Voices of Digital Communities

The Cluster Evolves as a Tech Development Paradigm

"Pick a hot industry, build a technology park next to a research university, provide incentives for businesses to relocate, add some venture capital and then watch the magic happen."

by / April 16, 2012

The cluster is dead, long live the cluster.

The concept of the cluster, proposed and popularized by Michael Porter in 1990, is taking some hard knocks these days.  To quote a recent critic, Washington Post columnist Vivek Wadhwa: "The formula for creating these clusters is always the same: Pick a hot industry, build a technology park next to a research university, provide incentives for businesses to relocate, add some venture capital and then watch the magic happen. But, as I have noted before, the magic never happens. Most of the top-down cluster-development projects in the United States and around the world have died a slow death in relative obscurity. Politicians who held the press conferences to claim credit for advancing science and technology are long gone….Real estate barons have reaped fortunes, and taxpayers are left holding the bag."

If you are still doing anything the same old way you did it in 1990, it is probably time to rethink.  And in my recent visits to Top Seven Intelligent Communities, I find that these leading-edge places have done exactly that when it comes to creating platforms for innovation.  

In Oulu, Finland, which I visited at the end of March, they are proud of their Technopolis, which was created along the lines that Mr. Wadha cites (and is a major success).  But it is no longer Oulu’s focus of innovation.  

The University of Oulu now runs four centers of excellence, which get half of their funding from the university and half from R&D projects – a formula that keeps them lean and hungry.  The Center for Wireless Communications – an important source of R&D for Nokia – is the oldest and has produced a steady stream of industry “firsts” in mobile voice and data.  An Intelligent Systems Group has generated seven spin-offs in software security and related fields.  The Center for Internet Excellence is funded jointly by Nokia and Intel to research how the design vocabulary of video games can make the Web easier to use.  And a new Center for Health & Technology aims to generate commercial innovations while addressing the challenges of an aging population.  

Nothing embodies the new approach to clusters like OULabs.  This Living Lab project organized by the city has recruited 500 citizen volunteers to market-test new applications in information and communications technology, e-health and online learning.  A software company recently engaged OULabs to test an online product before its launch.   Testing revealed so many failures that the company postponed what would have proved a disastrous launch to retool the product – a decision that will save major time and money.

Living Lab is a term you hear a lot in Oulu.  The city is striving to make the entire community a place where international companies come to test the latest technologies in their target industries of communications, security, education and healthcare.  And Oulu is not alone. In my next post, I will report on a community half a world away that is following its own remarkable path to becoming a global platform for innovation.

Robert Bell Co-founder of the Intelligent Community Forum

Robert Bell is co-founder of the Intelligent Community Forum, where he heads its research and content development activities. He is the author of ICF's pioneering study, Benchmarking the Intelligent Community, the annual Top Seven Intelligent Communities of the Year white papers and other research reports issued by the Forum, and of Broadband Economies: Creating the Community of the 21st Century. Mr. Bell has also authored articles in The Municipal Journal of Telecommunications Policy, IEDC Journal, Telecommunications, Asia-Pacific Satellite and Asian Communications; and has appeared in segments of ABC World News and The Discovery Channel. A frequent keynote speaker and moderator at municipal and telecom industry events, he has also led economic development missions and study tours to cities in Asia and the US.