Public policies and cluster life cycles: insights from the Basque Country experience

ABSTRACT

This paper contributes to the study of the role of public policies in the origins and evolution of clusters. Building on the existing literature, we set up a taxonomy of nine public policies that may have an impact on the emergence and evolution of clusters. Based on in-depth case studies of six clusters of the Basque Country, particularly representative of the industrial history of the region, we analyse the relevance of the different types of policies both in the emergence and evolution of clusters over time. In agreement with cluster literature, the paper concludes that public policies seem to have played only an indirect role across clusters and over their life cycles. Moreover, it points to the necessity of taking history and context into account, as most of the important policy measures highlighted by cluster literature today do not fit well with the previous policy and economic context. Finally, it also concludes that for cluster policies to be effective, the stages of the life cycle should be taken into consideration.

KEYWORDS:

• Cluster
• public policies
• life cycles
• Basque Country

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. In this paper, we distinguish between five stages in cluster life cycles: origins, development, maturity, decline and transformation/renewal. For further details on different approaches to the analysis of cluster life cycles and their stages, see, for example, Valdaliso, Elola, and Franco (2016).

2. These clusters, along with other six (on the automotive industry, home appliances, environment, media and port of Bilbao), were considered strategic by the cluster policy implemented by the regional government in the 1990s, who supported the creation of cluster-associations to promote inter-firm collaboration. The six clusters selected, along with that of the automotive industries, are particularly representative of the industrial fabric of the Basque Country in the nineteenth and twentieth centuries. Every case study draws on a wide scope of quantitative and qualitative information (e.g. statistics of the industrial sectors included in every cluster, archival sources, firms’ and business associations’ annual reports, and secondary literature, among the most important). See López, Valdaliso, Elola, and Aranguren (2008), López, Elola, Valdaliso, and Aranguren (2012), Valdaliso, Elola, Aranguren, and López (2008), Valdaliso, Elola, Aranguren, and López (2010) and Valdaliso et al., (2016) for further details.

3. Notice that not all general or framework policies have been considered a priori, although they may affect each cluster differently. For instance, the availability of highly qualified human capital, and outcome of educational policies carried out by the Basque Government from the 1980s, is more important for ‘high-tech clusters’ such as electronics or aeronautics than for ‘low-tech ones’ such as papermaking. However, others, such as trade policies, have been taken into account because they have exerted a strong influence on cluster evolution.

4. Public intervention was particularly appropriate in this case due to the combination of other factors: increased demand for aircraft production caused by deregulation of world air traffic and existing knowledge and skills in the companies in terms of new materials and electronics (López et al., 2012).

Additional information

Funding

This work was supported by Ministerio de Ciencia e Innovación under grant [HAR2009-09264]; Ministerio de Economía y Competitividad under grant [HAR2012-30948],VRI under grant [233737] and SPRI – Gobierno Vasco (Competitiveness Observatory Project).