cluster policy in russia: on the way to economic diversification? igor v. pilipenko lomonosov moscow...

Cluster policy in Russia: Cluster policy in Russia: on the way to economic diversification?on the way to economic diversification?

Igor V. PilipenkoIgor V. Pilipenko

Lomonosov Moscow State UniversityLomonosov Moscow State UniversityDepartment Geography of the World EconomyDepartment Geography of the World Economy

2008 AAG Annual Meeting2008 AAG Annual MeetingApril 15-19, 2008, Boston, MAApril 15-19, 2008, Boston, MA

April 16, 2008 Igor V. Pilipenko Lomonosov Moscow State University

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A new way of microeconomic policy implementation A new way of microeconomic policy implementation involving government, business, educational and scientific involving government, business, educational and scientific communitycommunity.. ((discussed by Sdiscussed by Sölvell, Lindqvist, Ketels, 2003; Andersson, Hansson, Serger, Sölvik, 2004)ölvell, Lindqvist, Ketels, 2003; Andersson, Hansson, Serger, Sölvik, 2004)

Clusters are new policy objects – 2 general types of Clusters are new policy objects – 2 general types of clusters:clusters:

• Non-spatial clusters (industrial, national)Non-spatial clusters (industrial, national) – – a group of inter-a group of inter-related, adjacent industries and services that successfully related, adjacent industries and services that successfully specialise in the international division of labour;specialise in the international division of labour;

• Spatial clusters (regional, local, transborder)Spatial clusters (regional, local, transborder) – – groups of groups of geographically concentrated enterprises in regions or geographically concentrated enterprises in regions or localities from adjacent industries and services, which localities from adjacent industries and services, which produce similar or inter-supplemental goods and services produce similar or inter-supplemental goods and services using mostly external economies of scale (local division of using mostly external economies of scale (local division of labour, local pool of labour force, innovation diffusion).labour, local pool of labour force, innovation diffusion).

ССluster policy – definition (I)luster policy – definition (I)


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Cluster policy involves tools from other Cluster policy involves tools from other policies or is a part of other policies at a policies or is a part of other policies at a regionalregional//local level:local level:• tax incentives,tax incentives,• regional branding (Standort-Marketing),regional branding (Standort-Marketing),• FDI attraction, etc.FDI attraction, etc.

Cluster policy genesis: Cluster policy genesis: (discussed by Ffowcs(discussed by Ffowcs--WilliamsWilliams, 2004, 2004)

• Top-down policy (initiated from government);Top-down policy (initiated from government);• Bottom-up policy (started by business community);Bottom-up policy (started by business community);• Mixed policies (both parties initiate cluster policy).Mixed policies (both parties initiate cluster policy).

ССluster policy – definition (II)luster policy – definition (II)


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1.1. Stimulation of competition and exports Stimulation of competition and exports diversification;diversification;

2.2. Fostering studies of firm development at the Fostering studies of firm development at the regionalregional//local level and elaboration of specially local level and elaboration of specially focused programs;focused programs;

3.3. Creation of favorable environment for SMEs Creation of favorable environment for SMEs development;development;

4.4. Strengthening cooperation between government, Strengthening cooperation between government, business, educational and scientific communities.business, educational and scientific communities.

Possible cluster policy targets Possible cluster policy targets in the Russian economy: in the Russian economy:


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no competition – 20%:no competition – 20%:• max – wood processing 31%,max – wood processing 31%,• min – textile manufacturing 12%.min – textile manufacturing 12%.

competition with only domestic enterprises – 30%:competition with only domestic enterprises – 30%:• max – food processing 42%,max – food processing 42%,• min – chemicals 17%.min – chemicals 17%.

competition with only foreign enterprises – 13%:competition with only foreign enterprises – 13%:• max – textile manufacturing 25%,max – textile manufacturing 25%,• min – food processing 5%.min – food processing 5%.

competition with both types of enterprises – 37%: competition with both types of enterprises – 37%: • max – chemicals 53%,max – chemicals 53%,• min – automotive industry 26%.min – automotive industry 26%.

Competition in the Russian economyCompetition in the Russian economyWorld BankWorld Bank//HSE survey 2005HSE survey 2005//2006 2006 ~ 1,000 enterprises~ 1,000 enterprises


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The share of 10 leading export products in total The share of 10 leading export products in total exports (INTRACEN) has increased from 76 to 79% exports (INTRACEN) has increased from 76 to 79% in 2001-2005;in 2001-2005;

The share of “mineral products” group (according The share of “mineral products” group (according to Rosstat’s definition) has increased from 53.8 to to Rosstat’s definition) has increased from 53.8 to 65.9%;65.9%;

The share of “vehicles and its parts” group The share of “vehicles and its parts” group (Rosstat) decreased from 8.8 to 5.8%.(Rosstat) decreased from 8.8 to 5.8%.

Russia’s exports diversificationRussia’s exports diversification


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Regional policies despite Russia’s vast territories have Regional policies despite Russia’s vast territories have been surprisingly considered of second priority after been surprisingly considered of second priority after macroeconomic stability; macroeconomic stability;

Ca. 11 versions of “The Concept of regional Ca. 11 versions of “The Concept of regional development in Russia” were elaborated; the last development in Russia” were elaborated; the last proposed version was approved by the Government in proposed version was approved by the Government in 2005;2005;

The role of regional development topics in the current The role of regional development topics in the current strategic planning: strategic planning: • ““The Concept of Social-Economic Development of the Russian The Concept of Social-Economic Development of the Russian

Economy until 2020” (the version of October 2007) – 15 pages Economy until 2020” (the version of October 2007) – 15 pages about regional development (171 pages in total);about regional development (171 pages in total);

• “The Concept 2020” in March 2008 – 28 pages about regional about regional developmentdevelopment from 165 pages in total).

Microeconomic approach Microeconomic approach and regional development (I) and regional development (I)


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Microeconomic approach Microeconomic approach and regional development (II) and regional development (II)

Overall productivity in Federal districts, 2000 and 2004

4135

3298

3442

3534

2914

2826

2010

15524

9055

7905

7884

7538

6873

5996

4438

5856

0 2000 4000 6000 8000 10000 12000 14000 16000 18000

Ural FD

Central FD

North-Western FD

Russia, average

Far-Eastern FD

Siberian FD

Volga FD

Southern FD

Overall productivity, GDP per person employed

2000 2004

The productivity difference between Ural FD and Southern FD: The productivity difference between Ural FD and Southern FD: 2000 – 2.9 times; 2004 – 3.5 times.2000 – 2.9 times; 2004 – 3.5 times.


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The range between regions with highest and lowest The range between regions with highest and lowest overall productivity (GDP per person employed)overall productivity (GDP per person employed)::

2000200020042004

Nenets AONenets AO 21,48521,485 Nenets AONenets AO 56,01256,012Rep. DagestanRep. Dagestan 925925 Rep. AdygeyaRep. Adygeya 3,1023,102

Range (times)Range (times) 2323 Range (times)Range (times) 1818

The range between 10 regions with highest and lowest The range between 10 regions with highest and lowest overall productivityoverall productivity (GDP per person employed)(GDP per person employed)::

2000200020042004

10 leading regions10 leading regions 10,44510,445 10 leading regions 10 leading regions 26,57726,57710 lagging regions10 lagging regions 13111311 10 lagging regions 10 lagging regions 3,2663,266Range (times)Range (times) 7.97.9 Range (times) Range (times) 8.18.1

Microeconomic approach Microeconomic approach and regional development (III) and regional development (III)


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Microeconomic approach Microeconomic approach and regional development (IV) and regional development (IV)

Regional productivity distribution, 2004

0

10000

20000

30000

40000

50000

60000

regions

GD

P p

er p

erso

n em

ploy

ed

884,7X

375,5Me

012,56ADNenets

554,52 ADMansiKhanty

377,42 ADNenetsYamal

519,36'' oblastTyumen

327,16Moscow

730,7. PetersburgSt


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SMEs definition in RussiaSMEs definition in Russia Prior to 2007 no definition of SMEs in statistics;Prior to 2007 no definition of SMEs in statistics;

Since 1995 - definition of small enterprises:Since 1995 - definition of small enterprises: No. of employees varied between 30 and 100 depending on No. of employees varied between 30 and 100 depending on

industry,industry, GovernmentGovernment//religious organizations’ share < 25%religious organizations’ share < 25% Self-employment is included.Self-employment is included.

Since January 1, 2008 – definition of SMEs:Since January 1, 2008 – definition of SMEs: Medium-sized – less than 250 employees,Medium-sized – less than 250 employees, Small – less than 100 employees,Small – less than 100 employees, Micro-enterprises – less than 10 employees.Micro-enterprises – less than 10 employees. Self-employment is included.Self-employment is included.

In 1980 in USSR an average employment in manufacturing was In 1980 in USSR an average employment in manufacturing was ca. 330 employees (Baklanov, 1986).ca. 330 employees (Baklanov, 1986).

In 2005 in Russia an average employment in the whole In 2005 in Russia an average employment in the whole economy was less than 15 employees (Rosstat).economy was less than 15 employees (Rosstat).


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Small business (SB) demography in RussiaSmall business (SB) demography in Russia SB share in: SB share in: employment – 17.8% (2006); employment – 17.8% (2006);

national value-added – 11.8% (2004).national value-added – 11.8% (2004). SB distribution by industry, as of January 1, 2007:SB distribution by industry, as of January 1, 2007:

Source: Source: Ministry of Ministry of Economic Economic Development Development and Tradeand Trade


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Implementation of a regional innovative policyA region

The model of spatial interaction between The model of spatial interaction between government, SMEs, large enterprises, education government, SMEs, large enterprises, education

and scientific institutions within a regional and scientific institutions within a regional innovation systeminnovation system

Creation of knowledge in educational and

scientific institutions

Implementation of innovations in

technology, science parks, etc.

Innovative production in clusters of

small and medium enterprisers

A transnational corporation

A transnational corporation

Value-added chain

innovations goods

Influence of TNCs

Influence of TNCs


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Notions “cluster” and “cluster policy” are Notions “cluster” and “cluster policy” are often incorrectly interpreted;often incorrectly interpreted;

No final goals settings (i.e. raising No final goals settings (i.e. raising productivity, exports, creation of new jobs);productivity, exports, creation of new jobs);

No drivers of SMEs competitiveness No drivers of SMEs competitiveness identified (external economies of scale, etc.); identified (external economies of scale, etc.);

Confusion of notions – Confusion of notions – cluster vs. territorial-production complex (often cluster vs. territorial-production complex (often

in regional development strategies);in regional development strategies);cluster vs. technology park or industrial cluster vs. technology park or industrial

districts;districts;

ChallengesChallenges for cluster policy for cluster policy implementation in Russiaimplementation in Russia


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Development of the theory of Development of the theory of territorial-production complexes (TPCs)territorial-production complexes (TPCs)

1920s – Creation of theory of economic region1920s – Creation of theory of economic region

economic region = TPCeconomic region = TPC 1950s – Creation theory of energy-production cycles 1950s – Creation theory of energy-production cycles

as basis of TPCsas basis of TPCs

1970s-1980s – Paradigm “Shift to East”, practical 1970s-1980s – Paradigm “Shift to East”, practical spatial application of TPC models in Eastern regions spatial application of TPC models in Eastern regions of USSRof USSR

Late 1970s-1980s – Application of TPC models in Late 1970s-1980s – Application of TPC models in developing nations and countries of Central and developing nations and countries of Central and Eastern EuropeEastern Europe


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Main territorial-production complexes in Main territorial-production complexes in Russia, since 1980sRussia, since 1980s

North-Tyumen’

Noril’sk

West-Yakut

South-Yakut

Middle-Ob’

Bratsk-Ust’-Ilimsk

Irkutsk-Cheremkhovo

KrasnoyarskSayany

Kuzbass

Lower Angara

Timan-Pechora

Kursk MagneticAnomaly

10 Siberian TPCs accounted in 2006 for 17% in country’s manufacturing and 25% in national exports

(Bezrukov, 2006)


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The classification of spatial forms of The classification of spatial forms of R&D and production organizationR&D and production organization

Prevailed size of enterprises

Type of creation

Small and medium enterprises

I b

Small, medium, and large

enterprisesII b

Medium and large

enterprisesIII b

Large enterprises

IV b

Developed themselves / localization economies

I a

- Marshallian industrial district- Italian industrial district- Regional cluster- Local cluster

- Hub-and-spoke industrial district- State-anchored industrial district- Regional cluster

- Satellite platform district

- Vertically integrated industrial plants (often in old industrial regions)

Created artificially by state

authorities

II a

- Technology park- Science park- Business innovation centre- Innovation technological centre

- Technopolis- Territorial-production complex

- Territorial-production complex

- Territorial-production complex


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Four directions of cluster policy Four directions of cluster policy towards four various objects:towards four various objects:

Non-spatial clusters – already exist and can be easily Non-spatial clusters – already exist and can be easily identified: oil&gas industries, metallurgy, military complex, identified: oil&gas industries, metallurgy, military complex, aerospace industry;aerospace industry;

Territorial-production complexesTerritorial-production complexes – – already exist (the plants already exist (the plants are mostly private-owned) or were planned in USSR;are mostly private-owned) or were planned in USSR;

Spatial clusters – possible emerging within agglomerations Spatial clusters – possible emerging within agglomerations with scientific and basic infrastructure in new industries with scientific and basic infrastructure in new industries developing since 1991 with a larger share of SMEs – ICT, developing since 1991 with a larger share of SMEs – ICT, services, new construction materials, consumer-oriented services, new construction materials, consumer-oriented industries;industries;

Cluster initiatives – some examples. i.e. in automotive Cluster initiatives – some examples. i.e. in automotive industry are found.industry are found.


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Cluster policy direction 1:Cluster policy direction 1:non-spatial clustersnon-spatial clusters

Responsibility: federal government;Responsibility: federal government;

Type of policy: creation of a favorable and Type of policy: creation of a favorable and innovation-stimulative framework, promotion of innovation-stimulative framework, promotion of cluster companies abroad; raising educational cluster companies abroad; raising educational and technological standards;and technological standards;

Form of realization: mostly lawmaking;Form of realization: mostly lawmaking;

Theoretical background: the schools of the Theoretical background: the schools of the competitiveness theory.competitiveness theory.


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The analysis of the competitiveness The analysis of the competitiveness theory creationtheory creation

The problem of national competitiveness

The theory of international trade

The location theory

We analyzed ca. 40 theories and concepts We analyzed ca. 40 theories and concepts elaborated by scholars from 10 nationselaborated by scholars from 10 nations

The human capital theory


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We identify three main schools of the We identify three main schools of the competitiveness theorycompetitiveness theory::

1.1. The American The American School School –– M. Porter, M. Enright, et.al. M. Porter, M. Enright, et.al.The most practically-oriented school: the diamond of competitive The most practically-oriented school: the diamond of competitive

advantagesadvantages,, industrial and regional clusters industrial and regional clusters

3.3. The Scandinavian School The Scandinavian School - - BB.-.-AA. . LundvallLundvall, , BB. . JohnsonJohnson, , BB. . AsheimAsheim, , AA. . IsaksenIsaksen, , EE. . ReinertReinert et.al.et.al.

The social-economic school: national systems of innovationThe social-economic school: national systems of innovation,, regional innovation systems, the learning economy, learning regional innovation systems, the learning economy, learning

regionregion,, types of knowledge types of knowledge

2.2. The British School The British School - - JJ. . DunningDunning, , RR. . KaplinskyKaplinsky, , JJ. . HumphreyHumphrey, , H. SchmitzH. Schmitz, , CC. . FreemanFreeman et.al.et.al.

Division of labour between developed and developing Division of labour between developed and developing countries: value-added chainscountries: value-added chains, , clustersclusters, , transnational transnational

corporations, techno-economic paradigmcorporations, techno-economic paradigm


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First steps in cluster policy realization First steps in cluster policy realization towards non-spatial clusterstowards non-spatial clusters

Creation of large government-owned enterprises in Creation of large government-owned enterprises in highly monopolized industries in the world economy: highly monopolized industries in the world economy: ““OAO United Aircraft Corporation” (11 enterprises) OAO United Aircraft Corporation” (11 enterprises)

in 2006; in 2006; ““OAO United Shipbuilding Corporation” in 2007;OAO United Shipbuilding Corporation” in 2007;

Creation of State Corporations (as legal entities – Creation of State Corporations (as legal entities – nonprofit organizations) in 2007:nonprofit organizations) in 2007: Russian Corporation of Nanotechnologies;Russian Corporation of Nanotechnologies; Russian Technologies;Russian Technologies; ROSATOM;ROSATOM; etc.etc.


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Cluster policy direction 2:Cluster policy direction 2:territorial-production complexesterritorial-production complexes

Responsibility: Responsibility: federal government – strategic planning;federal government – strategic planning; regional government – project realization. regional government – project realization.

Type of policy: creation of new TPCs, Type of policy: creation of new TPCs, diversification of already existed TPC, realization diversification of already existed TPC, realization of infrastructure projects;of infrastructure projects;

Form of realization: mostly public-private Form of realization: mostly public-private partnership;partnership;

Theoretical background: TPC-approach.Theoretical background: TPC-approach.


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Cluster policy direction 3:Cluster policy direction 3: spatial clusters spatial clusters

Responsibility depending on cluster size: Responsibility depending on cluster size: regional government;regional government; local government.local government.

Type of policy: creation of firm networks, broker Type of policy: creation of firm networks, broker policy, regional branding, educational and policy, regional branding, educational and training programs, diversification of demand, training programs, diversification of demand, creation of favorable conditions;creation of favorable conditions;

Form of realization: public-private partnership, Form of realization: public-private partnership, lawmaking, promotion of cluster companies lawmaking, promotion of cluster companies abroad, exhibitions;abroad, exhibitions;



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Location of NovosibirskLocation of Novosibirsk


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Local ICT-cluster in NovosibirskLocal ICT-cluster in Novosibirsk

Year of formationYear of formation – 1992 – 1992

Number of firmsNumber of firms – – overover 20 20 from total from total 150 150 enterprisesenterprises

Number of employeesNumber of employees – – ca.ca. 2 2,000,000

Turnover of cluster firmsTurnover of cluster firms – – overover $$30 30 mlnmln (2003) (2003)

SpecializationSpecialization – – offshore programmingoffshore programming, , software productionsoftware production, , consulting consulting and OEMand OEM

In largerIn larger scientific centres asscientific centres as

MoscowMoscow ( (overover 70 70 ICTICT--enterprisesenterprises) ) andand St.-PetersburgSt.-Petersburg ( (overover 50 50 ICTICT--enterprisesenterprises) ) – also potential ICT-clusters – also potential ICT-clusters


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Main characteristics of a local cluster Main characteristics of a local cluster in Novosibirsk in Novosibirsk::

• Cluster firms: Cluster firms: – are from one industry;are from one industry;– are geographically concentrated;are geographically concentrated;– have close contacts with research institutes from the have close contacts with research institutes from the

Scientific city of Novosibirsk (Naukograd);Scientific city of Novosibirsk (Naukograd);– have close contacts with Novosibirsk State University;have close contacts with Novosibirsk State University;– have close contacts with Novosibirsk Technology Park.have close contacts with Novosibirsk Technology Park.

• Intensive information and know-how exchange Intensive information and know-how exchange between firms and their personnel;between firms and their personnel;

• Decision-making centre was in this cluster – the Decision-making centre was in this cluster – the leading firm “Novosoft”.leading firm “Novosoft”.


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Cluster policy direction 4:Cluster policy direction 4:cluster initiativescluster initiatives

Responsibility: mainly local governments;Responsibility: mainly local governments;

Type of policy: creation of firm networks, Type of policy: creation of firm networks, deepening cooperation between government, deepening cooperation between government, enterprises and academia, broker policy, regional enterprises and academia, broker policy, regional branding, educational programs, diversification branding, educational programs, diversification of demand, creation of favorable conditions;of demand, creation of favorable conditions;

Form of realization: public-private partnership, Form of realization: public-private partnership, promotion of cluster companies abroad, promotion of cluster companies abroad, exhibitions;exhibitions;


Thank youThank you!!

Igor V. PilipenkoIgor V. Pilipenko

Lomonosov Moscow State UniversityLomonosov Moscow State UniversityDepartment Geography of the World EconomyDepartment Geography of the World Economy

[email protected]

mailto:[email protected]

http://www.i-pilipenko.narod.ru/

cluster policy in russia: on the way to economic diversification? igor v. pilipenko lomonosov moscow...

Documents

cluster policy genesis

luster policy definition

new policy objects

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local pool of labour

max food processing

max wood processing

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