Action needed – Private sector

Establish more clusters:

• Clusters are ‘geographically proximate groups of interconnected companies, suppliers, service providers and associated institutions in a particular field’ – they need a sizeable local population, nearby universities and research establishments, some suppliers and customers already there, and cheap and fast transport

• Clusters enable cities to be more productive than towns, and mega-cities more than cities – they offer major synergy benefits viz:

  • A pool of right skilled labour – ‘talent attracts talent’

  • A cross-fertilisation of ideas and technology for more innovation

  • Availability of, and competition between, specialised local suppliers who offer other members a quick service and less need for stock

• John Rose, when CEO of Rolls Royce, asked: “Why does the UK not have something like France’s world competitive cluster in Toulouse – it’s a great example of industry, academia and government working together to create world-class products – it supports 94,000 well-paid, highly skilled jobs in 1,200 companies and has a turnover of 10 billion euros”

• The USA has benefited from many such clusters too viz:

  • Silicon Valley – Stanford University set aside land for their graduates to set up their own businesses:

    • William Hewlett took advantage and Hewlett Packard now employs some 80,000 people

    • ditto David Filo and Jerry Yang with Yahoo

    • ditto Larry Page and Sergey Brin with Google

  • Boston life-sciences cluster 

• Government ministers should offer powerful incentives for new clusters to be developed in more regions, especially if the need is to rebalance the economy