Clusters: Where do we go from here?

Clusters: Where do we go from here?

We at the Institute have seen a lot of change in the last couple of years when it comes to clusters. We know that clusters, because they are about people and collaboration and building networks, lower transaction costs for those involved, can spur innovation and knowledge spillovers, and bring about more prosperity for all. They can also bring those who are not traditionally part of clusters, such as SMEs, visible minorities, and women, to be part of global supply chains.

Now that we have hosted a global clusters conference (TCI 2018), written blogs and numerous publications on clusters, we find ourselves at a fork in the road. As the Institute draws to a close, one could see these publications and the conference as just discrete events. Alternatively, we can see these events and bodies of work as interconnected pieces that snowball into something bigger. So this begs the question: what is Canada now? And where should it go from here?

We have met the 5 superclusters over the course of the past year and we are impressed by their passion, knowledge, and competence. Delivering results in five years is difficult and we commend and support them in their efforts. We also wish the Innovation, Science and Economic Development Canada team who runs the Initiative continued success. This bold move is making international waves and headway and we know that this investment will yield some good results.

The reality, though, is that most of our clusters are not part of the superclusters and rightfully so as Canada has a multitude of strong industries and sectors. Over the past few years, we have convened many of these leaders who have a role to play within various clusters in Toronto and this culminated in TCI 2018, where we brought the world to Toronto to celebrate the clusters here and to have leaders share their best practices on cluster development. It is unfortunate that the Institute can no longer continue building on the great momentum amongst local clusters. At this juncture, we offer a few suggestions on how Canadian clusters can continue to grow:

  1. Recognize how interconnected we are – We have tried to show how connected clusters are in exhibits and our relatedness work. This makes sense as clusters are made up of a series of related sectors, and often these sectors can cross a number of different clusters. Whether clusters have similar sectors or are located next to another region, strong clusters produce spillover effects that positively affect neighbouring regions and related sectors. Therefore, we need to see more cross-sectoral, cross-governmental, and cross-cluster interactions and collaborations. Clusters are inherently local phenomena but the supports go beyond that of one jurisdiction and therefore, governments at every level need to start working together across regions.
  2. Create central organization that supports clusters - There are many governments, industry associations, and firms thinking about how to move forward on cluster development. We have been working on clusters from a primarily academic perspective but we need an organization that can provide practical guidance and act as a one-stop-shop for clusters across Canada. Western Diversification has done a wonderful job of developing a shared knowledge and language around clusters. But this needs to be replicated across Canada where information and progress can be captured and shared centrally.
  3. Formalize clusters – Clusters need cluster organizations to help formalize the relationships within them but also to be the liaison between the many cluster actors. Cluster organizations vary in their structure, governance, membership, and operations, but they are the next step in cluster growth. We need to see more of these in Canada.
  4. Just do it – The Institute has spent nearly the past 20 years analyzing clusters and their contribution to closing the prosperity gap. There has been much academic literature on clusters but the actual practice of cluster development is quite different from just understanding them from a purely academic perspective. Cluster managers and cluster organizations help those within the cluster work together to produce innovations, specialized talent, and ultimately more prosperity, but how this is done will vary depending on the cluster. There are guides and suggested ways of doing, but cluster development is highly contextual and requires strong leadership and a desire to grow a cluster to help firms grow. Therefore, while Canadian clusters should learn the language of a cluster, they will need to start the hard work of bringing people together.

For more on clusters and cluster development, please refer to The Canadian Cluster Handbook.

Written by: Dorinda So

Photo credit: uschools, iStockPhoto

Category: Clusters