Extended and Dynamic Clustering of SMEs

The convergence of forces such as the deepening of the Single Market in the EU, the wider process of globalization and the growing embedded use of information and communication technologies (ICT) in economic and business practices, among others, have brought about a structural break in the theory and practice of regional innovation policy. The need of assessment of these structural breaks the concept of extended and dynamic clustering is designed. The concept refers to cluster arrangements that have the following characteristics: though embedded in, transcend geographical location, focus on global markets, operate as ad-hoc and/or long term business networks, are ICT-enabled, and are based on dynamic aggregations of capabilities of different, often small and medium size enterprises (SME). It might be assumed that new organizational arrangements can help SMEs improve their global market access, their capacities for innovation and business performance. In the light of the structural changes underway the challenge for regional innovation policy is how to enable clusters to operate not as regional constellations nurtured by the regional economic base but rather as ‘hubs’ within a system of flows of economic activity which is increasingly defined on a global basis. This involves the elaboration of an approach to the development and innovation potential of SMEs based on institutional organs dedicated to building regional economic capacity in terms of skills and network development and the construction of international connections to enable regional SMEs to function as ‘hubs’ operating between a global economy and regional business ecosystem.