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Book: The Capacity to Innovate: dynamics in clusters and cluster policy

The Capacity to Innovate is a recently published book by Sarah Giest, Assistant Professor at the Institute of Public Administration. In this article Sarah gives insight in the main findings of the book and the experience developing it.

Cover of the book

What is the book about and what is its main purpose?

Giest: ‘Innovative activity is an important driver of economic growth and clusters – or regional agglomerations of economic activity in related industries – are seen as important contributors of innovative success. The idea of clusters has been around since the 1890s, but they have been made ‘fashionable’ as an instrument for innovation through Silicon Valley. What has been contentious is whether and how government should support innovative efforts within clusters. The book first tries to unravel the mechanisms for innovative activities within these clusters, which are identified as collaborative and absorptive capacity, and second how to use these mechanisms to support innovative activities. In short, the capacity lens shows that clusters require internal collaborative and knowledge structures as well as the ability to absorb external knowledge. Both can be facilitated when policy makers who oversee the larger framework, such as taxes and infrastructure for example work together with cluster organizations to target specific needs and potential gaps of individual clusters.’  

Why did you choose the biotechnology field as an example in the book? 

Giest: ‘The book’s case studies focus on the biotechnology sector; however, the findings of the research also rely on a survey conducted across industries and among government, industry and research institutions. For biotechnology specifically, this field is well known for relying heavily on local agglomerations due to its dependence on scientific knowledge from a diverse set of stakeholders. Innovative advancements in biotechnology are further heavily dependent on the financial resources of bigger companies or on government funding, because, for example, a new medication requires large up-front costs and long development times. Similarly, the work being done requires individual skill sets obtained by university graduates and an environment in which to carry out the work, such as a wet-lab (special ventilation and piped utilities) or a research hospital. These interdependencies of different actors explain the agglomerations in clusters and also led some to argue that clustering and biotechnology advancement go hand-in-hand. Overall, these characteristics make biotechnology an industry favored by many to show cluster effects.’  

What are the advantages of a coordinated effort by government and cluster organizations as you advocate?

Giest: ‘Using the capacity perspective for analyzing government support of clusters shows that cluster organizations play a central role because collective action dynamics within such competitive networks often prevent concerted activity, which is required for knowledge exchange and ultimately innovation. A cluster organization can overcome this tendency by acting as a link among stakeholders as well as to government. From a government perspective, policymakers often have only limited oversight over the specific needs of cluster stakeholders. Cluster organizations can become a communication channel as well as ‘built-in policy adjustment mechanisms’ that help policymakers respond to ongoing changes.’  

What is the target group of the book, and what can students learn from it?  

Giest: ‘The primary target group for the book is researchers in different fields as well as policymakers. Since it is an interdisciplinary book it can speak to researchers in policy, as well as economic geography, technology and innovation studies and policymakers at local and national level. Think tanks that do consultancy around innovation policy, cluster management, bio- and nanotechnology might also be interested in the book’s content. The book introduces a new conceptual angle for both innovation and policy studies, which is a useful theoretical lens for students interested in these fields. The research also offers an interdisciplinary theory section, which can give students insights into how to draw on different strands of literature to highlight common themes.’  

How long did it take to write the book and how did you experiencend it?

Giest: ‘The book is based on my PhD research, which I concluded in 2014. Since then, I have been working on the manuscript – pitching it to the University of Toronto Press, revising it based on reviewer input, re-writing it for a broader audience, as well as updating the literature and government reports cited in the text. I enjoyed re-engaging with the subject matter – especially more recent concepts as well as the cases and seeing what happened to the cluster since I visited them. Of course, writing a book is quite a different experience from writing a paper or even a thesis, since the storyline needs to be coherent and not repetitive throughout while keeping the reader in mind. For example, making sure that chapters can stand on their own, while also forming part of a larger puzzle.’  

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