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Evaluating Scottish Enterprise's Cluster Policy in Life Sciences

Rosiello, A

January 2005

Innogen working paper no. 16

Open / download (PDF, 277KB)

Innovation processes and knowledge management are highly relevant phenomena for the development of emerging industries such as biotechnology. Public policy in this area addresses either market or systemic failure. The market failure approach recognises that innovation and the market for intangible assets are characterised by uncertainty, information asymmetries and imperfect appropriation of returns. As a result, the system is unlikely to reach equilibrium and efficiency unless the government intervenes to promote investment and grant protection over intellectual property.

On the other hand, systemic approaches recognise that the performances of single actors do not uniquely depend on the way markets operate, but also on a complex network of interactions at different geographical levels. Consequently, an interdisciplinary analysis - open not only to economic theory, but also to social, legal, and political considerations - is required when evaluating the performances of specific policies.

To begin with, this paper aims to define a taxonomy of public policies directed to promote innovation and the exploitation of advanced technologies at a national and regional level. Later, as this work is part of a broader project assessing the effectiveness of a number of policies implemented in Scotland over the past few years to create a biotechnology cluster, some initial considerations will be made in relation to the existence and functioning of agglomeration and network dynamics within the local industry.

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