A Public Choice Perspective on Regional Cluster and Network Promotion in Germany

Abstract

Comparatively late by international standards, clusters and networks have now become established concepts in the development strategies of most German states and regions. However, there is a strong impression that policy and practice are running far ahead of our theoretical and empirical understanding of clusters. While conventional cluster theory fails to explain the spread and functions of such policies, this paper develops a Public Choice model that assumes different rationalities for consultants, politicians and practitioners, causing academic research and the practice of cluster development to drift apart. This is confronted with empirical evidence from two independent yet complementary surveys. The first covered 134 practitioners, consultants and observers of regional cluster policy case studies with semi-structured interviews, while the second relied on a postal questionnaire yielding responses from 123 cluster and network managers. Our findings illustrate the self-conception of practitioners and their specific rationality, which can be confronted with the state of scholarly knowledge on clusters and networks. It is found that in the practical action space, conceptual differences between clusters and networks, as well as emergence and growth, hardly matter. Rather than emerging and evolving organically, both are understood as organized phenomena, and there is a strong technocratic belief in the ability to govern their development. The paper aims to shed some light on why the policy tail appears to be wagging the analytical dog by neglecting research findings and proper empirical identification of clusters and networks and what scholarly research could do to regain political and practical relevance.

Acknowledgements

An earlier version of this paper has been presented at the annual meeting on “The Dynamics of Local Economic Growth” of the IGU Commission on the Dynamics of Economic Spaces, held in Perth, Australia, 13–17 July 2009. The authors acknowledge valuable comments from the participants of this meeting and from two anonymous referees, but assume full responsibility for all remaining shortcomings.

Notes

While Public Choice reasoning sheds light on how clusters are handled in policy and practice, the diffusion of cluster policies as repeated acts of policy transfer and learning requires a different conceptual framing informed by Policy Studies (cf. Kiese, 2010).

The sum of 145 exceeds the number of interviewees (134) since some of them assumed multiple functions, e.g. as a practitioner in one region and as an observer of a neighbouring region or a case in which he/she had formerly been active as a practitioner.

The value chain encompasses all functions from research and development through manufacturing (suppliers and assembly) to marketing. In this vertical dimension of a cluster, firms and the knowledge infrastructure (universities and research institutes) are connected via trade and innovation linkages, knowledge flows, a common knowledge base or common factor needs (cf. Roelandt & den Hertog, 1999, p. 13; Kiese, 2008b, p. 11 f.).

This variable has been interpreted as metric during the analysis. Since only the extremes of the Likert scale were predefined, respondents could assume constant intervals between the grades (cf. Hadler, 2005, p. 21; Baur, 2008; Schnell et al., 2008).

The metaphor of the tail wagging the dog refers to a 1997 black comedy movie as well as to a well-known joke: “Why does a dog wag its tail? Because a dog is smarter than its tail. If the tail was smarter, the tail would wag the dog”. The expression refers to any case where something of “greater” significance is driven by something “lesser”.