Towards An ‘Ideal’ Cluster Support Program: Blending The Approaches

Abstract

Clusters have become a major element of innovation and industrial policies in many countries worldwide. Over the years, targeted cluster support programs have been designed and implemented, each featuring a variety of approaches to the selection of clusters, terms and prerequisites for funds allocation, the areas of support, etc. Such approaches have both the advantages and drawbacks, which leads to a conception of an 'ideal' support program mix that could consider the best practices and ignore some unsuccessful solutions.The working paper aims at suggesting such an 'ideal' approach to designing a cluster support program, based on the synchronization of the most effective elements of various such programs in Russia. Over the past decade, cluster policy has occupied an important position in the agenda of the Russian Government. Two federal Ministriesthe Ministry of Economic Development and the Ministry of Industry and Trade initiated several cluster support programs for innovative and industrial clusters. Nowadays, there are more than 118 clusters in Russia, and over a half of them benefit from current public support measures -27 innovative clusters, 42 industrial and 12 leading clusters. The comparative analysis of federal support programs revealed several benefits and limitations in both approaches in terms of subsidy allocation principles, areas of support and cluster selection criteria. In particular, among the key advantages of innovative clusters programs are the focus on cluster management development, and identifying the strongest clusters through one-time selection procedure. The successful features of industrial clusters program are permanent application process, reduction of budget risk due to compensation principle of funding, and stimulation of cooperation through special requirements for joint projects. The major disadvantages of innovative cluster support programs are budget risks caused by advanced financing of cluster activities, and a lack of project focus; the probability to support low-quality projects and neglecting the issue of cluster management development are the key weaknesses within the industrial clusters program. The paper suggests a 'smart' synchronization of approaches to cluster support, which blends the best practices of different ministries.