Last Thursday, there was a seminar organized by the Ecole de Paris du Management, hosted by Daniel Rouach, who is a professor at the ESCP-EAP business school and at the Technion, Israël. Rouach is a specialist of industrial clusters and the co-author of Creating Regional Wealth in the Innovation Economy: Models, Perspectives and Best Practices, a book based on the extensive worldwide reseach he has done on the topic.
According to Rouach, there is no unique model to reproduce, but a series of success factors that ensure the success and the longevity of the cluster. Those factors are: a university, a leading company, availability of venture capital, effective governmental action, entrepreneurial spirit, as well as good competitive intelligence and networking among people, the quality of infrastructure, in particular for the transport, and the quality of the environment. If one looks at Bangalore, one of the most vibrant clusters nowadays, one can notice that the city has weaknesses one three of these factors, namely: the quality of the infrastructure and of the environment, and poor governmental action (see the excellent article about Bangalore in The Economist from April 23rd called The Bangalore Paradox). These weaknesses undermine the long term prospects of Bangalore, not so much as an IT center, but as an entrepreneurial cluster. The importance of networking is very high, and using the diaspora is something Indian and Israelis have done very well.