Institutions and Policy—Governance of Relationships

As previous studies and German initiatives showed, clusters can be harnessed as a suitable and promising policy tool (Dohse, 2007; Dolise, Fomahl & Vehrke, 2018). Thanks to the formal and institutional framework— management, structure and governance—they may reduce the uncertainty problem, inherently related to 14.0. This uncertainty suggests the need for some risk-sharing, networking, establishing platforms of co-operation or alliances, and turn the attention to clusters, where these positive effects can be reinforced by spatial proximity.

In light of the fourth industrial revolution, policy support seems critical, as it may rebuild the competitiveness of developed economies (Fetzer, Schweitzer, & Peitz, 2017). Technological change can restore the competitiveness in mature, advanced economies, and this is where policy should be focused (OECD, 2017a, 2017b). It is of particular importance for SMEs, suffering often from the climate of mistrust, as they struggle to recognise themselves, in models that look entirely different from what they used to know. Small business hi 14.0 time needs guidelines, precise definitions and more professional assistance. It seems to make sense to define the new concepts clearly, to set the right framework and offer adequate support. The need for establishing interoperability standards, also features high on the agenda. The Leading-Edge Cluster programme is a central component of the German High-Tech Strategy. Through the competition, the Federal Ministry of Education and Research (BMBF) supports the top-performing commercial and scientific clusters (Rothgang et al„ 2017). It’s OWL is one of the 15 winners of this prestigious contest—the strategic initiative 14.0—which has been launched, initially, to support and shape the transition to modem industry. It’s OWL with 200 members is considered to be the best practice of 14.0 projects (Who makes SMEs ..., 2019). The project, in general, and other accompanying related activities earned out are intended to safeguard and create new jobs, to establish new research institutes and businesses, to bring new scientists into the region and to set up new study programmes.

Additionally, the European Cluster Excellence Initiative (ECEI) has awarded to it’s OWL, a Gold Label for its cluster management. This quality label recognised all over Europe, serves as an independent and voluntary benchmark, confirming the highest excellence of cluster management. The victory in the Federal Competition Leading Edge and distinction granted by the ECEI, furthermore, bolster the quality of services, organisation and co-ordination provided by the cluster team.

All these rewards are the sign of recognition of the excellence of cluster management. As stressed by it’s OWL officials, the robust governance model applied cannot be under-estimated, as it, indeed, enables the achievement of ambitious goals. The balanced stakeholders’ structure and cluster board, who enjoy a strong mandate to represent the firms, to speak on then- behalf, to enter negotiations with their legitimacy and make binding agreements, as well as the right division of tasks among the management, marketing and R&D teams, contribute to the success.

The management company—it’s OWL Cluster management GmbH—is responsible for project implementation, development of strategy, as well as marketing activities and networking practices among its partners. The task of the executive board, i.e. the cluster board, is to determine the strategic direction of it’s OWL evolution. A scientific advisory board provides recommendations and guidance regarding future technology platforms. Experts stemming from businesses, research institutes and commercial organisations, by participating in the system architecture, or transfer and internationalisation teams, assist the boards in developing and implementing concrete activities.

The management is also involved in the internationalisation process of the cluster. The international co-operation encompasses, among others, the recent initiative—it’s OWL-EA (‘European Alliance for the Securing of the Top Position in Intelligent Technical Systems’). Funded by the Federal Ministry of Education and Research, it amis at developing a co-operation model with the Canadian region, British Columbia. As a practically oriented and industry-driven initiative, it should lead to the unlocking of more innovation potential for SMEs. Another example of international ‘cluster-to-cluster’ (C2C) co-operation is the partnership with Finnish cluster, DIMMEC. The objective of this merger of interests is the development of inter-disciplinary, cross-industry solutions, in the field of digitisation and production, with the intent of time-to-market and development time reduction. Such a partnership fits into the German government strategy, which amis to support the smart manufacturing, by strengthening the regional competence centres and clusters and their targeted internationalisation, and in consequence, their international competition. Besides, it’s OWL has been developing constructive links with Cliina and Turkey.

Some sceptical opinions are questioning the importance of the institutional framework and reducing them, mainly, to some marketing related activities. Although the management focuses on various dimensions of cluster functioning, such as technology and R&D strategy, operational aspects, including internationalisation and marketing, are crucial for creating the brand and increasing its visibility. Governance structure is critical, as it can guarantee the value-added for all shareholders. Cluster management is perceived in terms of balancing stakeholders’ rights and orchestrating various cluster activities. It enjoys a strong mandate and is allowed to speak on behalf of all CCs. This legitimacy facilitates carrying out negotiations and representing the cluster outside. Hence, it soothes the way for decisionmaking. Conversely, it confers the legitimacy on SMEs, which is critical, given the liability of smallness experienced in then external relations. The board consisting of major companies’ representatives is a powerful body making decisions and contributing substantially to the cluster development. Thus, the governance structure is seen as a critical factor, enabling smooth and efficient operation of the cluster.

Summing up, this section of the analysis, it is worth stressing that despite some scepticism, the institutional framework may rise, as the formal governance structures and management of cluster play an essential role hr its functioning and, hr particular, in light of challenges related to the 14.0. The formal institutional setting, as the example of it’s OWL may show, has been regarded since the beginning with some doubts, if not criticism. Nevertheless, it has proved crucial for the technology transfer, organising projects, developing marketing, branding of the cluster, initiating foreign co-operation, seeking partners abroad or attracting talents. Also, local firms have, over time, become more and more convinced of the benefits of it’s OWL brand. The distinctions and awards are additional proofs of the high quality of management. In times of re-industrialisation, the institutional framework in clusters should focus on the provision of (senri)public goods. It should ascertain the ICs (category of cluster commons, as suggested by Solvell, 2015), i.e. the capabilities supporting the innovativeness across industries.

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