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Clusters as the drivers of innovation & growth - The Norwegian Centres of Expertise programme

Clusters are defined as regional concentrations of specialized companies and institutions, with multiple linkages and mutual cooperative interests. Knowing that dynamic clusters are key drivers of innovation and growth, Innovation Norway, together with SIVA and the Research Council of Norway, established the Norwegian Centres of Expertise (NCE) Programme in 2006 with the goal of building unique strengths out of specialized capabilities.

Clusters are far from being a new invention, and some of the most prominent clusters have a long and well known history, such as Silicon Valley in California and movie production in Hollywood. More recently, targeted and organized processes aimed at enhancing and accelerating cluster development has been a focus in a number of countries and regions.

The Norwegian Government has fully supported the development of regional clusters during the past decade, particularly through two national initiatives, the Arena Programme and the Norwegian Centres of Expertise (NCE) Programme. The competition to be qualified and selected either as an Arena or NCE project is demanding. The 12 NCE projects accepted so far represent the most dynamic and ambitious clusters in Norway.

NCE Clusters as Knowledge Centres
The twelve clusters that comprise the NCE programme represent a wide spectrum of various sectors and technologies. Common denominators are the notion of knowledge as an important driver of development and the emphasis on continuous focus on knowledge development as an important strategy within the clusters.

These commonalities provide a solid base for NCE clusters and facilitate development in accordance with each of their own unique areas of business. An excellent example is the NCE Oslo Cancer Cluster, where scientific research provides a core fundament for commercial business success. The cooperation within the cluster between researchers, entrepreneurs and commercial enterprises stimulate the development of new scientific breakthroughs, products and services, with a reduced timeline from research to market.

Norway has deep roots within a wide range of successful traditional industrial production environments, and NCEs such as NCE Raufoss, NCE Systems Engineering and others have their basis in traditional industrial production environments. Through long-term and strategic restructuring processes these clusters have evolved to become sophisticated, knowledge-based environments. These respective environments are rooted in strong local production cultures, and are effectively combined with the development of specialized technological expertise, based on collaboration with R&D institutions.

Norway has deep roots within traditional industrial production environments. Through long-term and strategic restructuring processes these clusters have evolved to become sophisticated, knowledge-based environments.
© Innovation Norway/Heidi Widerø

Clusters – Theory or Reality?

The business sector lies at the core of any cluster, and it is the ability to optimize interaction and cooperation capabilities amongst business that provide the basis for strong and innovative continued growth. R&D is also a pivotal contributor to business innovation and development processes, but it will be the business and industrial players themselves that forge the way forward and bridge the gap from research to business opportunities and the commercialization processes.

There are a number of specific arguments for participation in a business cluster that include the following major points:

• There is a concentration of “like minded” participants that provides a common basis for development of specialized labour, support, available financial sources, educational opportunities, etc.
• Companies in proximity to competitors are stimulated to increase innovation and focus to succeed
• Similar needs result in cooperative activities when stakeholders join forces to solve common challenges
• Companies and organizations can participate in joint-development projects that have the goal of creating new products and services for an increasingly demanding global competitive environment
• Physical proximity of the companies and organizations in a cluster provides a solid basis for transfer of information, access to new ideas, and potential partners in innovative projects and activities

In the case of cluster theory, how closely do the points above coincide with reality? Studies increasingly confirm that companies and organizations in such cluster concentration are generally more innovative and productive than those lacking such affiliations. The trend towards cluster development is continuing, as stated by Professor Michael Porter, whose focus on regional development of competitive advantages and strategies emphasizes the race between regions to become the most innovative place.

This lends credence to the idea that clusters that have developed a solid knowledge base and are conducive to a collaborative climate attract new businesses, and in turn new talent, knowledge, expertise and consequently – financial funding development of ongoing or new projects and activities.

It may seem a paradox that regionally defined cluster concentrations are becoming increasingly important in the current global economy with its just in time delivery of knowledge, services and products anywhere on earth. However, it is a fact that it has become largely the ability to apply and refine this raw material knowledge, combining information and expertise from various sources in turn applied in a creative and effective process that provide the competitive advantage.

Research provides a core foundation for commercial business success.
© Innovation Norway/Heidi Widerø

Venues of Communication
These values lay the foundation of the Norwegian Centres of Expertise Programme, where proximity to collaborators and competitors has a profound and positive effect. The Programme offers financial and professional support to the clusters for up to ten years, aimed at strengthening the linkages between the companies and institutions within the cluster as well as between the cluster and external environments, in Norway and abroad. As a result of each cluster’s activities, the end result is that business, educational and R&D communities can develop the ways and means that enhance their knowledge base, this achieved in a number of ways:

Development of Cluster R&D Resources
All Norwegian Centres of Expertise work closely with regional R&D institutions as partners, but also have partners beyond the region; both nationally and internationally. Local partners are essential – they are familiar with the specific needs both individual companies as well as the cluster as a whole are facing – and are well positioned to effectively contribute to the continued development of the cluster. R&D communities within each NCE serve as an effective interface with similar environments outside of the cluster, and many NCE projects have been an important catalyst for building a stronger R&D presence, both within the cluster as well as beyond.

Development of Cluster-Relevant Education
NCEs are in rapid development, demanding a qualified workforce specifically tailored to cluster needs. High priority is made to actively enhance local education through close dialogue and cooperation that has included grants, establishment of professorships, work exchange programmes, seminars as well as other creative communication aimed towards future generations and their contribution to the cluster. A number of new undergraduate and graduate level studies have been developed, the end result being that graduating students receive more attractive job offers – reflecting the fact that their education is specifically relevant to cluster needs.

International Knowledge Transfer
Many leading companies within individual NCEs have well-established cooperation with foreign R&D organizations and sectors, strengthening the connection to the international environment. This is achieved through foreign cooperation with universities, related clusters and “knowledge communities”, and participation in international R&D projects. NCEs also actively communicate their activities through participation in international congress and fairs, conferences, and other forums.

Increased Innovation through Collaboration
The added value of the clusters’ investment in R&D, education and international collaboration is maximized by the ability to make use of acquired knowledge among the clusters various participants. In turn, this stimulates additional innovation with more ideas generated and subsequently commercialized through technological and business collaboration within the cluster. A growing number of successful innovative projects have been developed as a result of cooperation within each individual NCE.

The business sector lies at the core of any cluster, and it is the ability to optimize interaction and cooperation capabilities amongst business that provide the basis for strong and innovative continued growth.
© Innovation Norway/Heidi Widerø

Beyond the Horizon

The twelve clusters participating in the NCE Programme represent knowledge-based and dynamic environments. Each NCE experiences active and dynamic interaction as they contribute actively to value creation and promotion of Norwegian industry. The engine behind the growth of each individual NCE is the ability to bring together R&D, manufacturing; investment capital and commercialization expertise such that goods, services and solutions are developed - not only for demanding customers – but in addition with an eye to future needs.

Shared vision is the key phrase within each NCE. Dynamic interaction is stimulated, increasing effective flow of ideas through both informal and organized forms of interaction and communication. New knowledge is developed, processed, financed and commercialized as the Norwegian Centres of Expertise Programme continues to evolve to meet the global needs of the 21st century.

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