Industrial Clusters As a Factor for Innovative Drive - in Regions of Transformation and Structural Change: A Comparative Analysis of East Germany and Poland

Zusammenfassung

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This article investigates the catalyst effect of industrial cluster formation on innovation propensity using as a basis small and medium enterprises (SMEs) located in two regions of transformation and structural change: Brandenburg in Eastern Germany (the former German Democratic Republic) and Lubuskie in Poland. Based upon Porter's (1990a) Diamond of Competitive Advantage of Regions, which is empirically applied in an explorative manner, this article aims to develop a better understanding of the necessity for interaction between enterprises and policy makers and looks at the rationale of establishing industrial and service clusters as the motor for sustained regional development.

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Industrial Clusters As a Factor for Innovative Drive - in Regions of Transformation and Structural Change: A Comparative Analysis of East Germany and Poland

1. Introduction

Innovation and the capability of a company to innovate are crucial in the development of a business which has the ability to adapt to changes in the environment and cultivate a sustainable competitive advantage (Kuratko/Hodgetts 2004). It is often argued that economic regeneration in regions experiencing demographic shrinkage and economic decline can be fuelled by innovation, and that for organisations which are entrepreneurial and innovative, there is a competitive advantage to be gained by moving into and investing in such regions (Koistinen 2002). Regions which have undergone or are still undergoing transformation, e.g. from socialist-planned economies to capitalist market economies, must display innovative traits and employ these to gain a competitive advantage. Otherwise, they will ultimately not survive the upheaval of economic and social change. The assumption that all you needed was a clearly innovative organisation to move into an area of decline and set a chain reaction in motion could not be substantiated. The win/win-situation envisaged was based purely upon low/cost, low/wage benefits for those organisations that chose to move to such regions. In face of the empirical results of this article, it is evident that interrelationships are much more complex.

It has been naively felt that in an age of increasing ease of communication, transportation, and movement of people and goods, which are all closely tied to globalisation issues, it actually does not matter from which location business is conducted. The prerequisite is considered to be innovation in what you do, regardless of the location. However, this mono-dimensional approach does not take into account the interactions with the outside world and the environment, which are necessary for innovation to flourish and for a sustained competitive business advantage to develop. Many organisations today only see the shortterm economic gains to be culled from direct investment in transitional economies or in those regions having experienced economic decline. Many central and regional government organisations and development agencies clearly support this policy and actively "jockey" for position with other regions/nations to offer the most attractive package of subsidies, which nevertheless cannot be considered as long-term regional development.

Once the attractiveness of the host region declines, and p...

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