Industry Clustering: Branding Changes or Substantial Differences

In economic policy the term ?industry cluster? is often used to explain geographical concentrations of economic and innovation activities. The prominence of the cluster idea that was in particular triggered by Porter (1990) and Enright (1996) is not too surprising since ?both firms keen to improve their competitiveness, and governments keen to exploit new sources of economic growth, need to understand how innovation works in order to better stimulate it? (OECD, 1999). Many believe that clusters support economic development through the specialisation of regions in activities within which companies gain higher productivity through accessing external economies of scale. According to Forslid and Midelfart Knarvik (2002) policymakers care about industrial, innovation or technology clusters and their geographical location, since clusters are associated with rents. Over the past decade clusters and innovation networks have gained more importance as an element of economic development and innovation strategies of the European Union and its member states. Under the Seventh Framework Programme (FP7) the European Commission funds an initiative entitled ?Regions of Knowledge,? which aims to strengthen the research potential of European regions, in particular by encouraging and supporting the development across Europe, of regional ?research-driven clusters?, associating universities, research centres, enterprises and regional authorities in the drive for innovation and growth (EC, 2011). This appears to be a move away from Porter?s (1998b) ?Industry Cluster? model and suggests that Research Driven Clusters (RDC) or Triple Helix Clusters (THC) are favoured by the European Commission. This review paper addresses the questions: 1) Are RDCs or THCs different substantially from industry clusters as described by Porter? And 2) Why has the European Union moved away from supporting the development of industry clusters and towards building capacity in Research Driven Clusters or Triple Helix clusters?