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Clusters and the New Growth Path for Europe

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  • Christian Ketels
  • Sergiy Protsiv

Abstract

This paper outlines elements of a conceptual framework that clarifies the role that clusters play relative to government policies and actions of individual companies in supporting the emergence of 'High Road'-strategies that lead to better New Growth Path-related outcomes. It then focuses on creating a new set of data that can start shedding light on the empirical relevance of this framework. The first main section of the paper draws on a new set of employment and wage data across European clusters. The data is used to analyze whether cluster presence is significantly correlated with higher wages, which as an indicator of higher productivity, are likely to signal the presence of 'High Road'-strategies. We then take a closer look at the scale of the relationship relative to location-specific and other effects. We find cluster presence to be significantly related to higher wages, with the effect being moderate but meaningful. This suggest that cluster presence enhances the ability of economic activities to deliver high performance, but is unlikely to be able to substitute weak business environment conditions. The second section then deploys a wide range of regional performance data collected for the European Competitiveness Index and the European Cluster Observatory. We create indicators for New Growth Path performance and its main dimensions, and classify European regions by their performance patterns. This provides critical insights into the compatibility of the different economics, social, and ecological objectives pursued. We then relate these outcomes to the presence of strong cluster portfolios and strong business environment conditions. Both are most strongly associated with stronger economic outcomes, with lower impact on other dimensions of the New Growth Path. The third section creates a new dataset of cluster initiative intensity at the regional and cluster category-level. It also classifies close to 1000 cluster initiatives in Europe by their engagement in New Growth Path-related activities. We then deploy this data to test the impact of cluster initiatives on regional New Growth Path-performance. Overall, we find evidence consistent with clusters playing a role in making 'High Road'-strategies more likely to emerge. We also find evidence that European regions differ in their strategies towards these goals, with some being able to pursue all three dimensions in parallel. Cluster initiatives widely engage in New Growth Path-related activities, indicating their potential as a tool in mobilizing joint action in these areas.

Suggested Citation

  • Christian Ketels & Sergiy Protsiv, 2013. "Clusters and the New Growth Path for Europe," WWWforEurope Working Papers series 14, WWWforEurope.
  • Handle: RePEc:feu:wfewop:y:2013:m:7:d:0:i:14
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    References listed on IDEAS

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    1. repec:feu:wfedel:y:2016:m:2:d:0:i:11 is not listed on IDEAS
    2. repec:feu:wfedel:y:2016:m:2:d:0:i:12 is not listed on IDEAS
    3. Karl Aiginger & Susanne Bärenthaler-Sieber & Johanna Vogel, 2015. "Competitiveness of EU vs. US," WWWforEurope Policy Paper series 29, WWWforEurope.
    4. Georg Licht & Bettina Peters & Christian Köhler & Franz Schwiebacher, 2014. "The Potential Contribution of Innovation Systems to Socio-Ecological Transition," WWWforEurope Deliverables series 4, WWWforEurope.
    5. Karl Aiginger, 2016. "New Dynamics for Europe: Reaping the Benefits of Socio-ecological Transition. Synthesis Report Part I," WWWforEurope Deliverables series 11, WWWforEurope.
    6. Karl Aiginger & Matthias Firgo, 2015. "Regional Competitiveness Under New Perspectives," WWWforEurope Policy Paper series 26, WWWforEurope.
    7. Karl Aiginger & Kurt Kratena & Margit Schratzenstaller & Teresa Weiss, 2014. "Moving towards a new growth model," WWWforEurope Deliverables series 3, WWWforEurope.
    8. Ketels Christian, 2017. "Working Paper 258 - Structural Transformation: A competitiveness-based view," Working Paper Series 2369, African Development Bank.
    9. Eichhorst, Werner & Colussi, Tommaso & Guzi, Martin & Kahanec, Martin & Lichter, Andreas & Nikolova, Milena & Sommer, Eric, 2017. "Report No. 74: People to Jobs, Jobs to People: Global Mobility and Labor Migration," IZA Research Reports 74, Institute for the Study of Labor (IZA).
    10. Gunther Tichy, 2015. "Protecting social inclusion and mobility in a low growth scenario," WWWforEurope Working Papers series 100, WWWforEurope.
    11. Marek Tiits & Tarmo Kalvet & Imre Mürk, 2015. "Smart Specialisation in Cohesion Economies," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 6(2), pages 296-319, June.
    12. Constantin BORDEI, 2016. "Clusters- Sources Of Economic Growth In Europe," SEA - Practical Application of Science, Fundația Română pentru Inteligența Afacerii, Editorial Department, issue 10, pages 141-148, April.
    13. Christian Ketels, 2015. "Competitiveness and Clusters: Implications for a New European Growth Strategy," WWWforEurope Working Papers series 84, WWWforEurope.
    14. Iritié, B. G. Jean Jacques, 2016. "Economic issues of innovation clusters-based industrial policy : a critical overview," EconStor Preprints 142746, ZBW - German National Library of Economics.

    More about this item

    Keywords

    Clusters; competitiveness; economic growth path; economic strategy; European economic policy; globalisation; industrial policy; new technologies; SMEs;

    JEL classification:

    • D04 - Microeconomics - - General - - - Microeconomic Policy: Formulation; Implementation; Evaluation
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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