(15 Dec 2019) On innovation clusters

The Office of Principal Scientific Advisor to the PM has been talking about developing so called “Knowledge and Innovation Clusters” in selected cities. The Venture Center and NCL have been party to the discussions. These discussions got me thinking about what and why? I am capturing some brief thoughts here —-

  • When one is talking of clusters, one is thinking of a group of entities that together produce a synergistic and/or an auto-catalytic effect where the total effect is more than the sum of parts.
  • The synergistic effect may have been intentionally created (top-down or bottom-up) or may be a happy unintentional effect. You can imagine that most policy makers would like to think that most are top-down planned and created intentionally — and one has to admit that it is so in some cases. Leading examples could include Singapore or certain Chinese cities.
  • But I would guess that in most cases, Clusters emerge organically or are created by the active bottom-up efforts of a few key players in that cluster. One must note that even in these cases, policy makers and local governments have to often cooperate, match strides and keep up or at the very least not be a hinderance. Leading examples probably include the Boston area or Silicon Valley. Pune and Bangalore are also probably in the same category.
  • What are the key defining features of clusters?  I think clusters feed off a shared ecosystem that attract and aggregate various resources (ingredients)  of relevance to the citizen entities of the cluster. Symbiotic relationships are key. For example, a manufacturing cluster for automobiles may feed off an ecosystem of local parts manufacturers and manufacturing capabilities. A knowledge services company cluster may feed off an ecosystem of academic and research institutions that churn out skilled people. As the cluster grows, various other entities that serve of feed-off the entities of the cluster are also attracted to the cluster and the cluster keeps on growing (an auto-catalytic effect) . For example, once a city develops a reputation for producing many high quality startups, the city starts attracting venture capital investors, other entrepreneurs, other startups etc. In recent years, Bangalore is a good example of such an emerging cluster. It is quite clear that besides the ground realities of the ecosystem available, the reputation/ identity/ image is also important. As the studies by Dr Shai Vyakarnam from Cranfield/ Cambridge  have indicated, a social network of leaders/people who catalyse the ecosystem is also a key element of any cluster — the people who connect the dots, network, champion the the cause of the cluster. Another important role that these people play is of building a culture of trust, cooperation and a shared vision. And because people and organisations  are geographically constrained, invariably clusters are geographically limited and identified. (Similar people aggregate together — because you may have more opportunities aggregating at one place, angel investors like to invest in companies in their neighbourhood, companies locate to places where they can have easy access to their most important resource needs etc etc). Every cluster also seem to have some key nuclei organisations that get the ball rolling. It could be a university or large company or a key investor or a group of people or something else that was an early believer of the potential of the cluster. For example, IISc Bangalore, CSIR-NAL, Texas Instruments, Infosys, Wipro, GE-JFWTC, Biocon and NCBS are probably key nuclei organisations in the Bangalore cluster. I also think that a sufficiently high density of the necessary ingredients in necessary to create clusters. Finally, the cluster must be supported by the right soft and hard infrastructure and basic services (including law and order, ease of doing business, ease of living, roads, houses, transport, airports, pollution control,  etc etc) by the Government. If there is one thing the Government needs to focus on, I would recommend that it be predictability and long-term sustained development.
  • So what could be a recipe for building a cluster? a) nuclei organisations, b) social network of leaders, c) shared ecosystem of key ingredients, d) identity/ brand/ image as “the place to go for XYZ” along with a shared vision, e) basic infrastructure/services and well laid-out, stable development plans, f) high density of necessary resources/ ingredients.
  • Clusters can have different objectives and themes: specific sectors of manufacturing (say, automotive), specific sectors of services (say, education or healthcare), specific sectors of agriculture (say, fruits), research and knowledge creation (say, in AI or biomedical sciences), entrepreneurship (say, in cyber security, e-commerce, medtech etc)
  • So, what would be a knowledge cluster? Perhaps one that focuses on research and new knowledge creation; one that builds synergies between various organisations to produce much higher quality knowledge outputs/ new insights about the world. In that case a knowledge cluster needs to attract and retain the best researchers/ talent, create and maintain unique and leading facilities for research, build creative synergistic partnerships in research and funds to support such research. So, for example, if Pune is to be a top knowledge cluster is say Astrophysics, one needs to find ways to attract the best talent (ex:  build institutions like IUCAA to house them), build unique facilities (ex: LIGO, NCRA),  develop creative partnerships (ex: with IT and engineering companies) and attract adequate levels of funds (ex: from the Government, international organisations etc). The end point may be to “become the go-to place for astrophysics in the world” and produce the top research findings in the field (as seen from quality of publications and global recognitions).
  • Who could be knowledge cluster ingredients? a) Research institutions (academic, government, non-profit, industry), b) academic institutions creating the talent pool, c) funders (government, charities, multi-lateral agencies, industry), d) entities that demand or create the need for new knowledge including hospitals, entrepreneurial ventures and forward looking industrial entities, e) entities that create/ build new tools/ methods etc for exploration.
  • And, what would be an innovation cluster? One that focuses on innovation — coming up with new ideas and effectively converting early stage ideas with foresight into leading products/ services/ business enterprises, and thus value and wealth for society. The cherished goal will be to be identified as the place which gives birth to exciting new ideas and then nurtures them to build great companies, deliver impactful products and services. (For example, the Boston area and its reputation for   inventions and invention-led enterprises.)
  • What could be ingredients of an innovation cluster? This list can be very long and  depends upon the focus area/ theme. The innovation process spans idea creation at one end and delivery of products and services on the other. And innovation can be relevant to all aspects of human endeavour. So, the ecosystem needs for innovation can be very diverse, multi-dimensional and specialised for every sector. (Incidentally, this is what makes like both interesting and challenging for all ecosystem builders like Venture Center.)
  • Will knowledge clusters and innovation clusters always coincide? I do not think that is necessary. It is possible that a knowledge cluster catalyses an innovation cluster but will not happen always. It seems logical to think that since innovation relies on original thought and foresight, one would expect a knowledge cluster to be an asset to an innovation cluster. But what if there is no cross-talk or overlap in pursuits between the knowledge cluster and innovation cluster.

I will stop here for this blog and continue with some thoughts for Pune city in the my next blog.