing employment from 48,000 to 54,000 It sets out a clear vision for the future: “Scottish Food and Drink industry is thriving internationally, with an un- rivalled reputation for high quality, natural products which are completely in tune with international consumer tastes. Industry and supporting organisations operate in a climate of trust and mutual respect, with strong linkages across the cluster - be- tween farmers, fishermen, processors and customers. The whole industry is pulling in one direction, with a culture of innovation, and investment in people, processes and marketing. These changes attract ambitious young people into a vibrant industry”. To achieve the targets, there are six strategic goals: Develop and grow leading processors of food and drink Exploit the premium retail and foodservice markets of the UK and Europe Grow advantage through innovation and exploiting technology Develop an efficient supply chain Develop the capabilities of our people Communicate the need for collaboration And two key areas for focus: Excellence in raw materials (especially meat and fish) Value-added meal components (retail and foodservice) The strategy is supported by Scottish Executive and facilitated by Scottish Enterprise, with many other public and private sector organisations helping industry to deliver. It is led by an Industry Strategy Group with membership from key industry players. At a practi- cal level, Scottish Food & Drink helps individual businesses and industry groups grow and take advantage of UK and international market opportunities. Although the programme is set to be completed in 2010, there are indications that it has been successful. The outstanding performance of the industry over the last few years parallels the launch and implementation of the strategy. A review of progress at the half-way stage shows that from being an industry in decline before the strategy was launched, strong growth has been experienced since then, with the industry out- performing manufacturing in Scotland and the economy as a whole. The food sector has delivered positive gross value add (GVA) growth in 14 out of 18 quarters since the strategy was launched in 1999. It consistently outperforms the economy and the manufacturing sector, exceeding manufacturing in 15 out of 18 of the quarters covered, and the total economy in 12 of the quarters covered. A particular focus has been on establishing an industry that can work together – one that shares best practices and co-operates to achieve a competitive advantage in the marketplace. It aims to promote strong linkages across the cluster – between farmers, fishermen, processors and customers, with the whole industry pulling in one direc- tion with a culture of innovation and investment in people, processes and marketing. It has concentrated on helping the industry to achieve growth and increase produc- tivity through cost efficiencies, adding value and targeting market opportunities which will give the greatest returns. Source: http://www.scottishfoodanddrink.com/view_item.aspx?item_id=7180 http://www.competitiveness.org/cid/ciview/69/ 37

2.5 Published policy papers In December 1998, clusters were initially identified as an important area of economic development in the UK Governments Competitiveness White Paper entitled Our Competitive Future – Building the Knowledgeable Driven Economy. The paper dis- cussed a study in the Biotechnology Clusters and stated most of the identified issues and recommendations were also apparent in other sectors. Most importantly the White Paper states that the devolved administrations in Scotland, Wales and North- ern Ireland, will direct the new policies outside England. The report also recommends that the national policy issues in the UK should carry forward a scheme similar to that of the United States, by having a Small Business Innovation Research Scheme (SBIR). The recommended actions were premises and incubators, and the need for effective networks. Following the Competitiveness White Paper the DTI launched the Innovation Soci- ety Initiatives with a number of projects shown in the table below. The budget given by the Government was £20 million. In response to the targets set in the Competitiveness White Paper, the DTI estab- lished three more targets to be achieved by 2002: • 1.5 million SMEs to adopt external communications technologies • 1 million SMEs to be trading over the internet SMEs to performance to the same level as other companies in G7 in relation to in- formation and communication technologies The House of Commons were worried about how the new initiates were to be im- plemented in line with the existing projects, the proposed Small Business Service, new regional organizations (RDAs) and the Devolved Assemblies. The launch dates were later detailed in a Competitiveness White Paper Implementa- tion Plan, which was to monitor the agendas set by DTI in December 1998. The DTI were to follow the progress of implementing the E-Commerce initiatives and indicate how the plans were to be coordinated with regional and national bodies (RDAs and Governments). In addition it was required that the Small Business Ser- vice was to be included within the implementation plans, and details of how the ini- tiatives were to be evaluated. Source: United Kingdom Parliament. http://www.publications.parliament.uk/

Main aim of the state in the design of cluster policy

Cluster policy is on of the core means towards economic development, as indicated by the fact that cluster policy is usually embedded in the regional economic devel- opment strategy documents. Initially, with the publication of the 1998 White Papers, cluster policy was intertwined with innovation strategy. This, however, has since evolved. There is some anecdotal evidence that cluster policy may be a greater priority for the Labour Party than the Conservative one: • Cluster policy began when Lord Sainsbury led the Clusters Policy Steering Group in 1998. Lord Sainsbury was a member of the Labour party. • Cluster policy began shortly after Tony Blair’s election 38

• Regional cluster policy is strongest in those regions led by socialist gov- ernments In 1998, Clusters were initially identified as an important area of economic develop- ment. This was identified in the UK Governments Competitiveness White Paper entitled Our Competitive Future – Building the Knowledgeable Driven Economy Source: http://www.desenvolvimentosustentavel.pt/document/competitiveness_white_paper_executive_summary.txt http://www.desenvolvimentosustentavel.pt/document/competitiveness_white_paper_executive_summary.txt

3 Cluster policies

Above the level of agencies and programmes is the policy level. On the policy level, plans and strategies are developed in the form of policy documents, directives and legislation, rather than concrete programmes and organisations. There may be one overarching policy for clusters, a “cluster policy”, outlining spe- cifically how cluster development should be pursued. In addition, clusters may form a framework in a long range of policy fields. Primarily, this is often the case in three key areas: innovation and technology policies, regional economic development pol- icy, and entrepreneurship/SME policy. However, it can also occur in many other policy areas.

3.1 Overarching cluster policy Cluster policy is very important on a national and regional level. Research conducted by the UK Department of Trade and Industry (DTI) recognized that clusters have a significant role in motivating economic development in localities, cities and regions. In summary, clusters build an environment where innovation develops and produc- tivity expands. The DTI aimed to establish a consistent policy that encouraged clus- ter development, to make a major contribution to increasing the innovation perform- ance of the UK. The DTI's cluster policy is to generate stable conditions that foster the development of clusters, but not to artificially create them. There are no regulations for implementing the cluster policies, however the DTI provides a practitioners guide to provide a roadmap for cluster development, re- searched by a consulting agency ECOTEC. This provides the fundamental polices to be adopted by the Regional Development Agencies (RDA), which has been imple- mented with revised versions for the Devolved Agencies. The RDAs are the facilitators to develop the clusters through supportive policy in- terventions. However, the RDAs have the power to reinforce a development strategy that corresponds to their regions strengths, capabilities and requirements for change. Therefore there are regional variations in the strategies across the RDAs. It is the responsibility of the individual Secretary of State to ensure their strategy is line with the policies set by the DTI and the agendas match the capacity of the region. The key aspects to cluster strategies are: • Mobilisation – generating an interest and participation in the cluster • Diagnosis – identifying and defining the cluster and establishing the strengths and weaknesses of the cluster

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• Collaborative strategy – identifying the actions required to provide the de- velopment of the cluster • Implementation – implementing the actions • Assessment – monitoring and evaluating the strategy.

Source: Department of Trade and Industry, http://www.dti.gov.uk/regional/regional-development/index.html

3.2 Clusters as framework in various policy areas Clusters also play a different role as a framework in the different policy areas listed below : Innovation and technology policy Science and Technology policy is less decentralised than economic development pol- icy. The UK Department of Trade and Enterprise, via the Office of Science and In- novation, is responsible for innovation and technology policy. It is responsible for funding basic research allocated via the Research Councils. Research Councils are the main public investors in fundamental research in the UK covering a wide range of disciplines including bio-medicine, particle physics, the environment, engineering and economic and social research. RCUK works to support the UK’s finest academic researchers to ensure the best investment of public money in scientific research ex- cellence. The research councils consist of appointees made by the Secretary of State for Trade and Industry, who is answerable to parliament for the Councils’ activities. There are eight research councils: • Biotechnology & Biological Science research Council (BBSRC); • Council for the Central Laboratory of the research Councils (CCLRC); • Engineering & Physical Sciences Research Council (EPSRC); • Economic & Social Research Council (ESRC); • Medical Research Council (MRC); • Natural Environment Research Council (NERC); • Particle Physics & Astronomy Research Council (PPARC) • Arts and Humanities Research Council (AHRC) The Office for Science and Innovation has the following policy orientation: • Investing with the Research Councils in research, research infrastructure, training, careers and knowledge transfer; • Promoting international partnerships in research, science and technology, that help achieve UK policy objectives; • Improving the use of science across Government to inform policy and de- livery; • Preparing for the future through horizon scanning and foresight; • Working to create a society that is confident about the development, regu- lation and use of science - and a diverse science workforce. Cluster policy plays a very minor roll in the Science and Technology framework. This is due to the fact that cluster policy is executed by regional development agencies, while the science and technology policy is mostly a national affair. In regional eco- nomic strategies, there does tend to be a focus on clusters that could benefit from improvements in research and development. Source: http://www.dti.gov.uk/science/research-councils/quinquennial_reviews_of_cclrc/page13198.html 40

Regional economic development policy Regional economic development policy is conducted by regional economic develop- ment agencies, but they act in line within a framework outlined by the Department of Trade and Industry. The economic development agencies, and their policy orientation is detailed in 2.2.1 Cluster policy is an integral part of regions economic development strategy. Some regions place a greater emphasise than others. For example, West Midlands and Yorkshire and Humber focus more heavily on cluster strategy than Northern Ireland. In Northern Ireland, cluster policy is a sub-section of the science and innovation policy. Source: Invest Northern Ireland: http://www.investni.com/, Advantage West Midlands: http://www.advantagewm.co.uk/, and Yorkshire Forward: www.yorkshire-forward.com

Entrepreneurship and SME policy: Entrepreneurship and SME policy is executed by the regional economic develop- ment agencies and is outlined in the Regional Economic Strategy of every agency. Although Entrepreneurship and SME policy is present in all regional economic strat- egy, some regions outline specific and concrete policy measures while others speak more generally of this issue. Similarly, cluster policies of regions vary in their incorporation of entrepreneurship and SME policy. Source: Economic Strategies of All Regional Development Agencies

Business Network policy The United Kingdom has a strong tradition in business networking, but it has a weak infrastructure for such networking to take place. The attempt to create business net- works via clustering is anecdotal. In northern England there are some examples of cluster development through business network policy, and the likely reason for their success is due to the industrial and business networking tradition of the region. The best example of clusters developing business networks is in several industrial clusters in Newcastle. Source: Pittaway, Luke and Robertson, Maxine, Business-to-Business Networking and its Impact on Innovation: Exploring the UK Evidence; Institute for Entrepreneurship and Enterprise Development, Lancaster University Management School http://www.lums.lancs.ac.uk/publications/viewpdf/000277

FDI attraction policy: UK Trade and Investment (UKINVEST) is the national agency responsible for at- tracting FDI. UKInvest uses clusters as a marketing tool to attract FDI in specific sectors from abroad. In particular it sites the Aerospace, Automotive, Chemicals, Creative & Media, Environment, Renewable Energy, Food & Drink, Telecommuni- cations, Software and IT Services, Hardware & Electronics, Life Sciences, Healthcare & Medical, and Financial Services clusters. Ever since 1999, all regions in the United Kingdom have their own regional devel- opment agencies responsible for, amongst other things, attracting FDI. The agencies,

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similarly to UKInvest, use clusters as a tool to attract FDI in sectors that the region is specifically interested in developing. Source: UKInvest :http://www.ukinvest.gov.uk/busenv/AboutUs/WhoWeAre/index.html

Export promotion policy UK Trade and Investment is the government agency responsible for helping business grow and export oversees. It uses cluster policy in a very indirect manner. That is, the agency has created sector profiles of different international markets of all the clusters identified in the United Kingdom. Source: UK Trade & Investment https://www.uktradeinvest.gov.uk/ukti/appmanager/ukti/sectors?_nfls=false&_nfpb=true&_pageLabel=SectorType1&navi gationPageId=/airports

Sectoral industry policy Cluster policy plays a very minor role in industrial policy in the United Kingdom. However, because of the strong industrial tradition in the UK, especially in the northern regions, many of the cluster initiatives coincide with industrial sectors. The chemical, automotive, and energy clusters, for example, are of prime importance in the northern regions. One could conclude that cluster policy and industry policy run independently, but often coincide in its objectives. Source: Industrial Cluster Programs in the Northern Regions

Science and education policy Cluster policy plays an active role in science and education policy in several capaci- ties. There are several regional initiatives to create apprentice programs to place uni- versity or secondary school students in businesses of active clusters. These are organ- ised either by the regional economic agencies directly, or by the cluster organisations. The cluster initiatives also actively pursue policies aimed at enhancing the links be- tween universities and commercialisation of university research ideas. In the West Midlands, for example, The Medical Technologies Opportunity Group has programs create an innovation or proof of concept fund that fast tracks selected innovations. Other programs also incentive researchers to commercialise their ideas by providing them with a year of salary while they attempt to form a business around an idea that they conceptualised in the academic arena. Source: Advantage West Midlands, The Medical Technologies Interim Cluster Plan http://www.advantagewm.co.uk/downloads/medical-technologies-3-year-plan-.pdf

Competition and market integration Cluster policy plays a small role in competition and market integration policies in the UK.

4 Cluster or competitiveness councils

In some countries, councils have been set up to promote a dialogue about clusters and competitiveness. Often, these councils have representatives from the govern- ment sector as well as from the academic world and the business community. 42

There is no cluster or competitiveness council in the United Kingdom. An institution that is active in studying clusters and promoting a dialogue between academia and the public sector is the Institute of Development Studies (IDS). However, the IDS has a special focus on researching cluster policy for developing countries. The IDS was founded in 1966 as an independent research instate of the University of Sussex. Although it is linked to the university, it is financially and constitutionally independent. It receives funding from the UK Department for International Devel- opment, the EU, various UN agencies, trusts and foundations, research grants, fees for advisory work, teaching, and publication sales. The Board of Trustees is formed by the academics from the University of Sussex, and representatives of the funding institutions. Source: Institute of Development Studies, http://www.ids.ac.uk/cf/idssearch/IDSsearchaction.cfm

5 Other policy issues

There might be other issues that have impact on cluster-related issues in a country. Such issues could be, for example, any macro economic policies that may be relevant for clusters (tax regimes, etc), or if any general evaluation has been made about the country’s competitiveness and barriers to competitiveness. Regarding policy in evaluation of cluster development in UK: The Practical Guide to Cluster Development, 2004 highlights the importance of tracking the performance of a cluster by the use of metrics is for assessing the impact of the cluster measures and benchmarking performance. This enables the officials to understand the components of a cluster and identify the strengths and weaknesses of the cluster. Secondly this measures the appropriateness, effectiveness, and the efficiency of the cluster policy and intervention. The indicators used to measure the cluster development will depend upon various factors e.g. nature of the cluster, nature of interventions, and overall policy objec- tives. There is no simple outline to follow, the RDS’s are to appoint suitable indica- tors according to their policy. An example provided of a monitoring framework is shown below.

Example of a monitoring framework 43

The reports suggest that the information for cluster development is sourced from official statistics data sets, commissioned survey work, and qualitative understanding based on discussions with cluster members. Some RDS’s have incorporated business profiling, supply chain analysis and input/output analysis. • The indicator mix needs to be able to provide data on a regular basis, in order to understand the progress towards long term benefits. • Measurements should be on a one, two, five or ten year cycle depending on the type of initiative and how long it will take to be implemented and how long the results become measurable. For example there is a large timeframe between building partnerships and developing and supporting innovation initiatives.

Source: Department of Trade and Industry, A Pracrical Guide to Cluster Development http://www.dti.gov.uk/files/file14008.pdf

5.1 Cluster orientation Ever since cluster policy was first identified as an important area of economic devel- opment in 1998 in the White Paper entitled “Our Competitive Future – Building the Knowledgeable Driven Economy”, it has become increasingly active in government policy. The White Paper can be identified as the first phase of cluster policy. It dis- cussed a study on Biotechnology Clusters and presented also recommendations for other sectors. Most importantly, it stated that the administrations in Scotland, Wales and Northern Ireland, would direct the new policies outside UK. The second phase is the first state-wide mapping conducted by the Cluster Policy Steering Group in May 2000, managed by Lord Sainsbury. The group brought the government, RDAs, academia, local government, the private sector and other cluster experts together. It’s purpose was to identify the barriers to cluster development and recommend appropriate new policy initiatives to the Cabinet at a national level. In 2000-early 2003, this group ran together with a cross-Whitehall officials' group. The discussions led to the buildings blocks of the policy framework for clusters. Two of the areas discussed, the planning system and the UK skills level are now imple- mented into the cluster policy as cross cutting themes for cluster development. The Steering Group worked in consortium with Trends Business Research to provide the first UK Cluster Mapping project, “A mapping of cluster activity in titled the UK Business Clusters in the UK: A First Assessment”, published in February 2001. The report followed Porter on clusters and developed a systematic national map of cluster activity after discussion in the regions and industry directorates in DTI. The process has today been built upon and carried out by the RDAs across the UK, in order for them to process their own regional cluster mappings. A third phase of cluster policy, working in parallel with the previous one, was the formation of a White Paper titled “the Opportunity For All In A World Of Change” by the DTI. This revised version of the 1998 White Paper recognized the key role of cluster development on the regional economy, and put forward that Regional Devel- opment Agencies (RDAs) were to develop the clusters in their regions at what ever stage in their lifecycle, by fostering sustainable growth in the regions’ strengths and capabilities. In 1998, eight of the RDAs were set up under the RDAs Act, launched in April 1999. The final ninth was established in London on July 2000 after the estab- lishment of the Greater London Authority (GLA). 44

Since the Cluster Steering Group came to a close, the Government has taken an ac- tive interest in the cluster projects of the RDA’s, and continuously works with the DTI. The Review of Innovation closely examined the cluster projects and created a revised version of the DTI vision and objectives. This led to the examination how improving the UK’s relative innovation performance can close the productivity gap. A focused strategy for increasing innovation was published in 2003, which has since led innovation to become a priority of the cluster initiatives over the UK. Since general elections in 2005, Government departments have restated their priori- ties for RDA’s primarily in context of reviewing the regional economic strategies. The Tasking Framework introduced April 2005 to the RDA’s: • Increased focus on strategic outcomes • Ensured government departments and RDA work together on regional policies and national interests

Source: Our Competitive Future – Building the Knowledge Driven Economy (http://www.publications.parliament.uk/) - Departmenr of Trade and Industry, Lord Sainsbury of Turville, Taking Clusters Forward, 2003 http://www.dti.gov.uk/ministers/speeches/sainsbury040203.html - Department of Trade and Industry and Deparment of Education od Education and Skills, Opertunity for All in a World of Change, 2001 http://www.poptel.org.uk/whitehall-college/whitehall/pdf/oppforall.pdf

5.2 The major obstacles to the process of building cluster policy The development of cluster policy has continuously become more standard since it was first introduced in 1998. In fact, their have been few obstacles for its propaga- tion. There are several possible reasons for this: • The UK government has been the same party since the inception of clus- ter policy • The UK economy has improved as cluster policy has increasingly been implemented • Strong commitment from the UK DTI towards cluster policy • Clear framework for the creation, execution, and evaluation of cluster de- velopment policy. Source: Based on compilation of evidence from the regional economic strategies

5.3 Cluster policy in the policy/academic debate Cluster policy is treated actively in academic and political circles. One of the prob- lems encountered through the cluster development experience in the UK was the emergence of some fairly rigid boundaries and a potentially unhelpful short-termism which was not in the best interest of wider economic development. Academic circles had an active debate as to how to make clusters more porous, much more inter- related, much more dynamic, much more flexible and much more inclusive. Examples of seminars held in the United Kingdom regarding cluster policy include: • The University of Nottingham Institute for Enterprise and Innovation hosted in 2001 an important seminar on cluster development cosponsored with the East Midlands Development Agency • Centre for Urban and Regional Governance, University of Westminster, 2004 45

• Royal Society, 2007 As mentioned in a previous section, the IDS was one of the first institutions to re- search cluster development on a theoretical level, and it still is one of the most im- portant institutions that does so. The focus of the IDS, however, is in cluster policy for developing countries. Sources: http://www.nottingham.ac.uk/enterprise/downloads/clusters.pdf http://www.nottingham.ac.uk/enterprise/unieihome_archive.htm http://www.bcs.org/server.php?show=ConWebDoc.9982 http://www.ids.ac.uk/ids/global/projects/coleff.html

5.4 General assessment of competitiveness or barriers to competitiveness Yes, the most recent general assessment was a UK DTI paper titles UK Competi- tiveness: moving to the next stage, published in 2003. The paper, written in coopera- tion with Michael Porter, points that the UK’s success in raising prosperity has been due to its strength in science and engineering, its supportive market framework, and its improved macroeconomic environment. The UK is weak, however in terms of skills, cluster development, and innovation. The paper than makes a series of rec- ommendations to improve the skills, innovation, and cluster development framework in the United Kingdom.

Source: http://www.dti.gov.uk/files/file14771.pdf

6 Policy Trends

Policy trends Policy Stream Old Approach New Approach Cluster Programme Focus Regional policy Redistribution from Building competi- • Target or often include lagging regions leading to lagging tive regions by • Focus on smaller firms as opposed to regions bringing local actors larger firms, if not explicitly than de facto and assets together • Broad approach to sector and innovation targets • Emphasis on engagement of actors Science and Financing of individ- Financing of col- • Usually high technology focus technology ual, single sector laborative research • Both take advantage of and reinforce the policy projects in basic re- involving networks spatial impacts of R&D investment search with industry and • Promote collaborative R&D instruments to links with commer- support commercialisation cialisation • Include both large and small firms; can emphasise support for spin-off start ups Industrial and Subsidies to firms; Supporting common Programmes often adopt one of the following enterprise policy national champions needs of firm approaches: groups and technol- • Target the "drivers" of national growth ogy absorption • Support industries undergoing transition (especially SMEs) and thus shedding jobs • Help small firms overcome obstacles to technology absorption and growth • Create competitive advantages to attract inward investment and brand for exports Source: OECDA review of national cluster policies: why are they popular, again?, June 2006

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