Does Innovation Cluster?

Last week, the BBC had a report on New York City’s award to a consortium of universities, led by Cornell, for the building of a new applied science university that would focus on a couple of key industry clusters.  The goal of the city is to encourage innovation and businesses that could be spun off of the university research.

The article ( went on to say that other city governments around the world, including London, are hoping to imitate New York City.  London even has an online map showing its “technology ecosystem” at

The dots on this map and others like it from other cities don’t necessarily imply the ecosystem functions the way people think nor is the real ecosystem limited to the dots that are on the map.   These maps sometimes are like Rorschach tests that reflect the mental model applied to them.

The mental model at work here is that government can build an innovation cluster around a narrow domain of knowledge, whether it’s biotech or information technology or whatever.  The city leaders hope to have their own version of Stanford University, which has had the reputation as the ideal of 20th century innovation.  Of course, it is an open question as to whether that 20th Century model is the best approach for the 21st Century. 

This open question will be answered, in part, by knowing whether innovation clusters.  

So consider this news story from Europe: 

“Business clusters could be less relevant as drivers of innovation than has been commonly assumed. The Stavanger Centre for Innovation Research analysed 1,600 companies with more than 10 employees located in the five largest Norwegian city-regions. Rather than national clusters, international cooperation or global pipelines were identified as the main drivers of innovation.”

(The full article is at the research page and the research report )

Also, in what could be described as the de-clustering of the financial industry, the New York Times this week reported ( that many “Wall Street” firms were moving substantial number of employees far away from Wall Street or even Manhattan.  Clearly they don’t necessarily think that physical clusters are required for business success or innovation. 

Indeed what we know about how innovation occurs would lead us to believe that a narrow focus is the wrong approach.  Instead, innovation is most often the result of cross-pollination across disciplines.

With that in mind, perhaps these cities would be better off providing their residents with connections to the flow of new, diverse and cross-cutting ideas that are already occurring around the world – and the business services that will help turn those ideas into successful businesses.  I doubt this 21st Century model would take the parochial form of a large, institutional building project.

©2012 Norman Jacknis