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The Roles of Intermediaries in Cluster Development: The Thai Experiences from High-Tech and mid-tech manufacturing, knowledge-intensive services, to Community-based Clusters


Patarapong Intarakumnerd, Ph.D.


Paper presented at the International Workshop on Sub-national Innovation Systems and Technology Capacity Building Policies to Enhance Competitiveness of SMEs


27-30 October 2006

Beijing, China


Abstract


At present, the concept of industrial cluster becomes very popular worldwide, policy makers at national, regional and local levels and business people in both forerunner and latecomer countries are keen to implement the cluster concept as an economic development model. Though understanding of clusters and related promoting policies varies from one place to another, the underlying benefits of clusters from collective learning and knowledge spillovers between participating actors strongly attract the attention of these people.


In Thailand, a latecomer country in terms of technological catching up, the cluster concept has been used as a means to rectify weakness and fragmentation of its innovation systems. The present Thai government aspires to apply the concept to promote both high-tech manufacturing clusters, services clusters and community-based clusters at the grass-root level. This paper analyses four clusters very different in terms of technological sophistication and business objectives, i.e., hard disk drive, bus’s body assembly, software and chili paste. It portrays their significant actors, the extent of interaction among them and the evolution of the clusters. Though they are very dissimilar, common characteristics attributed to qualified success are found. Main driving forces of the four clusters are cluster intermediaries. Forms of these organizations are different from a government research and technology organization (RTO), a government sector-specific agency, an industrial association, to a self-organised community-based organisation. However, they perform similar functions of stimulating information and knowledge sharing, and building trust among participating firms/individuals in the clusters. Literature in the cluster studies argues that government policies need to be cluster specific. In this case, the best way to design and implement cluster-specific policies is through working closely with intermediaries and strengthening their institutional capabilities especially in linking member firms/individuals to other actors in clusters such as universities, government R&D institutes, and financial institutions.


Key words: industrial clusters, community-based clusters, latecomer countries, cluster intermediaries, Research and Technology Organisation (RTO).

  1. Introduction


Industrial clusters are geographical concentrations of interconnected companies, specialised suppliers, service providers, firms in related industries, and associated institutions (for example, universities, standard agencies, and trade associations) that combine to create new products and/or services in specific lines of business (see Porter, 1998; OECD, 2000). At present, the concept of industrial cluster becomes very popular worldwide, policy makers at national, regional and local levels and business people in both forerunner and latecomer countries are keen to implement the cluster concept as an economic development model. Though understanding of clusters and related promoting policies varies from one place to another (see, for example, Steiner, 1997), the underlying benefits of clusters from collective learning and knowledge spillovers between participating actors strongly attract the attention of these people.


Nonetheless, different countries pursue different policies regarding promotion of industrial cluster. In some countries like Japan (such as government-initiated “Industrial Clusters” and “Knowledge Clusters” and Malaysia (as in the case of Multimedia Super Corridor), governments take very much pro-active roles in stimulating (to some extent, creating) clusters. On the other hand, in other countries, the US in particular, clustering initiation mostly come from the private sector and governments only play facilitating and supporting roles. This paper does not aim to answer which policy type is more successful. Instead, it will focus on the role of intermediaries, which can be in many organizational forms, in facilitating the knowledge flow and building trust among different actors in clusters.



  1. Industrial Cluster and Intermediary Organisations



Dodgson and Bessant (1996) indicate that intermediary organisations can facilitate innovation process by performing activities bridging user needs and supply side as shown in Table 1. These intermediary organisations can take many forms such as research technology organisations (RTOs)1, industrial and trade associations, professional associations, private foundations and so on.


Table 1: Bridging activities in the innovation process


User needs

Bridging activity

Supply side

Technology

Articulation of specific needs

Selection of appropriate options

Sources of technology

Skills and human resources

Identification of needs Selection

Training and development

Labor market

Training resources

Financial support

Investment appraisal

Making a business case

Sources of finance venture capital, banks, government, etc.

Business and innovation strategy

Identification and development

Communication and implementation

Environmental signals - threats, opportunities, etc.

Knowledge about new technology

Education, information and communication

Locating key sources of new knowledge

Bridging linkages with the external knowledge system

Examples of best practice

Emerging knowledge base

Implementation

Project management

Managing external resources

Training and skill development

Organizational development

Specialist resources
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