R&D productivity and the organization of cluster policy: an empirical evaluation of the Industrial Cluster Project in Japan

Abstract

Industrial clusters have attracted increasing attention as important locations of innovation. Therefore, several countries have started promotion policies for industrial clusters. However, there are few empirical studies on cluster policies. This paper examines the effects of the "Industrial Cluster Project" (ICP) in Japan on the R&D productivity of participants, using a unique dataset of 229 small firms, and discusses the conditions necessary for the effective organization of cluster policies. Different from former policy approaches, the ICP aims at building a collaborative network between universities and industries and supports the autonomous development of existing regional industries without direct intervention in the clustering process. Thus far, the ICP is similar to indirect support systems adopted by successful European clusters. Our estimation results suggest that participation in the cluster project alone does not affect R&D productivity. Moreover, research collaboration with a partner in the same cluster region decreases R&D productivity both in terms of the quantity and quality of patents. However, cluster participants apply for more patents than others without reducing patent quality when they collaborate with national universities in the same cluster region. These results imply the effectiveness of indirect support systems that remove obstacles and relax constraints in the clusters. In order to improve the R&D efficiency of local firms, it is also important to construct a wide-range collaborative network within and beyond the clusters, although most clusters focus on the network at a narrowly defined local level. These characteristics may be important factors for the effective organization of cluster policies.

Local Management of National Cluster Policies: Comparative Case Studies of Japanese, German, and French Biotechnology Clusters

“…These countries, which are all regarded as coordinated market economies [27], conduct national cluster policies with large subsidies (including biotechnology in their target technology fields), and specify that each cluster should have a local management organization implementing the cluster policy. As we later describe, the Japanese government initiated cluster policies in 2001 that were strongly influenced by European policies [18].…”

“…In Japan, MEXT implemented the Knowledge Cluster Initiative (KCI) and the City Area Program (CAP) in 2002, which were reorganized and integrated into the Regional Innovation Cluster Program in 2010, while METI (Ministry of Economy, Trade and Industry) carried out another cluster policy, Industrial Cluster Project ( [18,19]). In the MEXT programs, universities and public research institutes play a central role in the clusters as the cores of research collaboration with private firms.…”

“…Moreover, some recent studies empirically evaluate the effects of cluster policies on participant firms using micro data, such as [13][14][15] for Germany, [16,17] for France, and [18,19] for Japan. There is a vast amount of literature on the economies of agglomeration (e.g., [16] and on the clustering process or mechanism in an established cluster (e.g., [1]).…”

Geographical Clustering and the Effectiveness of Public Innovation Programs

“…Only a few studies have examined the impact of such policies on innovation. Nishimura and Okamuro (2011a) have studied the effects of participation in the Japanese Industrial Cluster Project on patenting and university collaboration. They did not find a significant effect of cluster participation on a firm's R&D productivity, but rather showed that participating firms collaborating with partners outside the cluster were more productive in terms of patent output.…”

The structure and dynamics of the global network of inter-firm R&D partnerships 1989–2002

“…At the same time, there was an even larger number of publications on the network structures in particular industries or regions (e.g., Duysters and Vanhaverbeke 1996;M'Chirgui 2007;Nishimura and Okamuro 2011). A commonality of most of these studies is that they attribute regional patterns and temporal changes in the network structure to differences across countries in terms of their social, political, or technological conditions and the development of these conditions over time.…”