Local and Regional Innovation Collaboration (Cluster Theory Development)

There are ways to encourage firms to become increasingly more competitive when functioning within a fertile environment designed to maximize innovative assets. The study of economic clusters helps us think of ways in which economies can develop. Innovation is becoming increasingly important to industry as well as to government stakeholders because it often comes with financial rewards such as improvement in GDP, taxes and/or wages (...part of the model is quality of life but is often seen as less imporant. It is essential to growth.)

The first manuscript presented below is on company based level and the second is focused more on a regional level. It is important to understand the nature of a phenomenon and what factors go into creating a viable cluster. One needs to understand current research and then take a step forward beyond what is available or known to further advance science. At least that might be a good goal.

Study 1: The study Strategy, Efficiency, Structure and Manufacturing Performance helps understand how manufacturing within a competitive environment leads to operational efficiciency and innovation (Handoyo, S. et. al 2023). Companies that proactively adapt strong practices outperform those who take defensive strategies. In the cluster theory I'm working on a level of competition-collaboration leads to faster operational, research and technology adaptation cross-industry in many cases (depending on how a cluster is designed.). Theoretically a cluster should be designed to create an environment with the right balance of pressures to limit stagflation but also maximize healthy adjustments.

Study 2: From a regional level we know that fostering innovation and development rests on the ability to attract firms to the area that sets the base for development. Special care should be taken in selecting anchor industries because they can catalize innovation in other areas. Start-ups based around the needs of these anchor industries sometimes take a life of their own. According to Regional Innovation and Economic Growth the amount of innovative firms in an area lead, research and development (R&D) investments, open innovation, and high-medium tech industries drive for greater Gross Regional Domestic Product (GRDP)  (Pyo & Choi, 2025).

Handoyo, S. et. al (2023). A business strategy, operational efficiency, ownership structure, and manufacturing performance: The moderating role of market uncertainty and competition intensity and its implication on open innovation. Journal of Open Innovation: Technology, Market, and Complexity, 9 (2). 100039, ISSN 2199-8531, https://doi.org/10.1016/j.joitmc.2023.100039.

Sangjae Pyo, Sang Ok Choi, (2025) Regional innovation and economic growth: Empirical insights from FGLS, FE-DKSE, and XGBoost-SHAP approach. Journal of Open Innovation: Technology, Market, and Complexity, 11 (2) ISSN 2199-8531. https://doi.org/10.1016/j.joitmc.2025.100524