This presentation gives an overview of Innovation Cluster models, attempts to identify critical success factors and informs about the Indian pilot and E Book.

1. WHITE SPACES IN BUILDING
INNOVATION CLUSTERS
A.S.Rao
Senior Advisor, Innovation Clusters,FMC
indiainvents@hotmail.com
http://www.indiainvents.blogspot.com/

2. Implementation challenges and
opportunities
– analysis in the Indian context
• Success formula
• Knowledge flows
• Cluster’s knowledge creation capability
• Indian pilot
• A model for Indian Innovation Cluster(!)
• Discussion

3. Innovation cluster- why are they
popular and how are they successful
• The U.S. government each year spends about
$150 billion on basic scientific research and
development and out of that about $100
million is spent to support regional innovation
clusters and associated business incubators.
• As measured by patent rates, productivity
rates and other innovation metrics, an
innovation cluster creates new companies and
new jobs.

4. Pittsburgh’s innovation cluster
Pittsburgh Life science Greenhouse (PLSG) was formed as a
focused incubator to provide capital investments and
customized company formation. PLSG focused on bioscience
companies with promising innovation in the biotechnology,
diagnostics, health care information technology, medical
devices and therapeutics. Three programs were taken up to
fuel growth in Life science industries:
• The Life Science Greenhouse Initiative (LSGI) for very early
stage life science start-ups and regional workforces plan
development projects;
• The CURE grants program to help maturing start-ups access
the next round of development capital;
• Funding of venture capital groups in the state to help finance
these start-ups. The $60 million state fund with $180 million
private capital infused additional capital of $240 million in
targeted areas to fund 280 start-ups.

5. Ohio University
• Known for rich natural resources like iron ore, salt, clay, coal.
• Transformed as high tech cluster with Ohio university generating
patents, technologies and spin-offs. Ohio University is home to 44
centers and institutes, and many support the commercialization of
faculty research and technology. These include: Edison
Biotechnology Institute, Avionics Engineering Center, Ohio Coal
Research Center, Institute for Corrosion and Multiphase Technology,
Nanoscale and Quantum Phenomenon Institut.
• Since 1983, the Innovation Center has incubated more than 100
companies; helped create more than 1,000, assisted with 9 spin‐off
companies from university‐invented technology and supported the
start up of 27 companies created by university faculty and staff. 784
start-ups between 1995 and 2000 specializing in biomedical
research, renewable energy and gourmet food.

6. Swiss Medical Technology
• With the clock ticking on their watch industry in the late 1970s
because of a glut of cheaper, digital Japanese watches, the Swiss
timepiece and mechanical engineering sectors desperately needed
a shift and then came medical technology.
• A combination of government technology development programs, a
talented and well-educated labour pool, a supportive academic
community and favorable tax rates have combined to make Swiss
medtech one of the fastest growing industrial sectors in the
country.
• The Swiss medtech sector in 2008 comprised of about 700
companies, employing 49 000 people in the production of products
such as dental and orthopedic implants, urinary infection
diagnostics, surgical tools, sterilization products for the healthcare
sector, electrocardiographs, and precise ophthalmology measuring
tools.

7. Success factors
• Four principles for cluster success are: Place
matters, networks are critical, patience is
necessary, and leadership is essential.
• Some clusters developed on their own over
decades without any particular set of
individuals or institutions consciously thinking
about their development. New clusters,
however, required decisive local leadership to
begin to flourish.

8. Social capital of a cluster
The study on effect of social capital on new
venture creation at Cambridge high tech
cluster had important findings:
• A limited number of
individuals, together, shaped the Cambridge
High tech cluster. At the center of a high tech
cluster is a mini cluster of key individuals
(investors, academics and serial
entrepreneurs) who can influence the success
of the cluster.

9. Knowledge flows in innovation cluster
• The knowledge-using elements are involved, in
maintaining or expanding capacity using given modes
of production; training workers in established
operating procedures, or within a cluster context, the
imitation of production techniques used by
neighboring firms.
• The knowledge changing elements are involved in the
management of innovation processes; in product
design and development; or in the search for, selection,
adaptation and assimilation of new product or process
technology from outside the cluster.

10. Buzz Vs pipeline
• Buzz refers to the information and communication
ecology created by face to face contacts, co-presence
and co-location of people and firms within the same
industry and place or origin.
• Global pipelines are purpose built connection between
a given local firm and parties on the outside world.
Partners can range from other
firms, suppliers, customers, universities, research
centers. Establishing global pipeline is costly, yet it is
possible with a conscious effort on the part of partners
at both ends of the pipeline, making the exchange
highly targeted towards specific pre-defined goals.

11. Clusters knowledge creation capability
• A cluster that has a high level of knowledge
creation capability is one where knowledge held
by individual firms is effectively shared among
cluster firms through inter-firm knowledge
exchanges and amplified by individual firms’
knowledge spirals leading to enhanced
knowledge creation by individual firms.
• Knowledge overlap between cluster firms and
number of cluster firms that engage in knowledge
exchanges with outside entities.

12. Indian pilot
Two pharmaceutical clusters of Ahmedabad-
Vadodara (state of Gujarat), Hyderabad (state
of Andhra Pradesh); Information and
Communication Technology(ICT) cluster of
Delhi-NCR and three foundry industry clusters
of Samalkha, Faridabad and Kaithal (all in state
of Haryana).

13. Strategic objective
• Foundry cluster: Build social capital
• ICT cluster:Create demand for innovations
• Hyderabad Pharma cluster: Transform to clean
& green cluster.
• Gujarat Pharma cluster:Breed a new
generation technopreneurs.

14. Process
• Map Dominant Feature of cluster.
• Develop cluster attitude
• Connect Dots
• Create hope and excitement
• Change Dominant feature of cluster.

15. Indian Model(!)
• Improve the cluster knowledge creation
capacity in stages , support taping of global
sources of knowledge and creating cluster
knowledge.
• Identify the type of industry commons
essential and bring it to life.
• Develop service providers: knowledge gate
keepers, innovation intermediaries.

16. Structure of cluster coordinating body
• Information Network: Cluster Coordinating Body would
collate all information of interest to stakeholders and
disseminate same with physical meetings, digital
media, social networks. Large part of information would be
about government programs, promotional and regulatory.
Authorities, universities, institutes, firms deal directly with
one another and keeping the cluster coordinators in the
loop is not mandatory.
• Orchestrated Network : cluster coordinators would actively
be involved in fund disbursement and knowledge
networking.
• Managed Network: Public authorities would park the
apportioned funds with the coordinating agency to manage
against targeted outcome.

17. Discussion
When trying to replicate innovation cluster model in
India, several questions arise, such as;
• Can a university drive t17he development of a cluster?
What are the conditions essential to make a technical
University- center of regional economic activity?
• What is needed to increase social capital of a cluster?
• In the absence of appropriate knowledge flows from
local institutes, how could the cluster firms access
external knowledge?
• Can the public authorities prioritize support activities?

18. E Book
• The E Book `Promoting Innovation in Clusters- a guide book for promoting
innovation in MSME clusters' is now available as DVD. This book is
authored by me along with Mukesh Gulati,Dr.Tamal Sarkar, Ranjan
Singh, Keerthi Lal kala, Sourabh Gargav, Dr.Ashutosh Khanna.
Contents:
Chapter1: Overview of Clusters in India
• Defining cluster
• Presence of Clusters Globally
• Presence of Clusters in India
• Cluster Development in India, its Challenges and the Vision Ahead
Chapter 2: Global Models of Innovation
• Regional Innovation Clusters and the US Model of Innovation
• European Model of Innovation
• Asian Models of Innovation

19. E Book (contd)
Chapter 3: Technology Upgradation for Promoting Innovation in Indian Clusters
• - Case Studies
• Phase 1- Technology Procurement Through Funds
• i.) Shantha Biotechnics Vaccine Innovation Case – Funded by TDB
• ii.) Revival of Kinhal Art Innovation – Funded by TEPP
• Phase 2 – Technology Transfer
• i.) Coimbatore - SBI Uptech Programme
• ii.) Indo- German Tool rooms for new dies and moulds- GTZ, Ministry of SSI
• Phase 3 – Collective Approach
• i.) Ludhiana Knitwear Cluster- A case on providing multiple inputs
• ii.) Technology change through benchmarking in Ganjam Cashew Cluster
• iii.) Jalandhar Sports Goods Cluster
• Phase 4 – New Trajectory towards Innovation
• i.) Conceptualisation of Bio Technopreneur Programme
• for Ahmedabad Pharmaceutical Cluster
• ii.) Formation of NITEE & its various focus areas in ICT Cluster Delhi-NCR
• iii.) Design intervention reflecting knowledge flows among network partners leading to new
• designs in Samalkha Foundry Cluster

20. E Book (contd)
Chapter 4: Implementation Challenges and Opportunities, Analysis in the Indian Context
• An overview of Innovation Clusters
• Challenges that limit knowledge flows into the clusters in India
• Indian Pilots for Promotion of Innovation in Clusters
• Innovation and MSME Clusters- Indian Context
Chapter 5: Proposed Implementation Framework at Cluster Level
• Diagnostic Study Report and Action Plan.
• Trust Building, Social Capital and Implementation
• Monitoring and Evaluation.
• The DVD priced at Rs 799/- contains an E Book ( E Reader not required) and a PDF file.
For copies but online at E bay or contact:
Foundation for MSME Cluster
USO House, 2nd Floor, USO Road
off Shaheed Jeet Singh Marg
6 Institutional Area, New Delhi 110067