Innovation Cluster Development As A Factor For Sustainable Regional Economic Growth

The term “regional innovation industrial cluster” is not yet clearly defined by the researches

The cluster theory in the field of determining the phenomenon of “innovation regional industrial cluster” and the influence of cluster entities on indicators of sustainable regional economic development require further study and refinement. A great number of issues related to cluster phenomenon is analysed within the framework of traditional cluster theory. The fundamental theoretical and methodological definitions of the term “cluster” have been given in the works of a lot of researchers. Porter ( 2000) is considered one of the founders of “the cluster-specific environment for innovation” (p. 29). The innovative component of clustering was studied in the works of Preissl and Solimene ( 2003), Bell ( 2005), Asheim and Oughton ( 2011), Katz and Wagner ( 2014), Li et al. ( 2019) and other scientists. However, it should be noted that, despite the significant contribution of researchers, a number of methodological and theoretical problems in the cluster theory are still underdeveloped. In particular, there is no certainty in the definition of the concepts of “cluster”, “innovation cluster”, and “regional/territorial cluster”. Some authors consider that the terms “cluster” and “innovation cluster” denote the same notion ( Preissl & Solimene, 2003, p. 73). Others, when analysing the concept of “innovative” cluster, put an accent on a “high-tech” factors ( Porter & Stern, 2001, p. 17) or consider the organisations as “technological know-how” related to competitiveness ( Castells, 1996, p. 471).

Katz and Wagner ( 2014) also stated that:

The competitiveness and productivity of “innovation-driven economic clusters” (p. 13) depend on their “inter-organisation” and “cross-industry collaboration” as well as the ability to generate and efficiently use the information based on knowledge and experience. (p. 6)

Thus, to intensify the innovative processes in the cluster, it is necessary to use the potential of the region, implement new programmes, develop collaboration between the scientific centres, educational institutions, and the cluster enterprises.

The factors for sustainable economic development in the process of regional clustering are not sufficiently studied

To reach sustainable economic development of regions it is worth considering a regional innovation cluster as a factor influencing the region’s well-being alongside with other factors that stimulate or hinder the development of clusters (the lack of financial support from the state, low demand for new goods and services, high cost of innovations, deficiency of well-educated staff, weak partnership relations, absence of documentary support).

The lack of correlation between the state and the regional programmes have a negative influence on the clustering process (state programmes do not take into account the regional specifics

The analysis of the Rostov Regional Centre for Cluster Development permits to state that the Centre does not effectively form strategic plans, adapt the state programmes to the regional needs and specifics, and does not have a methodology to apply for monitoring the regional clusters’ growth. This is one of the reasons for the formation of programmes for cluster development mainly by the state initiative using the “top-to-bottom” principle.

What specifics do theoretical approaches have to the definitions of “innovation industrial regional cluster” and “sustainable regional economic growth?”

Defining a term “innovation regional cluster” is significant for planning theoretical issues and practical work related to a cluster entity development. Due to the analysis of the theoretical sources, we can come to the conclusion that there is a lack of identical interpretations of the term “innovation cluster” given by the researchers.

In our opinion, the European Commission (2017) defines the concept of “innovation cluster” most capaciously, viewing the following characteristics:

the regional approach (close location of the groups of firms), cluster education institutions, innovative start-ups, intensive interaction, specialised expertise, the exchange of knowledge and experience as well as cross-sectoral collaboration and dissemination of information among the enterprises. (p. 9)

American researcher Schumpeter ( 1934), one of the founders of the term “innovation,” in his work “Theory of Economic Development” examined the development processes, leading to a change and stated that “without development, there is no profit, without profit, there is no development” (p.154).

So, the term “cluster” can be considered as a set of interconnected enterprises, organisations, and institutions united by industry specifics and mutual partnership ( Andrienko, 2017, p. 7).

The author considers the term “innovation regional industrial cluster” as an open system of interrelated and interconnected cluster sections in the sphere of science, production, and business that collaborate mutually to strengthen beneficial partnerships at macro-micro-meso chain of levels, ensure the competitiveness and sustain the well-being of a territory. Nowadays, the innovation regional cluster is a valuable factor to sustain the regional economy, entrepreneurship, employment dynamics, and income stability. Modern cluster entities are aimed at innovation growth and follow the direction of “sustainable regional development,” carved in the report of G.H. Brundtland for the World Commission on Environment and Development ( 1987).

What is the main aim of a cluster entity towards the increase of the region’s well-being?

The infrastructure of a regional cluster is aimed at effective interaction between cluster participants of all structural elements of a cluster: educational and research institutions, training centres, non-profit enterprises, regional and municipal authorities, coordinating organisations, Centres or Institutes for Cluster Development, public organisations, investors, and other participants.

In Russia, the process of clustering needs a suitable adaptation to specific regional conditions such as the level of socio-economic development, science and education potential, the level of production and business, urban peculiarities, and socio-cultural environment. The process of cluster entity formation is becoming an innovation process for many Russian territories and its development requires making changes in the federal cluster policy by the municipal authorities. Federal programmes, related to cluster entities, have to be modified concerning the goals and peculiarities of regional planning.

What kind of state initiatives should be applied to stimulate competitiveness, create new jobs, improve life quality, and sustain a cluster entity development?

Today, the word “innovation” is used not only in science but in everyday communication as well. To imagine a society without innovation is impossible. Innovation is a powerful incentive for competition. It motivates the society members to fulfil their demands, expand the spheres of production, market, business, and cross-cultural collaboration. Innovative forms of production and management lead to a decrease in prices, an increase in profits and financial flows, the emergence of new brands, and companies’ attractiveness.

The official terms that define the state innovation development in the Russian Federation have never been changed for ten years. Thus, the concepts of “innovation cluster” and “innovation regional cluster” are not fully and clearly defined in the federal and municipal documents. This fact leads to the lack of planned instructions for regional clustering.

Currently, the cluster entities are innovation institutions to carry out strategies for territorial evolution. The key point for the cluster policy and clustering programme development is to denote the factors and structurally-meaningful components, leaders, and actors in a cluster organisation that is aimed at satisfying the population needs and socio-economic prosperity of the region.

The documents on strategic planning for the development of the Russian Federation ( Fundamentals of the state policy of regional development of the Russian Federation for the period until 2025, 2019; Forecast of socioeconomic development of the Russian Federation for the period until 2036, 2018) include the following spheres:

Development of science, technology, and innovation, formulation of the problem, the main trajectories of the technological growth in Russia, domestic R&D expenditures, domestic expenditure on research, scientific, and technological development. The priority areas are information technology and electronics, new materials and chemical products, transport, energetics, ecology, and research. ( p. 21)

The strategic forecast assumes a comprehensive programme for the increase of the scientific potential of the country: the perfection of basic research programmes for leading universities and scientific research centres.

To achieve the strategic goal of the Russian Federation in the field of scientific and technological development it is important to fulfil the following tasks: to increase the effectiveness of state participation; ensure the innovative attractiveness of the research segment; create a globally competitive innovation system; widen the rational integration of domestic science and technology into the global innovation system.

The world rating of countries in terms of the Research and Development expenditures by UNESCO Institute for Statistics: Research and Development Expenditure ( 2017) shows that:

Russia occupies the 11th place. Russian R&D expenditures in percent of GDP (1.1%) are inferior to Ireland (4.3%), Kenya (4.2%), Australia (3.1%), Georgia (2.9%), Belarus (2.5%), Hungary (2.2%), Lithuania (1.3%), and a number of other countries. These expenses in Russia are also significantly lower than the expenses of the countries that are leading the innovation development: the USA, China, the Republic of Korea, and Japan. In this regard, an important task of strategic planning is the adaptation of federal programmes at the regional level in order to effectively plan and implement the innovation activities, in particular, the development of innovation cluster formations aimed at the sustainable development of regional economies. (p. 5)

From the above mentioned the Rostov region has all the main directions and provisions for innovation activity. The formation of the Centres for Cluster Development and improvement of their performance will make it possible to adapt the state programmes and initiatives to the regional specifics, monitor the dynamics of cluster development, increase the competitiveness, level of employment, and quality of life. The analysis of the Rostov-on-Don Centre for Cluster Development website ( Cluster registry of the Rostov Region, 2020) allows us to draw a conclusion about weak activity regarding the process of the regional clusters’ development. That results in the following recommendations to improve its performance: the Centre for Cluster Development should have an innovative online platform that includes a database of regional cluster enterprises, their qualitative and quantitative characteristics, a regulatory framework, a document bank, and a staff training system. The Centre should improve the control and monitoring system of cluster development dynamics to create conditions for sustainable development of the cluster.

What are the valuable factors to provide sustainable regional economic development in terms of cluster policy?

Cluster development factors such as the creation of innovative industries; the demand for goods produced by the cluster for the domestic and foreign markets; partnership and collaboration between the cluster members that take into account mutual interests; and the use of new technologies to improve the quality and volume of products will help to ensure sustainable economic growth in the region.

Such important factors as the training of personnel, the implementation of new information technologies, investment support of cluster members’ research activities, participation in grants, attracting new members to joint innovative work as well as financing, technological, scientific and educational work are aimed at the development of an innovation regional cluster.

According to the statistics of Cluster registry of the Rostov Region ( 2020), there are all necessary conditions for the successful development of an innovation regional industrial cluster in the Rostov Region of the Russian Federation, including:

Industrial enterprises and manufactures, sustainable production of gas, water, and electricity, research centres and Higher Schools, such as the Southern Federal University, the Don State Technical University, the Rostov State University of Economics, the Rostov State Transport University and others. (p. 8)

Thus, the Rostov Region has a large amount of energy generating capacity, but, due to some organisational and economic reasons (one of them is a monopoly tax), the industrial consumers do not have direct access. Therefore, it is necessary to create conditions for attracting foreign investment.

There are 8 currently operating clusters and 2 cluster initiatives being implemented in the Southern Federal District ( Cluster registry of the Rostov Region, 2020, p. 3). One of the innovation technological clusters is the Southern Constellation, which includes “PAO Taganrog Scientific and Technical Complex named after G.M. Beriev, OAO Granite, OAO Azov Optical Mechanical Plant, OAO Almaz, the Southern Federal University, OAO Regional Development Corporation” ( Cluster registry of the Rostov Region, 2020).

The Southern Constellation Cluster can contribute towards the process of sustainable economic growth of the region through the functioning of all cluster members and supporting organisations, including the planned collaboration with the Centre for Cluster Development (Table 01 ).