Morneau’s ‘clusters’ may not be an economic silver bullet – by Jennifer Wells (Toronto Star – March 22, 2017)

The finance minister points to clusters as the basis for his innovation agenda. But studies show they may not be effective tools for public policy.

Budget day. Astute in the photo-op department, Finance Minister Bill Morneau will be sporting his ethically-sourced, made-in-Mexico Poppy Barley lace-ups. Poppy Barley is Edmonton based, so the finance minister gets a gold star for supporting Canadian business.

The custom shoe company was founded by sisters Justine and Kendall Barber, so two gold stars for championing women entrepreneurs. And Poppy Barley is transparent in its supply chain, so let’s give the finance minister full marks for ingenuity. How successful Morneau will be in selling his innovation agenda, however, is a different order of business.

This time last year the finance minister’s “Growing the Middle Class” budget highlighted a four-year, $800-million commitment “to support innovation networks and clusters” as part of that agenda.

“This support will catalyze private sector dynamism, generate greater value from public investments in innovation and enable the pursuit of ambitious initiatives that bring a critical mass of stakeholders together and connect their ideas to the marketplace.”

The “clusters” idea seems to surface time and again, with Silicon Valley as the standard bearer and other agglomerations of complementary talents — Wall Street, Bay Street, Hollywood, Italian leather manufacture — cited as laying further evidence as to how they can work.

But can they be created or even nurtured by public policy?

I put that question to Hal Wolman, research professor at George Washington University’s Institute of Public Policy. Here’s what Wolman has to say, via email: “There is near unanimous agreement that a cluster cannot be created where the basis of the cluster doesn’t already exist.

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